Account No. 467057

                                    The account no. is intended for
                                    filing/internal use by the bank
                                    only and does not form part of this
                                    guarantee.

Details of the customer (the Debtors):

                         Identity No./
   Name                  Corporate No.      Address
   ----                  -------------      -------
1. PEC Israel Finance    51-025204-2        3 Daniel Frisch St., Tel-Aviv
    Corporation Ltd.

Details of guarantors:
(Guarantor's name to be inserted only at the time of signing this guarantee)

                         Identity No./
   Name                  Corporate No.      Address
   ----                  -------------      -------
1. PEC Israel Economic                      511 Fifth Avenue
    Corporation                             New York, New York 10017, USA
                                            with a copy c/o:
                                            Discount Investment Corporation Ltd.
                                            14 Beth Hashoeva Lane,
                                            Tel-Aviv, Israel
                                            Attn: Managing Director
TO:
The First International Bank of Israel Ltd.

                               SPECIFIC GUARANTEE

Preamble

Whereas PEC Israel Finance Corporation Ltd. (hereinafter: "the Debtors") are
indebted and/or may become indebted from time to time to The First International
Bank of Israel Ltd. (hereinafter: "the Bank") pursuant to in terms and
conditions as in the form attached a copy of which is attached hereto and forms
an integral part hereof (hereinafter: "the main agreement"), and shall be signed
by the Debtors not later than February 17, 1999.

NOW THEREFORE the undersigned hereby jointly and severally guarantee, engage,
declare, agree and undertake towards the Bank as follows:

General

1.    a)    The preamble to this instrument forms an integral part
            thereof.
<PAGE>

      b)    Reference to the signatories hereof shall be deemed to include and
            to refer to the signatories hereof or to whomsoever of them
            including their successors, the executors of their wills and the
            administrators of their estates and all the attorneys or
            representatives of whomsoever of them.

      c)    The term "the Debtors" and reference to the same shall be deemed to
            include and refer to the Debtors or to whomsoever of them, including
            their successors, the executors of their wills and the
            administrators of their estates and all the attorneys or
            representatives of whomsoever of them.

      d)    The term "the Bank" includes each and every one of the Bank's
            branches or offices existing at the date hereof and/or which may be
            opened henceforth in any place, the attorneys and representatives of
            the Bank and any company or body with whom the bank may become
            amalgamated in any form whatsoever.

      e)    The term "bill" includes all negotiable instruments whatsoever.

      f)    Unless the context otherwise requires, the singular shall include
            the plural and vice-versa, and the masculine shall include the
            feminine and vice-versa.

      g)    If this instrument shall be signed by two or more persons, it shall
            be binding upon them jointly and severally.

      h)    The headings hereof are for convenience of reference only and they
            do not constitute a means for construing or interpreting this
            instrument.

The Secured amounts

2.    The undersigned hereby jointly and severally guarantee to pay to the Bank
      from time to time on demand all amounts due or which may become due to the
      Bank from the Debtors under the main agreement or any agreement amending
      or replacing the same; all the amounts secured hereby are hereinafter
      referred to as "the secured amounts".

Payment demand

3.    The Bank may at any time demand of the undersigned to pay the secured
      amounts, in whole or in part, in one or more payments without being
      required to demand payment from the Debtors beforehand and without being
      required to realize any other security beforehand, and the undersigned
      hereby undertake to pay to the Bank from time to time such sum not
      exceeding the secured amounts as the Bank may demand within seven days of
      the Bank's first written demand provided, however, that all amounts
      requested to be paid are due and payable under the main agreement. Any
      amount demanded by the Bank from the aforesaid which is not paid to the
      Bank within 7 days from the date of demand shall carry interest from the
      date of demand until actual payment (even if payment is made after a claim
      has been filed or judgment has been entered against the Debtors and/or the
      undersigned) at the highest rate prevailing in the Bank from time to time
      in
<PAGE>

      respect of debit balances on current debit accounts (in Israel currency or
      foreign currency as the case may be) which have not been paid when due,
      calculated by the Bank and accrued to principal at the end of each March,
      June, September and December in every year or at the end of such other
      period at the Bank's sole discretion, or at the maximum interest
      applicable to arrears in the payment of such sum pursuant to the main
      agreement or any agreement amending or replacing the same, whichever rate
      shall be chosen by the Bank. The bank's written confirmation of the
      aforementioned rate of interest shall serve as proof against the
      guarantors of the particulars contained therein.

Irrevocable guarantee

4.    This guarantee is irrevocable and shall not be cancelled and/or amended in
      any manner as the rights, inter alia of the Bank, are dependent thereon.

Void payments and securities

5.    Notwithstanding the foregoing provisions, the undersigned hereby agree,
      whether the Bank confirms to the undersigned that their liability has
      terminated or whether the Bank has made any arrangement whatsoever with
      the undersigned, that in the event any payment received or to be received
      by the Bank from any source on account of the secured amounts or any
      collateral or surety given or to be given to the Bank by the Debtors or by
      the undersigned or by any other person before the confirmation or
      execution of an arrangement shall be deemed to be void by virtue of the
      provisions of any law including the provisions of any law relating to
      bankruptcy and liquidation that shall be in force at such time and/or in
      the event of the Bank being ordered by a court of law of repay to any
      person or body any amount which has been paid to the Bank in settlement of
      the amounts secured or on account thereof, the undersigned shall be liable
      to the Bank for payment of the secured amounts as if the confirmation or
      arrangement as aforesaid has never been given or made, as the case may be.

Change of name or constitution

6.    Where the undersigned and/or the Debtors constitute any legal body whether
      incorporated or unincorporated, or a committee or a firm, or a partnership
      or a trustee, or a board of trustees or executor of a will or
      administrator of an estate, or operate a joint account at the Bank, or
      constitute an organization, or any body comprising any combination of one
      or more of the above bodies, then the obligations of the undersigned shall
      not be affected by any alteration of name, structure or composition of the
      undersigned or of the Debtors (as the case may be), and without derogating
      from the generality of the aforesaid, the obligations of the undersigned
      shall continue to have full effect as if the undersigned or the Debtors
      (as the case may be) having the different and/or new name, structure or
      composition existed under the same name, structure of composition on the
      day this instrument was executed.

Undertaking to indemnify

7.    Without affecting or derogating from the provisions herein contained and
      in addition hereto, this instrument shall constitute an undertaking of
      indemnity and the undersigned hereby undertake to indemnify the Bank up to
<PAGE>

      the secured amounts for any damage, expenses and loss of money which may
      be caused to the Bank arising from the secured amounts and such
      indemnification shall apply, mutatis mutandis, in accordance with the
      provisions herein contained.

Bills

8.    If the Bank holds or shall be the holder of bills, signed, endorsed or
      guaranteed by the undersigned with respect to secured amounts under the
      main agreement, the undersigned hereby exempt the Bank from all the duties
      of holder of any bill such as presentment for acceptance or for payment,
      notice of dishonour or protest, and the signatures, the endorsements and
      the guarantees contained in any such bill or any other negotiable
      instruments shall remain in force until payment has been made without need
      of any formality whatsoever. Moreover the undersigned hereby waive in
      advance any claim of prescription in connection with such bills and other
      negotiable instruments.

Waiver

9.    The undersigned hereby waive irrevocably and absolutely any claim that
      they have or are likely to have against the Bank in connection with their
      obligations under this guarantee owing to prescription, death or the legal
      incapacity of the Debtors or any of them or of the undersigned or any of
      them and/or the legal disability or lack of authority of the Debtors to
      borrow monies or to enter into the main agreement or to amend or change it
      or to enter into any agreement replacing it or to enter into any agreement
      or undertaking or to execute any instrument and/or the legal disability or
      lack of authority of the undersigned to give this guarantee and/or on the
      strength of a contention that the Debtor or any of the undersigned have
      become bankrupt or have been wound-up or have made an arrangement with
      creditors (including an arrangement made by the court) and/or a contention
      that the debiting of the Debtors and/or of any of the undersigned is not
      valid for any reason whatsoever (except with respect to any amount
      actually paid by the undersigned under this Guarantee) and/or owing to the
      fact that the Bank is unable to pursue a claim against the Debtors or any
      of the undersigned for any reason whatsoever, and in any of the 
      above-mentioned cases the Bank shall be entitled to demand from the
      undersigned the secured amounts in full.

      Without prejudice to the foregoing, if the Bank shall for any reason not
      be entitled to claim all or part of the secured amounts from the
      undersigned on the strength of their guarantee, the undersigned shall be
      liable to pay such sums as principal debtors.

Additional security

10.   If the bank has accepted or shall accept other or additional security from
      any person or body, then this guarantee shall be in addition to such other
      or additional security and shall not depend upon them and shall not affect
      them nor be affected by them. Each and every one of the undersigned hereby
      confirms that it is his intention to be liable for the full amount of the
      guarantee irrespective of whether other guarantors have given their
      guarantee with him or not, and even if it has been agreed between him and
      the Bank that others shall give their guarantee together with him, and
      some or all of the others have not given their guarantee together with him
      for any reason whatsoever. The undersigned shall not be entitled to
      receive or to claim or to benefit from any security or charge held or
      which may be held by the Bank in the future in respect of all or part of
      the secured amounts, or to claim or to receive part of such security or to
<PAGE>

      have recourse to other guarantors who from time to time have guaranteed
      towards the Bank the payment of all or part of the secured amounts, unless
      the Bank shall agree thereto in advance and in writing. Without placing
      any obligation upon the Bank in respect thereof, it is hereby agreed that
      all the expenses entailed in such a transfer shall be borne by the
      transferees. Any security which the Bank holds and/or may hold with regard
      to the undersigned, and/or on their behalf and/or in their name in any
      form or manner, shall also serve as security for the discharge of the
      obligations herein contained, without the Bank being obliged to realize
      any of the said security.

Changes in the obligation or security

11.   The obligations of the undersigned herein contained shall remain in full
      force even if the Bank, either with or without the consent of the
      undersigned, and even without notification to them at the Bank's own
      discretion:

      a)    will grant any extension or concession to the Debtors or to any
            person liable with them or for them, whether as a guarantor or in
            any other way, including whomsoever of the undersigned, or will
            cause the non-fullfilment of any obligation for which the 
            undersigned are liable or have engaged to guarantee.

      b)    will discontinue, vary or renew any credit or loan or guarantee or
            any other banking facility which it has extended or will extend to
            the Debtors, and will discontinue, vary or renew any of the
            provisions of such credit, loan guarantee or banking facility.

      c)    will accept, alter, invalidate, exchange, discharge, renew, correct
            or refrain from executing or from realising bills, negotiable
            instruments, sureties, guarantees and/or other securities, held
            and/or which may be held by the Bank, whether obtained from the
            undersigned or from other persons whether as a result thereof damage
            will be caused to the undersigned or not.

      d)    will compromise or come to any arrangement with the undersigned or
            with the Debtors or with other parties or with any of them, or with
            any other person jointly liable with the undersigned or with the
            Debtors or with any of their guarantors.

      e)    will relieve any of the undersigned from all or part of their
            obligations hereunder and/or may accept any participation or will
            make any arrangement with the undersigned or the Debtors or with
            whomsoever of them.

      f)    in the event of any variation in any of the Debtors' obligations in
            respect of the secured amounts or in any of the conditions thereof,
            whereby the amount of the obligation is neither increased nor
            decreased, the obligation of the undersigned shall be varied in
            accordance therewith at the absolute discretion of the Bank, and the
            undersigned shall not exercise the option given to them under
            Section 5(c) of the Law of Guarantee 5727-1967 or under any other
            enactment amending or replacing the said section.
<PAGE>
                                      -6-


Defect in the obligation or security

12.   The obligations hereunder shall not be affected by the Bank not having
      received or not receiving any particular security or guarantee as
      collateral for the discharge of the secured amounts or any part of them or
      owing to any defect or fault now existing or that may exist in or in
      connection with any security or guarantee as aforesaid which the Bank has
      obtained or may obtain or in the main agreement or any amendment thereof
      or in any agreement replacing the same or in connection with any debt or
      obligation of the Debtors towards the Bank or arising out of any agreement
      made or to be made in or in connection with secured amounts or part
      thereof.

Prohibition on the acceptance of security

13.   The undersigned hereby declare that they have not received any security
      whatsoever from the Debtors against this guarantee or in connection
      therewith and they undertake not to receive any such security otherwise
      than with the prior written consent of the Bank. If it shall transpire
      that the undersigned have received or shall receive such security without
      the Bank's consent as aforesaid, the amount for which they are liable
      shall be increased proportionately by the amount which the Bank will not
      recover from the Debtors as a result of the receipt of security by the
      undersigned as aforesaid.

Recourse to debtors

14.   The undersigned agree that without the prior written consent of the Bank
      they shall not be entitled to claim from or to take any steps whatsoever
      against the Debtors or to prove their debt in the bankruptcy or winding-up
      of the Debtors and/or to claim in competition with the Bank in respect of
      or in connection with the secured amounts paid or demanded or that are
      likely to be demanded to be paid to the Bank. If the secured amounts have
      been paid to the Bank in full and provided that such secured amounts are
      not subject to repayment by the Bank, then the undersigned may claim from
      or take any steps whatsoever against the Debtors.

Bankruptcy, liquidation or arrangement

15.   In the event of bankruptcy or winding-up or some other similar arrangement
      of the Debtors with their creditors, the Bank may (notwithstanding any
      payment to the Bank by the undersigned or by any other person, of part of
      the secured amounts) claim the full amount owing to the Bank as a creditor
      in the bankruptcy or in the winding-up or in any such arrangement, or may
      agree to any payment in settlement and may receive such payment as if this
      security did not exist, and the undersigned undertake not to claim in such
      cases in competition with the Bank until such time as the Bank may receive
      the full amount of its claim against the Debtors.

Possession, lien and set-off

16.   For such time as the undersigned shall owe or may be liable to owe monies
      to the Bank under these presents or shall be contingently liable therefor,
      the Bank shall have the right to possession, set-off and to a banker's
      lien against all the amounts which it may hold at any time to the credit
      of the undersigned in any account whatsoever and over any asset
      (including, without derogating from the generality of the aforesaid term,
      gold, securities, bills, coins, bank notes, documents in respect of goods,
      insurance policies, assignments of debt, negotiable instruments of all
      kinds, deposits, charges,
<PAGE>
                                      -7-


      mortgages and other rights) held and/or which may be held standing and/or
      which may be standing at the disposal of, and/or on behalf of the
      undersigned by the Bank in any way or manner including such as have been
      delivered or which may he delivered to the Bank for collection and/or for
      security and/or of safe-keeping and/or in any other way, and over their
      countervalue.

      The Bank may at any time and from time to time but only in the event that
      any amount owed by the Debtors is not paid when becoming due and payable
      under the main agreement make whatever use of any asset to which the
      aforesaid lien shall apply, including the collection and sale at any price
      and on any conditions as the Bank may deem fit, and make use from time to
      time of the countervalue (in whole or in part) obtained as a result of or
      in connection with such use and/or collection and/or sale, for the part or
      full payment of the secured amounts. In the execution of the aforesaid,
      the Bank may take all legal steps or otherwise, as it may deem necessary.
      All the expenses involved in the said use and/or sale and/or legal steps,
      shall be borne by the undersigned and the Bank may debit them to the
      account of the undersigned. In case of collection of bills by the Bank,
      the Bank may transfer and discount the bills with others, may take all
      legal and other steps required for the collection of the bills, may debit
      the account of the undersigned with the costs of collection, settle with
      the signatories, endorsers or guarantors, or make any concession to them,
      accept part consideration of the bills for the full or partial payment of
      the secured amounts.

Debit of accounts

17.   The Bank may from time to time and at any time that it deems fit and at
      its absolute discretion, but only in the event that any amount owed by the
      Debtors is not paid when becoming due and payable under the main
      agreement, debit any account of the undersigned with the secured amounts
      or any part thereof whether such account exists or is opened by the Bank
      for this purpose, and whether such account be debitory or shall become
      debitory as a result of such debit, and the debit balance, if any, shall
      carry interest as stated in clause 3 above.

General payments

l8.   Any amount and/or any payment, in whatever form, which the Bank may
      receive from the Debtors or from any person other than the undersigned, or
      other assets or from the realisation of any right and/or security in
      whatever manner with the aim of reducing the secured amounts irrespective
      of whether such amounts and/or payments were rendered or paid before, on
      or after the date of payment of all or part of the secured amounts, shall
      be deemed to be a general payment on account of the secured amounts and
      the Bank may hold them pending or in suspense account for so long as the
      Bank deems fit without being obliged to employ them in reduction of the
      secured amounts (except with respect to any secured amounts becoming due
      and payable) even if the amount and/or payment have been designated for
      such purpose by the person so entitled to designate them in his accounts
      or in general, provided that any payment from the undersigned shall reduce
      the secured amounts.

Appropriation of payments

19.   The Bank may from time to time at its absolute discretion, credit any
      amount it has received and/or may receive in respect of the secured
      amounts whether before, on or after the date of payment of all or part of
      the secured amounts, in any manner or way from and/or on behalf of and/or
      on account of the Debtors and/or by the realisation of any right and/or
      security in the possession or which may come into the possession of the
      Bank, in favour of any account as the Bank may decide and/or on account of
      any amount due or which may become due to
<PAGE>

      the Bank and/or on account of the interest and/or principal and/or damages
      and/or costs and/or charges and/or additional sums owing to linkage or
      partly to one or any of the foregoing, and may transfer any amount
      credited to the Debtors in whichever account to any other account so
      chosen by the Bank, provided that any amount received by the Bank in
      respect of the secured amounts shall reduce any part of the secured
      amounts becoming due and payable under the main agreement, and the
      undersigned shall have no rights to claim and/or benefit from any amount
      which has been received and/or may be received and/or which may be debited
      and/or transferred and/or credited by the Bank as aforesaid or in any
      other way for the purpose of reducing the secured amounts, provided that
      any payment received from the undersigned shall be applied to reduce the
      secured amounts. The undersigned may not rely on Sections 49 and 50 of the
      Contracts (General Part) Law 5733-1973 or upon any legal provisions
      amending or replacing the same.

Expenses

20.   All expenses involved in any proceedings concerning this guarantee or in
      connection therewith as well as claims made hereunder or in its
      realisation or enforcement including advocates' fees shall be borne by the
      undersigned and they too will be secured by this guarantee.

Severance of claims

21.   The Bank may sever its claims for payment of the secured amounts due or
      that may be due to the Bank from the undersigned whether such claims are
      based on the same or on different causes of action any it may claim
      payment of such sums in several parts each part being considered a
      separate cause of action.

Bank entries

22.   All entries in the Bank's books and accounts shall be acceptable to the
      undersigned and copies of the Debtor's accounts or any part of them or of
      the last page thereof or a certificate signed by the Bank concerning the
      state of the account shall serve as prima facie proof to the undersigned
      of the details appearing therein.

      In this instrument "the Bank's books" shall mean and include every book,
      register, statement of account, instrument of undertaking, note, card
      index, sheet, copies of any of the foregoing, spools, any means of storing
      data for the purposes of electronic computers and any other means
      whatsoever for storing data.

      "Entries" shall mean every entry, copy entry or a handwritten copy whether
      entered by typewriter or filed by the printer, duplicator, photocopier
      (including microfilm) or by any mechanical, electrical or electronic means
      or by electronic computer entry or by any other means of entry.

Addresses

23.   The addresses of the undersigned are as specified above or any other
      address in Israel of which notice has been given to the Bank by registered
      letter the receipt of which has been confirmed by the Bank in writing. Any
      notice, demand or other document whatever (including a negotiable
      document) which may be despatched by the Bank to the undersigned by
      ordinary mail or in any other manner to the above address, or to the
      latest address notified to the Bank, shall be deemed to have been received
      by the undersigned within 72 hours of its delivery to a Post Office in
      Israel even if returned by the Post Office for whatever reason. A written
      declaration by a clerk of the Bank as to the contents of a notice, its
      delivery to the Post Office and the time of despatch shall serve as
      proof of the foregoing facts.
<PAGE>

      All notices from the undersigned to the Bank concerning the guarantee
      shall be sent to the Bank at the following address:

      (Address of branch) 9 Ahad Ha'am St., Tel-Aviv, Israel.

Place of jurisdiction

24.   The undersigned hereby elects the city of Tel--Aviv as the place of
      jurisdiction for all the purposes hereof however nothing herein contained
      shall affect the right of the Bank to apply to any other competent court.

Israel Law

25.   This guarantee shall be governed by and construed in accordance with the
      laws of the State of Israel.

Assignment

26.   The undersigned hereby irrevocably give their consent to the effect that
      the Bank may, at any time and from time to time in its absolute discretion
      and in any manner whatsoever, assign all or any of its rights arising
      under this instrument, to whomever the Bank shall assign its rights in
      connection with the secured amounts.

Saving of rights

27.   The undersigned hereby waive notice in respect of breach of any of the
      provisions hereunder. A waiver by the Bank in favour of the undersigned in
      respect of a prior breach hereunder shall not be construed as a
      justification for or a further breach. The undersigned hereby agree that
      in any case where the Bank does not forthwith use its rights arising from
      or connected with this instrument, such delay shall not be deemed to be a
      waiver of those rights or any agreement or admittance on the part of the
      Bank or any precedent and the Bank may use the rights arising from or
      connected with this instrument and/or by virtue of law at any time as it
      deems fit.

Signature on documents

28.   The undersigned undertake to sign any document or form as the Bank may
      demand if and when all or part of the laws of Israel require or may
      require, at the absolute discretion of the Bank, the undersigned to sign
      any document or form for the purpose of giving to all the provisions
      hereof full force and effect or for the purpose of their remaining so.

Supplemental guarantee

29.   This guarantee is a supplemental guarantee and does not replace any
      guarantee given to the Bank for the Debtors by the undersigned.
<PAGE>

Additional security

30.   This guarantee is the property of the Bank and the undersigned shall not
      be entitled to obtain the same even if the secured amounts have been paid
      to the Bank in full and/or their liability hereunder has been terminated.
      Upon the undersigned request, and after all secured amounts have been paid
      in full, the Bank shall confirm in writing to the undersigned that the
      Guarantee is null and void.

31.   See "Rider" and "Exhibit A" which are attached hereto and forms an
      integral part hereof.

<TABLE>
<CAPTION>
                                                                      Authentication by
                                                                      bank officer
Name of Guarantor   Signature          Address                        Date  Name  Signature
-----------------   ---------          -------                        ---------------------

<S>                                    <C>                            <C>
1. PEC Israel Economic                 511 Fifth Avenue
    Corporation                        New York, N.Y. 10017
                                       U.S.A.

By Authorised Signatories:                                            Signatures are hereby authenticated

Name:/s/ Frank J. Klein    I.D. No:                                   /s/ James I. Edelson
     --------------------          --------                           -----------------------
     Frank J. Klein, President                                        James I. Edelson, Attorney

Name: /s/ William Gold     I.D. No:
      ------------------           -------
      William Gold, Treasurer
</TABLE>
<PAGE>

                                      Rider

Governing law and jurisdiction

      a)    This instrument and all certificates, approvals and notices to be
            given in connection therewith shall be governed by, construed and
            interpreted in accordance with the laws of the State of Israel.

      b)    We hereby irrevocably agree that the courts of Israel shall have
            jurisdiction to hear and determine any suit, action or proceeding,
            and to settle any disputes, which may arise out of or in connection
            with this agreement and, for such purpose irrevocably submit to the
            jurisdiction of such courts.

      c)    We irrevocably waive any objection which we might have now or
            hereafter to the courts referred to in sub-clause (b) above being
            nominated as the forum to hear and determine any suit, action or
            proceeding, and to settle any disputes which may arise out of or in
            connection with this agreement and agree not to claim that any such
            court is not a convenient or appropriate forum.

      d)    In connection with any suit, action or proceeding in Israel, we
            agree that the process by which my suit, action or proceeding is
            begun may be served on us by being delivered to Discount Investment
            Corporation Ltd. whose address is 14 Beth Hashoeva Lane, Tel-Aviv,
            Israel Attn: Legal Counsel (hereinafter: the "Process Agent").

      e)    Our appointment of the aforementioned Process Agent is irrevocable
            and we undertake to notify you promptly of any change of address of
            the agent. We shall deliver to you a Form of Acceptance in the form
            of Exhibit "A" duly signed by the Process Agent.

      f)    The submission to the jurisdiction of the courts referred to in
            sub-clause (b) above shall not (and shall not be construed so as to)
            limit the right of the Bank to take proceedings against us in any
            other court of competent jurisdictions shall the taking of
            proceedings in any one or more jurisdictions preclude the taking of
            proceedings in any other jurisdictions, whether concurrently or not.

      g)    We hereby consent generally in respect of any legal action or
            proceedings in the courts or other judicial authority arising out of
            or in connection with this agreement to the giving of any relief or
            the issue of any process in connection with such action or
            proceeding including, without limitation, the making, enforcement or
            execution against any assets or property whatsoever (irrespective of
            its use or intended use) or any order or judgement which may be made
            or given in such action or proceeding.

      h)    We irrevocably consent to the service of process out of the
            aforesaid courts in any such action or proceedings by the mailing of
            copies thereof by registered or certified airmail stage prepaid to
            us at our above mentioned address. Such service became effective 30
            days after mailing. Nothing herein shall affect the right to serve
            process in any other manner permitted by law.


                                        1
<PAGE>

Taxes

      All amounts payable by us to you in connection with this guarantee will
      be paid by us in full without set-off, deduction or withholding at source
      of any amount in respect of any present of future taxes, fees, duties or
      similar charges of whatsoever nature imposed on us in connection with the
      payment of sums due from us in connection with this guarantee. Should any
      such taxes, duties or similar charges be deducted or withheld at source,
      we shall forthwith pay to you such additional amounts as will result in
      your immediate receipt of the full amount which would have been received
      had no such deduction or withholding been made.


                                        /s/ Frank J. Klein, President
                                        ----------------------------------------
                                        PEC Israel Economic Corporation


                                        Signature is hereby authenticated:


                                        /s/ James I. Edelson
                                        ----------------------------------------
                                        James I. Edelson, Attorney


                                      2
<PAGE>

                                   EXHIBIT "A"

             FORM OF ACCEPTANCE BY THE AGENT FOR SERVICE OF PROCESS

                                                         Date:

To:
The First International Bank of Israel Ltd.
Tel-Aviv Main Branch
Israel

Dear Sirs,

We understand that, pursuant to a specific guarantee dated ___________, of PEC
Israel Economic Corporation for PEC Israel Finance Corporation Ltd. (a copy of
which has been supplied to me), we have been irrevocably appointed agent of the
Guarantor to receive of process or other legal summons. We hereby irrevocably
accept such appointment.

We undertake to advise you immediately of any change in our address.

                                        Yours Truly,


                                        -------------------------------

Name:  Discount Investment Corporation Ltd.
Address: 14 Beth Hashoeva Lane, Tel-Aviv, Israel
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THE FIRST INTERNATIONAL BANK OF ISRAEL LTD.                  A Satra Bank

                               NOTICE TO GUARANTOR

         (Continuing Guarantee limited in amount or Specific Guarantee)

To: Guarantor's name: PEC Israel Economic Corporation     Date:_______________

    Identity No.:________________

      |X|   Specific Guarantee

            Further to the Specific Guarantee signed by you as security for
            payment of the obligations of PEC Israel Finance Corporation Ltd.
            (hereinafter: the "debtor") towards The First International Bank of
            Israel Ltd. (hereinafter: the "bank") pursuant to the Main Agreement
            as defined in the guarantee (hereinafter the "debtor's
            obligations"), and we also wish to point out that:

      |_|   1.    you are "sole guarantor of an obligation" within the meaning
                  of Ch.3 of the Guarantee Law - 1967
  
            2.    the total number of guarantors of the debtor's
                  obligations is: 1

            3.    your share of the debtor's obligations is:

                  |X|   100% of the debtor's obligations but not exceeding the
                        guarantee amount

                  |_|   ___________ of the debtor's obligations, but not
                        exceeding the guarantee amount

            4.    The guarantee is security for:

                  |_|   an existing debt (including future obligations as stated
                        above)

                  |X|   a loan taken in lieu of an existing debt
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                                      -2-


            5.    The debtor:

                  |_|   is current with his debt repayments

                  |_|   is not current with his debt repayments

                  |_|   is a "restricted customer" within the meaning of the
                        Cheques without Cover Law - 1981

            6.    The guarantee is given in lieu of:

                  |_|   the guarantee of shareholders of a debtor entity

                  |_|   the guarantee of a director of a debtor entity

                  |_|   the guarantee of a spouse of shareholder in a debtor
                        entity

                  |_|   the guarantee of a spouse of a director of a debtor
                        entity

      |_|   7. The debtor's outstanding obligations exceed the guarantee amount

            8.    Other material information:___________________________________

                  ______________________________________________________________

|_| Place a [check mark] in the relevant box

                                        Yours faithfully,

                                   The First International Bank of Israel Ltd.
                                             Tel-Aviv Main Branch

               I hereby confirm receipt of the above information

                                        PEC Israel Economic Corporation

                                        By: /s/ Frank J. Klein, President
                                           -------------------------------------
                                            Guarantor's signature

                                        Signature is hereby authenticated

                                        /s/ James I. Edelson
                                        ----------------------------------------
                                        James I. Edelson, Attorney