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                                                                    EXHIBIT 4.16


                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                             STMICROELECTRONICS N.V.

                            ST MICROELECTRONICS LTD.


                                       AND

                             TIOGA TECHNOLOGIES LTD.


                                   DATED AS OF

                                 APRIL 28, 2003

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                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is entered into as of April 28,
2003, by and between STMicroelectronics N.V. ("ST NV"), a Dutch corporation with
its registered office at WTC Schiphol Airport, Schiphol Blvd. 265, 1118 BH
Schiphol Airport, Amsterdam, The Netherlands acting through its Swiss Branch
located at 39, Chemin du Champ des Filles, 1228 Plan-les-Ouates, Geneva,
Switzerland; ST Microelectronics Ltd., with registered offices at 1 Haomanut
St., Netanya, Israel ("ST LTD." and, collectively with ST NV, "ST", or the
"BUYER") and Tioga Technologies Ltd., a public company registered under the laws
of the State of Israel with offices at 132 Menachem Begin Road, Azrieli Towers,
Tel Aviv, Israel ("TIOGA" or the "SELLER").

     WHEREAS, The parties have entered into (i) a Technology Transfer Agreement
(the "TTA"), (ii) a Development, Marketing and Services Agreement (the "SERVICES
AGREEMENT"), and (ii) an Option Agreement (the "OPTION AGREEMENT") each dated
February 14th 2002; and have executed Addendums to the TTA and the Services
Agreement on May 15, 17 and 19, 2002;

     WHEREAS, In accordance with the Option Agreement, Buyer gave Seller an
irrevocable Notice of Exercise of the Call Option (as such term is defined in
the Option Agreement) to purchase substantially all of the assets of Tioga; and

     WHEREAS, Seller wishes to sell and transfer to Buyer and Buyer wishes to
purchase from Seller, all of the right, title and interest in and to all of the
Acquired Assets (as defined below) of Seller, in consideration of the purchase
price described herein, all in accordance with the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, the parties agree as follows:

     1.   DEFINITIONS

In addition to terms elsewhere defined in this Agreement, the following
capitalized terms shall have the following meaning:

           1.1.     "ACQUIRED ASSETS" -has the meaning set forth in Section 2.3
                    below.

           1.2.     "AFFILIATE"  - means,  in the case of Seller,  Tioga
                    Technologies Inc. ("Tioga Inc.") and Silicon Value (S.V.)
                    Ltd. (in liquidation); and, in the case of Buyer, any
                    corporation, partnership, or other entity that, directly or
                    indirectly, owns, is owned by, or is under common ownership
                    with, ST, for so long as such ownership exists. For the
                    purposes of the foregoing, "own," "owned," or "ownership"
                    shall mean ownership of more than fifty (50%) of the stock
                    or other equity interests entitled to vote for the election
                    of directors or an equivalent governing body and entity that
                    is directly or indirectly controlled by, under common
                    control with or that controls the subject party.

           1.3.     "CONSIDERATION" - has the meaning set forth in Section 3
                    herein.

           1.4.     "CLOSING" - has the meaning set forth in Section 4.1 below.

           1.5.     "CLOSING DATE" - means the Effective Date.

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           1.6.     "CONFIDENTIAL INFORMATION" - means all proprietary
                    information and/or data of Seller relating to its business,
                    and/or Acquired Assets, including in any form whatsoever,
                    tangible or intangible, including information in oral,
                    visual or computer database form, not made available by
                    Seller to the general public, including without limitation
                    any Intellectual Property.

           1.7.     "DAMAGES" - as defined in Section 10.1.

           1.8.     "EFFECTIVE DATE"- the date of this Agreement.

           1.9.     "EMPLOYEES" - the officers or employees (including former
                    officers or employees) of Seller.

           1.10.    "EXCLUDED ASSETS" - has the meaning set forth in Section 2.3
                    below.

           1.11.    "EXCLUDED LIABILITIES" - has the meaning set forth in
                    Section 2.5 below.

           1.12.    "INDEMNIFIABLE AMOUNTS" - as defined in Section 10.1 below.

           1.13.    "INTELLECTUAL PROPERTY" - means all right, title and
                    interest of Seller and its Affiliates in, to, and under all
                    Patents, design patents, Trademark, technology designs,
                    know-how, copyrights, mask works, service marks trade dress,
                    and applications for any of the foregoing. For the purpose
                    of this Agreement, Intellectual Property shall also include
                    Confidential Information and research and development
                    programs and work in process.

           1.14.    "GAAP" - means generally accepted accounting principles.

           1.15.    "INVENTORY" - means all raw materials and supplies,
                    manufactured and purchased parts, goods in process, and
                    finished goods, as detailed in SCHEDULE 1.15.

           1.16.    "LIABILITY" - means any liability (whether known or unknown,
                    whether asserted or unasserted, whether absolute or
                    contingent, whether accrued or unaccrued, whether liquidated
                    or unliquidated, and whether due or to become due).

           1.17.    "MATERIAL" - means unless otherwise specifically provided in
                    this Agreement a change or effect that gives rise to an
                    expense, liability, or damage in an aggregate amount in
                    excess of $50,000.

           1.18.    "MATERIAL ADVERSE EFFECT" means (a) any change, development
                    or effect (individually or in the aggregate) in the general
                    affairs, management, business, results of operations,
                    condition (financial or otherwise), assets, or liabilities
                    (whether or not the result thereof would be covered by
                    insurance), relating solely to the Seller and not to the
                    economy or to the semiconductor industry in general, that
                    would be Material and adverse to Seller, or (b) any fact or
                    development that would (individually or in the aggregate),
                    prevent Seller from performing any Material obligations it
                    has under this Agreement.

           1.19.    "ORDINARY COURSE OF BUSINESS" - means the ordinary course of
                    business consistent with past custom and practice (including
                    with respect to quantity and frequency). For the purpose of
                    this Agreement (i) employment and consulting contracts or
                    amendments thereto containing any 'golden parachute'
                    provisions or the like; (ii) contracts with labor unions;
                    (iii) transactions with Affiliates; (iv) loan agreements;
                    (v) agreements pursuant to which Seller has given any
                    indemnification, Security Interest or otherwise agreed to
                    become directly or contingently liable for any obligation of
                    any person; (vi) application for, request for extension, or
                    receipt of any grant or allowance from any governmental
                    agency or authority, or any third party; (vii) agreements
                    relating to the acquisition, disposition or disclosure of
                    the Intellectual Property or Confidential Information
                    relating to the Seller (other than this Agreement and
                    standard distribution and licensing rights relating to the
                    Seller's products); and (viii) any fairness opinion in
                    connection with this transaction, shall not be considered to
                    be contracts entered into in the Ordinary Course of
                    Business.

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           1.20.    "PATENTS" - means all patents invented, acquired or filed by
                    Seller and its Affiliates, that are currently held or owned
                    by Seller or its Affiliates, including utility and design
                    patents, patent applications, provisional applications and
                    similar filings in any jurisdiction, and any divisions,
                    continuations, or reissues thereof. For purposes of this
                    Agreement "Patents" shall also include all patents set forth
                    in Exhibit 1.20 attached hereto.

           1.21.    "SECURITY INTEREST" - means any mortgage, pledge, lien,
                    hypothecation, encumbrance, charge, claim or other security
                    interest of any kind or character, direct or indirect,
                    whether accrued, absolute, contingent or otherwise.

           1.22.    "SELLER LIABILITIES" - means all Liabilities of Seller and
                    Seller's Affiliates.

           1.23.    "TAX"-means any taxes, duties, fines and levies imposed on
                    or charged to the Seller and/or the Affiliates by any state,
                    municipal, regional, local, national, foreign or other
                    authority including direct and indirect taxes, corporate
                    income tax, withholding tax, value added tax, sales tax,
                    insurance premium tax, customs duties, excise tax, real and
                    personal property tax, occupancy tax, registration and stamp
                    duties, environmental tax, capital tax, transfer tax, social
                    security contributions, withholding tax in respect of
                    employees, or any other tax, duties or charges and any
                    interest for late payment, penalties, sanctions and
                    increases in respect of the foregoing.

           1.24.    "TRADEMARKS" - means the trademarks, trade names, logos,
                    trademark applications, domain names, and other marks used
                    and/or registered by Seller.

           1.25.    "TRANSFERRED CONTRACTS" - has the meaning set forth in
                    Section 2.3(e) below.

           1.26.    "UNFUNDED EMPLOYEE RELATED LIABILITIES"- as defined in
                    Section 3.1 below.

     2.   THE TRANSACTION

           2.1.     PURCHASE AND SALE OF ACQUIRED ASSETS. Subject to the terms
                    and conditions of this Agreement, Buyer hereby purchases
                    from Seller, and Seller hereby sells, transfers, assigns,
                    conveys, and delivers to Buyer, free and clear of all liens,
                    mortgages, deeds, trusts, escrows, security interests,
                    encumbrances, claims, leases and charges, all of Seller's
                    right, title and interest in and to all of the Acquired
                    Assets, as defined in Section 2.3 below.

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           2.2.     [RESERVED].

           2.3.     ACQUIRED ASSETS. The "ACQUIRED ASSETS" mean all of Seller's
                    assets and properties of every kind, nature and character
                    (whether real, personal or mixed, whether tangible or
                    intangible, whether absolute, accrued, contingent, fixed or
                    otherwise and wherever situated), including the goodwill
                    related thereto, operated, owned, licensed or leased by
                    Seller, and any accounts and notes receivable, real estate,
                    equipment, inventory, goods as well as Intellectual
                    Property, products and design wins; provided, however that
                    to the extent that any Acquired Asset for which assignment
                    to Buyer is provided herein, is not assignable without the
                    consent of another party, this Agreement shall not
                    constitute an assignment or an attempted assignment thereof
                    if such assignment or attempted assignment would constitute
                    a breach thereof. All consents to assignment obtained by
                    Tioga are set forth in Exhibit 4.3(b)(6). Notwithstanding
                    the above, the Acquired Assets shall not include (i) cash or
                    cash equivalents (such as marketable securities and short
                    term investments), (ii) the Consideration hereunder, and
                    (iii) all other amounts due from Buyer or its Affiliates to
                    Seller pursuant to the TTA, if any, and the Services
                    Agreement, and (iv) any shares or other equity interest in
                    Seller's affiliates or participatory interests in third
                    parties (the "EXCLUDED ASSETS"). Without limiting the
                    generality of the foregoing definition of Acquired Assets,
                    the Seller's Acquired Assets include the following with
                    respect to the Seller:

             (a)      All accounts, notes and any other amounts receivable by
                      the Seller from any third parties in respect of or
                      relating to the Acquired Assets as of the Closing Date
                      (excluding any of the Excluded Assets);

             (b)      All rights in the Intellectual Property.

             (c)      All tangible materials, documentation and technical
                      information comprising the Intellectual Property,
                      products, design wins, and Confidential Information
                      transferred hereunder; and all such documentation,
                      instruments and information owned or held by Seller and
                      related to the Acquired Assets which may be necessary or
                      useful in connection with Buyer's conduct of the Acquired
                      Assets after the Closing.

             (d)      All Inventory, wherever located;

             (e)      All rights under all contracts written or oral, including
                      memoranda of understandings, licenses, commitments, sale
                      and purchase orders, guarantees, leases and other
                      documents entered into by Seller with third parties,
                      including (without limitation) with its customers,
                      suppliers, Employees, government agencies and entities,
                      excluding the Orckit Debenture (the "TRANSFERRED
                      CONTRACTS");

             (f)      All of Seller's rights under its agreements with
                      Employees, including with respect to the Employees'
                      obligations of confidentiality, non-compete and the
                      assignment of inventions;

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             (g)      All of Seller's permits, licenses, franchises, product
                      registrations, filings, authorizations, approvals and
                      indicia of authority (and pending applications for any
                      thereof) (i) to conduct the operations of the Acquired
                      Assets and to own, manufacture, construct, operate and
                      maintain any product, fixture, facility, equipment,
                      vehicle, machinery or installation of the Acquired Assets,
                      or (ii) to store, transport, dispose of, market or sell
                      any goods or any substance used, handled, produced,
                      disposed of, marketed or sold in the operation of the
                      Acquired Assets, as issued by any governmental agency or
                      instrumentality;

             (h)      Reserve related assets, and rights in and with respect to
                      the assets associated with any liability or obligation
                      with respect to the Employees, and any insurance policies
                      relating thereto (including manager's insurance policy -
                      'Bituach Menahalim', and study funds - 'Keren
                      Hishtalmut');

             (i)      All tools, machinery and equipment owned by Seller,
                      whether in the possession of Seller or its vendors;

             (j)      All rights under vehicle lease agreements;

             (k)      All office furnishings, equipment, including computer
                      equipment, telephone numbers, fixtures and supplies owned
                      by Seller;

             (l)      All real property, whether owned or leased by Seller and
                      used or held for use in its business, including all land,
                      buildings, rights and privileges relating thereto;

             (m)      All performance and other bonds, security and other
                      deposits, and advances maintained for use in the conduct
                      of the Seller's business;

             (n)      All claims and other prepayments, including security
                      deposits, guarantees and other retentions held by third
                      parties with respect to the Transferred Contracts as of
                      the Closing Date;

             (o)      All books and records relating to the Acquired Assets
                      (whether kept or maintained by Seller or any third
                      parties), including, without limitation, copies of all
                      lists of design wins, customers and suppliers, records
                      with respect to costs and pricing, Inventory and
                      equipment, business development plans, advertising
                      materials, catalogues, sales materials and records,
                      purchasing materials and records, and personnel records
                      with respect to Employees hired by Buyer;

             (p)      A copy of Tioga's accounting books, records, ledgers and
                      electronic data processing materials;

             (q)      All information systems, programs, software and
                      documentation thereof (including all electronic data
                      processing systems, program specifications, source codes,
                      logs, input data and report layouts and formats, record
                      file layouts, diagrams, functional specifications and
                      narrative descriptions, flow charts and other related
                      material) owned by Seller;

             (r)      All claims deposits, prepayments, refunds, causes of
                      action, and rights of set off (including any such item
                      relating to the payment of taxes);

             (s)      Prepaid expenses, deferred charges and cash advanced by
                      customers and rights to volume rebates due from suppliers;

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             (t)      All other assets, properties, rights and claims related to
                      the operations of Seller or which arise in or from the
                      conduct thereof; provided, however, that the definition of
                      Acquired Assets shall not include any of the Excluded
                      Assets.

                 The parties agree that all the Acquired Assets set forth in
         Sections 2.3(b) and 2.3(c) shall be acquired by, and transferred to,
         ST NV, subject to applicable OCS rules and regulations; and all other
         Acquired Assets shall be acquired by, and transferred to, ST Ltd.

           2.4.     ASSUMPTION OF LIABILITIES. Subject to the terms and
                    conditions of this Agreement, Buyer hereby assumes,
                    discharges and becomes solely responsible for all Seller
                    Liabilities, excluding only the Excluded Liabilities (as
                    defined below).

           2.5.     EXCLUDED LIABILITIES. Notwithstanding anything contained
                    herein to the contrary, Buyer shall not assume or be bound
                    by or otherwise be responsible for (i) the Seller's
                    consolidated financial indebtedness including, without
                    limitation, any Liability of Seller or Seller's Affiliates
                    with respect to the Orckit Debenture, overdrafts, actually
                    drawn amounts with respect to revolving credit facilities,
                    long term and short term debt, capital leases and any other
                    outstanding liability requiring either payment of interest
                    thereon or repayment of a principal amount, and any accrued
                    interest thereon, (ii) Liabilities of Seller towards
                    Seller's Affiliates or of Seller's Affiliates towards
                    Seller, (iii) any Tax Liability (other than with respect to
                    VAT as set forth in Section 9.9 of this Agreement), (iv) all
                    amounts payable by Seller to the Israeli Office of Chief
                    Scientist ("OCS") with respect to the consideration received
                    or receivable by Seller from Buyer under the Services
                    Agreement, including any interest or penalties associated
                    therewith, (v) any Liability deriving from post-Closing
                    actions of Seller, (vi) any Liability of Seller or Seller's
                    Affiliates actually known to Seller or Seller's Affiliates
                    and not disclosed to Buyer in the Disclosure Schedule or the
                    Closing Financial Statements; and (vii) any Liabilities that
                    are deemed excluded under Section 7 hereto (the "EXCLUDED
                    LIABILITIES") and such Excluded Liabilities shall remain the
                    obligation of the Seller.

     3.  CONSIDERATION

           3.1.     CONSIDERATION. In consideration for the Acquired Assets,
                    Buyer shall pay Seller an aggregate amount of US$12,000,000,
                    reduced by the aggregate amount, as of the Closing Date, of
                    (i) Unfunded Employee-Related Liabilities (as defined
                    hereunder) (ii) overdue current liabilities that have not
                    been paid as of the Closing Date under their respective
                    original terms of payment, (iii) accounts receivable due for
                    payment after the Closing Date that were collected in
                    advance, sold or factored to financial institutions for
                    advance collection, and (iv) any increase of Liabilities or
                    decrease of assets, not in the Ordinary Course of Business,
                    reported in the Closing Financial Statements as compared to
                    Liabilities and assets reported in the unaudited balance
                    sheet as of March 31, 2003 (the "REFERENCE BALANCE SHEET",
                    attached under Schedule 3.1) (the "Consideration"). The
                    Consideration includes an amount of $8 million paid by ST NV
                    to Seller in consideration of the Intellectual Property
                    transferred to ST NV herein. The Consideration shall be
                    supplemented by Value Added Tax ("VAT"), to the extent
                    applicable. "UNFUNDED EMPLOYEE RELATED LIABILITIES" shall
                    include, but not be limited to, all amounts, if any, that
                    have not been paid or deposited with the Employees'
                    respective pension plans or managers' insurance policies in
                    the manner required pursuant to such plans or policies or
                    applicable law including but not limited to severance
                    payments, unused accrued vacation days, special bonus
                    payments, salary payments, extra hours payments, early
                    notice payments and all other benefits or compensations
                    under Israeli law or agreements (collectively, "EMPLOYEE
                    RELATED LIABILITIES"). Notwithstanding the foregoing, any
                    Employee Related Liabilities for which accrual has been
                    properly made in the Closing Financial Statements in
                    accordance with US GAAP, shall be excluded from the
                    definition of Unfunded Employee Related Liabilities. For the
                    avoidance of doubt, if such Unfunded Employee Related
                    Liabilities were computed based on the December 31, 2002
                    audited financial statements attached as part of Schedule
                    5.6, there would be no Unfunded Employee Related
                    Liabilities.

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           3.2.     The Consideration shall be determined in accordance with the
                    following procedure:

             (i)      Promptly after Closing the Seller shall deliver to Buyer
                      the Closing Financial Statements, as defined in
                      Section 5.6;

             (ii)     Buyer shall deliver to Seller a draft computation of the
                      Consideration, as promptly as possible after the receipt
                      of the Closing Financial Statements and in any event
                      within thirty (30) days thereafter; Seller (and Seller's
                      auditors) shall give the Buyer full access to those books
                      of account, documents, files and papers remaining with the
                      Seller as reasonably required to prepare the draft
                      computation of the Consideration;

             (iii)    Seller shall review the draft computation of the
                      Consideration submitted by the Buyer and within thirty
                      (30) days of receipt thereof shall inform the Buyer
                      whether or not it agrees with the draft computation of the
                      Consideration, giving written details of its reasons in
                      case of disagreement;

             (iv)     If Seller disagrees with the draft computation of the
                      Consideration, then Seller and Buyer, with assistance of
                      their respective auditors shall, following the Seller's
                      notification of any matters in dispute to the Buyer
                      pursuant to subparagraph (iii) above, have a period of
                      fifteen (15) days to agree on the Consideration;

             (v)      If the parties are unable to reach an agreement as to the
                      Consideration within the above period of fifteen (15)
                      days, the parties shall appoint Ernst & Young LLP, New
                      York (the "Expert"), whose sole duties shall be to settle
                      the disputed adjustments and to determine the
                      Consideration (the parties are aware of the fact that
                      Ernst & Young Israel is the Seller's CPA);

             (vi)     The Expert shall limit its investigation to the matters on
                      which the parties disagree and shall have access to any
                      books of account, documents, files and papers which it may
                      request and to employees of Buyer and Seller, as required
                      to perform its duty. The Expert shall issue its final
                      determination concerning the Consideration as promptly as
                      possible and in any event within fifteen (15) days after
                      its appointment referred to in subparagraph (v); and

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             (vii)    The final determination made by Buyer and Seller or, if
                      applicable, by the Expert, shall be final and binding on
                      the parties and the parties irrevocably undertake to
                      approve and accept the determination made jointly by the
                      Buyer and the Seller or by the Expert (as the case may be)
                      and to implement the payment of any sum, if any, to be
                      made in connection therewith.

           3.3.     All amounts received by the Seller after the Closing Date in
                    respect of the Acquired Assets shall accrue to the benefit
                    of the Buyer, and all amounts payable after the Closing Date
                    in respect of the Acquired Assets shall be a liability of
                    the Buyer.

           3.4.     PAYMENT OF CONSIDERATION. The Consideration is payable as
                    follows:

             (a)      Concurrently with the execution of this Agreement, Buyer
                      shall deliver to Seller's bank account, Account No. 85842,
                      Bank Hapoalim Ltd., Branch No. 690, Swift Code POALILIT
                      GLM, in immediately available funds, an amount equal to
                      $12 million plus VAT, to the extent applicable (the
                      "PROVISIONAL CONSIDERATION"), less an amount of
                      US$1,800,000 (the "ESCROW AMOUNT"), which shall be
                      deposited in escrow according to the Escrow Agreement.
                      Such amount shall be delivered to the Seller on the later
                      of (i) thirty days following the Closing Date, and (ii)
                      twenty days following receipt by ST NV (at the address set
                      forth below) of the Closing Financial Statements, subject
                      to the provisions of Article 10 herein, and in accordance
                      with the provisions of the Escrow Agreement attached
                      hereto as EXHIBIT 3.4.

             (b)      Following the final determination of the Consideration as
                      outlined under Section 3.2, Seller shall pay in cash the
                      difference between the Provisional Consideration and the
                      Consideration, within 15 days of the final determination
                      of the Consideration. In case of failure by Seller to pay
                      in cash to Buyer such difference within 15 days from the
                      final determination of the Consideration, Buyer will have
                      the right to withdraw such amount from the Escrow Account,
                      if the Escrow Period has not already lapsed, and Seller
                      shall promptly refund the amount withdrawn into the Escrow
                      Account. Nothing in this section (b) shall be deemed to
                      have the effect of extending the Escrow Period beyond the
                      period set forth in Section 10.

             (c)      The Consideration shall be paid in United States Dollars.
                      All sums payable to Seller hereunder shall be made by way
                      of a wire transfer, of immediately available funds, to
                      Seller's bank account, pursuant to the wiring instructions
                      set forth in this Agreement, or by such other form of
                      payment as is mutually agreed by Seller and Buyer.

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     4.  THE CLOSING

           4.1.     CLOSING. Subject to the terms and conditions of this
                    Agreement, the sale and purchase contemplated hereby (the
                    "CLOSING") shall take place at such time as this Agreement
                    has been executed by both parties and all deliverables set
                    forth in Section 4.3 have been duly delivered and no
                    execution of this Agreement or delivery of any deliverable
                    shall be deemed effective until such time as all such
                    deliverables have been delivered.

           4.2.     TERMINATION OF THE SERVICES AGREEMENT. The Services
                    Agreement is hereby terminated and expired, including
                    without limitation the provisions of section 4.3 and 3
                    thereof, provided that such termination will not affect the
                    obligations of the parties under the Services Agreement that
                    have arisen prior to such termination.

           4.3.     DELIVERIES AND TRANSACTIONS AT THE CLOSING. Concurrently
                    with the execution of this Agreement, the following
                    transactions shall occur and the following documents will be
                    delivered:

             (a)      DELIVERY BY BUYER. Buyer shall:

                 (i)      deliver to Seller the Provisional Consideration less
                          the Escrow Amount which shall be held in escrow, as
                          set forth in Section 3.4(a) above, and

                 (ii)     deposit the amount of US$1,800,000 with the escrow
                          agent in accordance with the Escrow Agreement attached
                          hereto as EXHIBIT 3.4; AND

                 (iii)    deliver to Seller a duly executed copy of the Rights
                          and Obligations Form ("Tofes Hovot Ve'Zehuyot") of the
                          OCS, in the form attached as Exhibit 4.3(b)(8)(I)
                          hereto.

             (b)      DELIVERY BY SELLER. Seller shall deliver to Buyer:

                          (1)   [RESERVED].

                          (2)   COMPLIANCE CERTIFICATE- A certificate signed by
                                the Seller's CEO, in the form attached hereto as
                                EXHIBIT 4.3 (b) (2), certifying that the items
                                set forth in Sections 4.3(b)(1), 4.3(b)(3),
                                4.3(b)(4) 4.3(b)(5) and 4.3(b)(11) have been
                                duly satisfied, in the form agreed to by Buyer
                                and Seller's counsel.

                          (3)   ORCKIT'S PLEDGE. A duly certified letter from
                                Orckit attached hereto as EXHIBIT 4.3 (b)(3),
                                confirming the release of all kind of pledges
                                that Orckit has on any of the Acquired Assets or
                                on the Seller's assets.

                          (4)   IP ASSIGNMENT. The Company has delivered an
                                executed Power of Attorney with respect to the
                                assignment of Intellectual Property Rights, in
                                the form attached hereto as EXHIBIT 4.3(b)(4).

                          (5)   IP TRANSFER: A duly executed transfer deed with
                                respect to all tangible material, documentation
                                and technical information in English, comprising
                                the Intellectual Property, products, design
                                wins, and Confidential Information transferred
                                hereunder in the form attached hereto as EXHIBIT
                                4.3 (b)(5).

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                          (6)   ASSIGNMENT LETTERS. Irrevocable assignment
                                letters in the form attached hereto as EXHIBIT
                                4.3 (b)(6), duly executed by Seller,
                                transferring to Buyer all of Seller's rights,
                                title and interest in and to the Transferred
                                Contracts.

                          (7)   LEASEHOLD ASSIGNMENTS. Assignments (with
                                Lessor's consent thereto, to the extent
                                required) of leasehold interests in any leased
                                real property included in the Acquired Assets,
                                attached hereto as EXHIBIT 4.3 (b)(7).

                          (8)   SELLER'S REQUIRED CONSENTS. Documents reasonably
                                satisfactory to Buyer, evidencing receipt of
                                approval from governmental authorities required
                                for the consummation of the transactions
                                contemplated hereby, as follows: (i) the
                                approval of the Chief Scientist of the Israeli
                                Ministry of Industry and Commerce attached
                                hereto as EXHIBIT 4.3 (b)(8)(I); (ii) Seller's
                                notification to the Investment Center attached
                                hereto as EXHIBIT 4.3 (b)(8)(II).

                          (9)   OPINION. An opinion of Naschitz, Brandes & Co.,
                                counsel of Seller in the form attached hereto as
                                Exhibit 4.3(b)(9), dated as of the Closing Date.

                          (10)  RELEASE. An executed copy of the release letter
                                in the form attached hereto as Exhibit
                                4.3(b)(10), releasing and discharging Buyer and
                                its Affiliates from any and all claims against
                                and liabilities of Seller and/or its Affiliates
                                that are Excluded Liabilities.

                          (11)  SELLER'S EMPLOYEES. Documents evidencing the
                                termination of all of Seller's current Employees
                                who are not listed in Exhibit 4.3(b)(11), as
                                well as the signature of the current Employees
                                who are listed in Exhibit 4.3(b)(11) ("Retained
                                Employees") on Buyer's 'Welcome Letter'.

                          (12)  OCS. A duly executed copy of the Rights and
                                Obligations Form ('Tofes Hovot Ve'Zehuyot") of
                                the Office of Chief Scientist, in the form
                                attached as Exhibit 4.3(b)(8)(i) hereto; and a
                                duly executed copy of Seller's withdrawal of its
                                applications for OCS grants listed in Exhibit
                                4.3(b)(12)(ii).

                          (13)  ADDITIONAL DOCUMENTS. Such other endorsements,
                                instruments, certificates or documents executed
                                by Seller or its Affiliates as may be necessary
                                or appropriate to carry out the sale, transfer,
                                conveyance, and assignment contemplated hereby,
                                as Buyer and its counsel may reasonably request.

     5.  REPRESENTATIONS AND WARRANTIES OF SELLER

    Seller represents and warrants to Buyer that the statements contained in
    this Section 5 and the information contained in the disclosure schedule
    attached as EXHIBIT 5 hereto with regard to the Acquired Assets (the
    "DISCLOSURE SCHEDULE") are correct and complete as of the date of this
    Agreement, except as set forth in the Disclosure Schedule. For all purposes
    hereunder, the Disclosure Schedule shall include Exhibits 1, 1A, and 2 and 4
    of the TTA, and Exhibit 1 of the Services Agreement, which are incorporated
    in the Disclosure Schedule by reference. For purposes of this Section 5,
    the term Seller shall also include Seller's Affiliates.

                                       11
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           5.1.     ORGANIZATION OF SELLER. Seller and its Affiliates are
                    corporations duly organized, validly existing, and in good
                    standing under the laws of their respective jurisdictions.
                    Seller has the corporate power and authority to own, lease
                    or operate all properties and assets now owned, leased or
                    operated by it and to carry on its businesses as now
                    conducted. Seller has delivered to Buyer complete and
                    accurate copies of its Articles of Association, as amended
                    and in effect on the date hereof.

           5.2.     AUTHORIZATION OF TRANSACTION. Seller has full power and
                    authority (including full corporate power and authority) to
                    execute and deliver this Agreement and to perform its
                    obligations hereunder and thereafter. Without limiting the
                    generality of the foregoing, the board of directors of
                    Seller has duly authorized the execution, delivery, and
                    performance of this Agreement by Seller. This Agreement
                    constitutes the valid and legally binding obligation of
                    Seller, enforceable in accordance with its terms and
                    conditions.

           5.3.     NO CONTRAVENTION. Neither the execution and the delivery of
                    this Agreement, nor the consummation of the transactions
                    contemplated hereby, will (i) violate any constitution,
                    statute, regulation, rule, injunction, judgment, order,
                    decree, ruling, charge, or other restriction of any
                    government, governmental agency, or court to which Seller is
                    subject or any provision of the Articles of Association of
                    Seller; (ii) except as set forth in Section 5.3 of the
                    Disclosure Schedule, conflict with, result in a breach of,
                    constitute a default under, result in the acceleration of,
                    create in any party the right to accelerate, terminate,
                    modify, or cancel any Transferred Contract, or (iii) result
                    in any lien against the Acquired Assets.

           5.4.     CONSENTS, ETC. Except as set forth in Section 5.4 of the
                    Disclosure Schedule, Seller does not need to give any notice
                    to, make any filing with, or obtain any authorization,
                    consent, or approval of any government, governmental agency
                    or any third party in order to consummate the transactions
                    contemplated by this Agreement. Except as set forth in
                    Section 5.4 to the Disclosure Schedule, no consent,
                    approval, license, permit, declaration, registration or
                    authorization of the action by, or filing with, any person,
                    or entity including any court, governmental or regulatory
                    authority, commission, board, administrative agency or
                    non-governmental third party, on the part of Seller, is
                    required in connection with the execution and performance of
                    this Agreement or the consummation of the transactions
                    contemplated hereunder.

           5.5.     TITLE TO ASSETS. Except as set forth in Section 5.5 of the
                    Disclosure Schedule, the Seller has good and marketable
                    title to, or a valid leasehold interest in all of the
                    properties and Acquired Assets, free and clear of all
                    Security Interests, or restrictions on transfer. The Seller
                    further represents that the Seller's Affiliates do not own
                    any of the Acquired Assets or any assets that are used for
                    the operation of the business of the Seller. Seller has not
                    solicited, directly or indirectly, any offer to be acquired.

                                       12
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           5.6.     FINANCIAL STATEMENTS. Seller has previously delivered to
                    Buyer, true and completed copies of the following financial
                    statements (collectively, the "FINANCIAL STATEMENTS"):
                    accurate and complete copies of its audited consolidated
                    balance sheets as of December 31, 2002, 2001 and 2000, and
                    the related audited consolidated statements of operations,
                    stockholders' equity, and cash flows for each of the years
                    then ended, and the notes thereto, together with the report
                    thereon of Ernst & Young, LLP independent auditors as
                    attached hereto under SCHEDULE 5.6. Seller will deliver to
                    Buyer audited consolidated financial statements of the
                    Seller for the period ending as of the Closing Date
                    ("CLOSING FINANCIAL STATEMENTS"). The Financial Statements
                    (including the notes thereto) and the Closing Financial
                    Statements have been (and, in the case of the Closing
                    Financial Statements, will be) prepared according to the
                    applicable law and United States GAAP applied on a
                    consistent basis throughout the periods covered, present
                    fairly the financial condition of the Seller as of such
                    dates and the results of operations of the Seller for such
                    periods, are correct and complete in accordance with US
                    GAAP, and are consistent with the books and records of
                    Seller and its Affiliates (which books and records are
                    correct and complete). Each delivered balance sheet fully
                    sets forth all assets and liabilities of the business
                    existing as of its date which, under US GAAP, should be set
                    forth therein, and each delivered statement of earnings sets
                    forth the items of income and expense of the business which
                    should appear therein under US GAAP. The trade accounts and
                    other receivables of Seller which are classified as current
                    assets on the balance sheets are bona fide receivables, were
                    acquired in the ordinary course of business, are stated in
                    accordance with US GAAP and, subject to the reserve for
                    doubtful accounts, need not be written-off as uncollectible.
                    The inventories of Seller reflected on the balance sheets
                    have been valued in accordance with US GAAP, and the value
                    of obsolete materials and materials of below standard
                    quality has been written down or reserved against in
                    accordance with US GAAP. There have been no write-ups of
                    inventories or other assets. Seller has no liabilities other
                    than (i) those set forth or reserved against in the Closing
                    Financial Statements, and (ii) those disclosed on Schedule
                    5.6. Seller's books of account have been kept accurately in
                    the ordinary course of business, the transactions entered
                    therein represent bona fide transactions, and the revenues,
                    expenses, assets and liabilities of Seller have been
                    properly recorded in such books.

           5.7.     ABSENCE OF CERTAIN CHANGES. Except as set forth in Section
                    5.7 to the Disclosure Schedule, there have been no Material
                    changes to any material agreements, obligations or
                    commitments of the Seller since December 31, 2002. Since
                    December 31, 2002, Seller has conducted the business in the
                    Ordinary Course, consistent with past practices and there
                    has not been any Material Adverse Effect other than as
                    detailed in section 5.7 to the Disclosure Schedule.

           5.8.     ORDINARY COURSE. Except as set forth in Section 5.8 to the
                    Disclosure Schedule, there are no liabilities that arose and
                    became known to Seller since December 31, 2002 that are not
                    in the Ordinary Course of Business.

                                       13
<Page>

           5.9.     UNDISCLOSED LIABILITIES. The Seller does not have any
                    undisclosed Liability (and it does not know of any basis for
                    any present or future action, suit, proceeding, hearing,
                    investigation, charge, complaint, claim, or demand against
                    any of them giving rise to any liability). A Liability shall
                    be deemed undisclosed if it is not disclosed in the
                    Disclosure Schedule or in the Closing Financial Statements.

           5.10.    LEGAL COMPLIANCE. To the Seller's best knowledge, the Seller
                    has complied with all applicable laws with regard to the
                    Acquired Assets (including rules, regulations, codes, plans,
                    injunctions, judgments, orders, decrees, rulings and charges
                    there under) of federal, state, local, and foreign
                    governments (and all agencies thereof). No action, suit,
                    proceeding, hearing, investigation, charge, complaint,
                    claim, demand, or notice has been filed or commenced against
                    any of them alleging any failure so to comply. There are no
                    judgments outstanding and unsatisfied against Seller or the
                    Acquired Assets.

           5.11.    TAX MATTERS.

                 Excluding any non compliance with or inaccuracy in the
                 following Tax representations which would not adversely affect
                 Buyer's liabilities to Tax authorities or other Israeli or U.S.
                 governmental agencies, and subject to outstanding VAT matters
                 which will be handled in accordance with section 9.9 hereof,
                 Seller hereby represents that:

             (a)      The Seller and its Affiliates have at all times complied,
                      in all material respects, with all laws and regulations in
                      respect of Tax, including without limitation the terms of
                      any agreement reached with any applicable authority. The
                      Seller and its Affiliates have duly filed or caused to be
                      duly filed all Tax returns that are required to be filed
                      in all applicable jurisdictions, and each such Tax return
                      was and remains true, complete and correct in all material
                      respects and does not contain any errors, omissions,
                      inaccurate statement or lapses.

             (b)      The Seller and its Affiliates have timely paid or will
                      have timely paid all Tax due and payable prior to or on
                      Closing Date.

             (c)      The Seller and its Affiliates have made in the Financial
                      Statements adequate provisions for any Tax due, according
                      to applicable accounting principles.

             (d)      The Seller and its Affiliates have not incurred and will
                      not incur any liability for Tax other than Tax arisen in
                      the Ordinary Course of Business or as a result of the
                      transactions contemplated by this Agreement.

             (e)      Each of the Seller and its Affiliates is resident only in
                      the jurisdictions in which it is incorporated for Tax
                      purposes and does not have a permanent establishment or
                      other taxable presence in any jurisdiction other than the
                      jurisdictions in which it is resident for Tax purposes.

             (f)      The Seller and its Affiliates are not, nor have they been,
                      liable to pay a penalty, surcharge, fine or late payment
                      interest in connection with Tax in the five years ending
                      on the Closing Date, and, to Seller's best knowledge,
                      there exist no facts or circumstances which are likely to
                      cause the Seller or its Affiliates to incur liability for
                      any such penalty, surcharge, fine or late payment
                      interest.

                                       14
<Page>

             (g)      Neither Seller nor its Affiliates has received any
                      notification that any of their respective Tax returns have
                      been selected for audit by any Tax authority and there is
                      no pending inspection by any Tax authority in relation to
                      Tax, nor, to Seller's best knowledge, are Tax authorities
                      intending or in the process of starting an audit or an
                      inspection in relation to Tax.

             (h)      Neither Seller nor its Affiliates has received notice of
                      any Tax deficiency outstanding, proposed or assessed
                      against or allocable to Seller or to its Affiliates, nor
                      has Seller or its Affiliates executed any waiver of any
                      statute of limitations on the assessment or collection of
                      any Tax or executed or filed with any governmental body
                      any agreement now in effect extending the period for
                      assessment or collection of any taxes against Seller or
                      its Affiliates.

             (i)      There exists no dispute with the Tax authorities in any
                      Tax jurisdiction involving the Seller and its Affiliates
                      nor, to Seller's best knowledge, are Tax authorities in
                      any Tax jurisdiction intending or in the process of
                      asserting and/or initiating a claim.

             (j)      There are no Security Interests on any of the Acquired
                      Assets that arose in connection with any failure (or
                      alleged failure) to pay any Tax.

             (k)      There are no Tax liens upon, pending against or, to the
                      knowledge of Seller, threatened against any Acquired
                      Asset.

             (l)      Consummation of the transactions contemplated hereby will
                      not result in the imposition or creation of any Tax
                      obligations on the Acquired Assets, except for Tax
                      obligations, which remain the liability of Seller.

          5.12.     INTELLECTUAL PROPERTY

             (a)      GENERAL. The Seller owns or has the right to use pursuant
                      to licenses, sublicenses, agreements, or permissions all
                      Intellectual Property necessary or desirable for the
                      operation of the Acquired Assets as presently conducted,
                      free and clear of any and all encumbrances, lien, fees
                      rights, conditions or restrictions. Except as set forth in
                      Section 5.12(a) of the Disclosure Schedule, each item of
                      Intellectual Property owned or used in connection with the
                      Acquired Assets immediately prior to the Closing hereunder
                      will be owned or available for use by Buyer on identical
                      terms and conditions immediately subsequent to the Closing
                      hereunder. Seller has taken all necessary action to
                      maintain and protect each item of Intellectual property
                      that it owns or uses.

             (b)      NO INFRINGEMENT. Except as set forth in Section 5.12(b) of
                      the Disclosure Schedule, no claim has been made against
                      the Seller that the Intellectual Property infringes,
                      misappropriates, or otherwise comes into conflict with any
                      Intellectual Property rights of third parties, and none of
                      the directors and officers of Seller has ever received any
                      charge, complaint, claim, demand, or notice alleging any
                      such interference, infringement, misappropriation, or
                      violation. To the Seller's best knowledge, no third party
                      has interfered with, infringed upon, misappropriated, or
                      otherwise come into conflict with any Intellectual
                      Property rights of the Seller.

                                       15
<Page>

             (c)      OWNERSHIP OF INTELLECTUAL PROPERTY. All of the
                      Intellectual Property rights, evidenced by or embodied in:
                      (i) the Acquired Assets; (ii) any Invention or work
                      product developed or created by Seller in respect of the
                      Acquired Assets; (iii) any part of or any derivative work
                      of any of the foregoing, including their documentation, is
                      owned or duly licensed by the Seller. Seller has not
                      transferred, assigned or licensed any of its rights in any
                      Intellectual Property other than to Buyer pursuant to the
                      TTA and as set forth in Section 5.12(c) of the Disclosure
                      Schedule.

             (d)      OWNERSHIP OF IP RIGHTS: Section 5.12(d) to the Disclosure
                      Schedule identifies each patent or registration which has
                      been issued to the Seller with respect to any of its
                      Intellectual Property, identifies each pending patent
                      application or application for registration which the
                      Seller has made with respect to any of its Intellectual
                      Property, and identifies each license, agreement, or other
                      permission which the Seller has granted to any third party
                      with respect to any of its Intellectual Property (together
                      with any exceptions). Seller has delivered to Buyer,
                      within the Disclosure Schedule, correct and complete
                      copies of all such patents, registrations, applications,
                      licenses, agreements, and permissions (as amended to date)
                      and has made available to Buyer correct and complete
                      copies of all other written documentation evidencing
                      ownership and prosecution (if applicable) of each such
                      item. Section 5.12(d) to the Disclosure Schedule also
                      identifies each trade name or unregistered trademark used
                      in connection with the Acquired Assets. With respect to
                      each item of Intellectual Property required to be
                      identified in Section 5.12(d) to the Disclosure Schedule,
                      the Seller possesses all right, title, and interest in and
                      to the item, free and clear of any Security Interest.

             (e)      INTELLECTUAL PROPERTY OWNED BY ANY THIRD PARTY. Section
                      5.12(e)(i) to the Disclosure Schedule identifies each
                      item of Intellectual Property that any third party owns
                      and that the Seller uses, with regard to the Acquired
                      Assets, pursuant to license, sublicense, agreement, or
                      permission. Seller has delivered to Buyer, within the
                      Disclosure Schedule, correct and complete copies of all
                      such licenses, sublicenses, agreements, and permissions
                      (as amended to date). With respect to each item of
                      Intellectual Property required to be identified in Section
                      5.12(e) of the Disclosure Schedule, the license,
                      sublicense, agreement, or permission covering the item is
                      legal, valid, and enforceable and, except as set forth in
                      Section 5.12(e)(ii) of the Disclosure Schedule, shall stay
                      such on identical terms following the consummation of the
                      transactions contemplated hereby.

             (f)      PROTECTION OF IP RIGHTS AND TRADE SECRETS. The Seller has
                      taken all reasonable and customary actions to maintain and
                      protect each item of Intellectual Property that is owned
                      or used by it. All Confidential Information of the Seller
                      is being (and has been) continuously maintained in
                      confidence by taking reasonable precautions to protect and
                      prevent its disclosure to unauthorized parties.

                                       16
<Page>

             (g)      PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each
                      Employee, consultant and officer of the Seller has
                      executed an agreement with the Seller pertaining to
                      non-competition, confidentiality and assignment of
                      inventions, or has otherwise sufficiently vested in the
                      Seller good title to the work product or result of
                      endeavors of every Employee, officer or contractor, with
                      respect to the Acquired Assets, free of any retained
                      rights or royalty or similar obligations. To Seller's
                      knowledge: (i) none of the said Employees, officers or
                      consultants is in violation thereof; (ii) no Employee of
                      the Seller breached any third party contract with respect
                      to any item of the Intellectual Property; (iii) no
                      Employee of the Seller or current or former consultant or
                      independent contractor retained by the Seller has, or has
                      alleged to have any right, title or interest in the
                      Intellectual Property.

           5.13.    TANGIBLE ASSETS. The Seller owns or leases all buildings,
                    machinery, equipment, and other tangible assets that are
                    included within the Acquired Assets. Each such tangible
                    asset is free from material defects (patent and latent), has
                    been maintained in accordance with industry practice, is in
                    good operating condition and repair (subject to normal wear
                    and tear), and is suitable for the purposes for which it
                    presently is used and presently is proposed to be used. No
                    such asset is shared by the Seller with any other person.
                    The tangible assets included in the Acquired Assets shall
                    constitute all tangible assets as are used in the conduct of
                    the business of the Seller in the Ordinary Course of
                    Business on the Closing Date, and, subject to Section 5.13
                    of the Disclosure Schedule, comprise all the property,
                    rights and assets necessary for Buyer to carry on Seller's
                    business in the manner and to the extent which it is
                    presently conducted.

           5.14.    INVENTORY. The Inventory consists of items, which are good
                    and merchantable and fit for the purpose for which they were
                    procured or manufactured, and none of which is slow-moving,
                    obsolete, damaged, or defective. The quantity of the
                    Inventory on the date hereof is, and on the Closing date
                    will be, consistent with the levels maintained by the Seller
                    in the Ordinary Course of Business.

           5.15.    CONTRACTS. Section 5.15 of the Disclosure Schedule lists all
                    material contracts and other agreements to which the Seller
                    is a party. Seller has delivered to Buyer, a correct and
                    complete copy of each written agreement listed in Section
                    5.15 of the Disclosure Schedule (as amended to date) and a
                    written summary setting forth the terms and conditions of
                    each oral agreement referred to in Section 5.15 of the
                    Disclosure Schedule. With respect to each such agreement,
                    except as set forth in Section 5.15(b) of the Disclosure
                    Schedule: (i) the agreement is legal, valid, binding,
                    enforceable, and in full force and effect; (ii) the
                    agreement will continue to be legal, valid, binding,
                    enforceable, and in full force and effect on identical terms
                    following the consummation of the transactions contemplated
                    hereby; (iii) neither Seller, nor to the Seller's best
                    knowledge, any third party is in breach or default, and no
                    event has occurred which with notice or lapse of time would
                    constitute a breach or default, or permit termination,
                    modification, or acceleration, under the agreement; and (iv)
                    neither Seller, nor to the Seller's best knowledge, no party
                    has repudiated any provision of the agreement.

                                       17
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           5.16.    NOTES AND ACCOUNTS RECEIVABLE. All accounts, notes and other
                    receivables of the Seller are reflected properly on the
                    Financial Statements or in Section 5.16 to the Disclosure
                    Schedule, are valid receivables subject to no setoffs or
                    counterclaims, are current and collectible, and will be
                    collected in accordance with their terms at their recorded
                    amounts, subject only to the reserve for bad debts in the
                    Ordinary Course of Business.

           5.17.    INSURANCE. The Seller is covered by insurance that is in
                    scope and amount customary and reasonable for the Acquired
                    Assets. Seller delivered to Buyer, within the Disclosure
                    Schedule, correct and complete copies of all of the
                    insurance policies to which the Seller has been a party, a
                    named insured, or otherwise the beneficiary of coverage at
                    any time as of July 2000 and with respect to each policy
                    there are no pending or asserted claims as to which any
                    insurer has denied liability, and there are no claims under
                    any such insurance policy that have been disallowed or
                    improperly filed. Section 5.17 to the Disclosure Schedule
                    sets forth claims experience of the Seller since July 2000.
                    With respect to each insurance policy described herein no
                    party to the policy has repudiated any provision thereof.
                    Seller has received no notice from any insurance carrier of
                    the intention of such carriers to discontinue any insurance
                    coverage afforded to Seller.

           5.18.    FILINGS. Seller and its Affiliates have timely filed all
                    required forms, reports and documents with the SEC and any
                    other competent authority, including tax authorities (the
                    "TIOGA DOCUMENTS"). As of the time it was filed with the SEC
                    or any other competent authority, including tax authorities,
                    none of the Tioga Documents, including any financial
                    statements or schedules included or incorporated by
                    reference therein contains any untrue statement of a
                    material fact or omits to state a material fact required to
                    be stated therein or necessary in order to make the
                    statements therein, in the light of the circumstances under
                    which they were made, not misleading.

           5.19.    LITIGATION. Except as set forth in Section 5.19 to the
                    Disclosure Schedule, there are no instances in which the
                    Seller (i) is subject to any outstanding injunction,
                    judgment, order, decree, ruling, or charge or (ii) is a
                    party or, to the Seller's best knowledge, is threatened to
                    be made a party to any action, suit, proceeding, hearing, or
                    investigation of, in, or before any court or quasi-judicial
                    or administrative agency of any state, local, or foreign
                    jurisdiction or before any arbitrator in respect of the
                    Acquired Assets. None of the actions, suits, proceedings,
                    hearings, and investigations set forth in Section 5.19 to
                    the Disclosure Schedule could result in any Material Adverse
                    Effect.

           5.20.    CUSTOMERS AND DISTRIBUTION CHANNELS. All sales contracts and
                    orders with customers and contracts with the distribution
                    channels of the Seller (including, OEM, VAR and
                    distributors) were entered into by or on behalf of the
                    Seller in the Ordinary Course of Business for usual
                    quantities and at normal prices. During the 24-month period
                    preceding the date hereof, no material supplier of the
                    Seller has indicated that it will stop, or decrease the rate
                    of, supplying materials, products or services to the Seller
                    and Seller has no reason to believe that any customer or any
                    OEM, VAR or distributors will cease to do business with
                    Buyer, after, or as a result of, the consummation of any
                    transactions contemplated hereby or that any customer or
                    OEM, VAR or distributors is threatened with bankruptcy or
                    insolvency. Seller does not know of any fact, condition or
                    event that would adversely affect its relationship with any
                    customer or OEM, VAR or distributors.

                                       18
<Page>

           5.21.    PRODUCT WARRANTY. Each of the product lines included in the
                    Acquired Assets that has been manufactured, sold, leased, or
                    delivered by Seller was manufactured in conformity with all
                    applicable specifications and contractual commitments and
                    all express and implied warranties related thereto, and the
                    Seller does not have any liability (and, to Seller's best
                    knowledge there is no basis for any present or future
                    action, suit, proceeding, hearing, investigation, charge,
                    complaint, claim, or demand against it giving rise to any
                    liability) for replacement or repair thereof or other
                    similar damages in connection therewith.

           5.22.    PRODUCT LIABILITY. The Seller does not have any liability
                    (and to Seller's best knowledge there is no basis for any
                    present or future action, suit, proceeding, hearing,
                    investigation, charge, complaint, claim, or demand against
                    it giving rise to any liability) arising out of any injury
                    to individuals or property as a result of the ownership,
                    possession, or use of any Acquired Assets manufactured,
                    licensed, sold, leased, or delivered by the Seller.

           5.23.    EMPLOYEES.

             (a)      EMPLOYMENT AGREEMENTS. The Disclosure Schedule includes a
                      list of all written (or summary description of any oral)
                      promises, agreements, arrangements, understandings or
                      policies, with officers, directors, Employees (including
                      part-time, full time and sub-contractor Employees) and
                      consultants (other than attorneys and accountants) of the
                      Seller which are presently in effect, and the name, title
                      or position, terms and conditions of employment, wages and
                      any other compensation (including bonuses, commissions,
                      and deferred compensation), the date of the most recent
                      increase, years of service, pensions (including those
                      required by all laws), retirement benefits, company cars,
                      profit sharing, any interests in any incentive
                      compensation plan and unused accrued vacation with respect
                      to each such person.

             (b)      With respect to the Seller: (i) Except as set forth in
                      Section 5.23(b) of the Disclosure Schedule, the Seller
                      is not a party to any collective labor agreement or
                      arrangement or to any labor custom and the Seller does not
                      have any agreement or arrangement with a trade union or
                      the Seller's workers committee (Va'ad Ha'Ovdim); (ii) as
                      of the date hereof, there are no outstanding claims
                      against the Seller by any person who is now or has been or
                      claims to have been an officer or Employee of the Seller,
                      and there have been no disputes between the Seller and any
                      of its Employees; (iii) the Seller has complied with all
                      customs, agreements, legislative or other official
                      provisions relating to the Employees, and their terms of
                      employment; (iv) any and all amounts due to Employees of
                      the Seller as of the Closing Date either on account of
                      wages, annual leave, sick pay, and any other compensation
                      or reimbursement or payment according to law or contract,
                      and all amounts required to cover the Seller's liability
                      with respect to termination of employment as of the
                      Closing Date, pursuant to any law, custom, agreement or
                      arrangement were fully paid or fully funded, or provided
                      and accrued for in the Financial Statements and all such
                      amounts with respect to the period until the Closing Date
                      were either fully paid or provided and accrued for in the
                      Financial Statements or are reflected in Section 5.23(b)
                      to the Disclosure Schedule. No cause of action exists
                      giving right to Employees to any claim for compensation or
                      termination of employment beyond the Employee Related
                      Liabilities (including the release of funds deposited with
                      Employees' pension funds, early retirement funds,
                      education fund (Keren Hishtalmut)), or for payment of any
                      compensation as a result of the transactions contemplated
                      hereby.

                                       19
<Page>

             (c)      LABOR RELATIONS; COMPLIANCE. The Seller has complied with
                      all laws applicable to its Employees and with all
                      agreements, arrangements, promises and obligations
                      relating thereto. There has not been, and to Seller's
                      knowledge, there has not been threatened, any proceeding
                      against or affecting the Seller relating to the alleged
                      violation of any applicable laws or agreements,
                      undertaking, promises or any other obligation pertaining
                      to labor relations or employment matters. The Seller is
                      not liable for the payment of any compensation, damages,
                      taxes, fines, penalties, or other amounts, however
                      designated, for failure to comply with any of the
                      foregoing legal or contractual requirements.

             (d)      LIST OF EMPLOYEES. Section 5.23(d) of the Disclosure
                      Schedule lists all Employees as of the Closing Date.

           5.24.    BENEFIT PLANS. With respect to the Seller: all amounts which
                    the Seller is required by law, custom or by agreement to
                    deduct from its Employees' salaries and/or transfer to such
                    Employees' pension, severance pay, early retirement funds,
                    life insurance ('Bituach Menahalim'), incapacity insurance,
                    continuing education fund, bonus or vacation, have been duly
                    paid into the appropriate fund or funds or provided and
                    accrued for in the Financial Statements in accordance with
                    US GAAP, and the Seller does not have any outstanding
                    obligation to make any such transfer or provision to any
                    Employee on a consistent basis. Section 5.24(i) of the
                    Disclosure Schedule, (i) lists retirement, stock option,
                    stock purchase, incentive, bonus, life, medical, vision,
                    health, disability or profit sharing plans, and other
                    Employee compensation or benefit plans, agreements,
                    policies, contracts, arrangements or commitments, including
                    without limitation severance agreements, holiday, vacation
                    or similar matters, relating to officers or Employees of
                    Seller; and (ii) sets forth Seller's contributions made to
                    such Plans, all as of December 31, 2002. Seller has
                    delivered correct and complete copies of all plans,
                    including amendments thereto.

           5.25.    [RESERVED].

                                       20
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           5.26.    EXPORT CONTROL LAWS. With respect to all Acquired Assets,
                    Seller has complied with all relevant Export Control Laws
                    applicable to the products sold by Seller. No obligation of
                    Seller under any Transferred Contract violates the terms of
                    any relevant Export Control Law in any relevant
                    jurisdiction.

           5.27.    DISCLOSURE. The representations and warranties of Seller in
                    this Agreement, are each accurate, correct and complete in
                    all material respects, and do not contain any untrue
                    statement of a material fact or omit to state a material
                    fact necessary in order to make the statements and
                    information contained in this Agreement not misleading.
                    Buyer has the right to rely fully upon the representations,
                    warranties, covenants and agreements of Seller contained in
                    this Agreement or any Exhibit or Schedule hereto or document
                    executed or delivered in connection with or pursuant to any
                    of the foregoing.

           5.28.    SOLVENCY. Seller is not insolvent, nor will Seller be
                    rendered insolvent by the occurrence of the transactions
                    contemplated by this Agreement. In addition, immediately
                    after giving effect to the consummation of the transactions
                    contemplated by this Agreement, (1) Seller will be able to
                    pay its debts as they become due, (2) the property of Seller
                    does not and will not constitute unreasonably small capital,
                    and Seller will not have unreasonably small capital and will
                    not have insufficient capital with which to conduct its
                    present or proposed business, and (3) taking into account
                    pending and threatened litigation, final judgments against
                    Seller in actions for money damages are not reasonably
                    anticipated to be rendered at a time when, or in amounts
                    such that, Seller will be unable to satisfy any such
                    judgments promptly in accordance with their terms (taking
                    into account the maximum probable amount of such judgments
                    might be rendered). The cash available to Seller, after
                    taking into account all other anticipated uses of the cash
                    of Seller, will be sufficient to pay all such judgments
                    promptly in accordance with their terms.

           5.29.    CORPORATE NAME. The use of the corporate name of Seller does
                    not infringe the right of any third party nor is it
                    confusingly similar with the corporate name of any third
                    party. After the Closing Date, no person or business entity
                    other than Buyer will be authorized directly or indirectly
                    to use the corporate name of Seller or any name deceptively
                    or confusingly similar thereto.

     6.  BUYER'S REPRESENTATIONS AND WARRANTIES

Buyer represents and warrants to Seller that the statements contained in this
Section 6 are correct and complete as of the date of this Agreement.

           6.1.     ORGANIZATION OF BUYER. Each of the Buyer entities is a
                    corporation duly organized, validly existing, and in good
                    standing under the laws of its respective jurisdiction.

           6.2.     AUTHORIZATION OF TRANSACTION. Buyer has full power and
                    authority (including full corporate power and authority) to
                    execute and deliver this Agreement and to perform its
                    obligations hereunder. This Agreement constitutes the valid
                    and legally binding obligation of Buyer, enforceable in
                    accordance with its terms and conditions.

                                       21
<Page>

           6.3.     NO CONTRAVENTION. To Buyer's best knowledge, neither the
                    execution and the delivery of this Agreement, nor the
                    consummation of the transactions contemplated hereby, will
                    (i) violate any constitution, statute, regulation, rule,
                    injunction, judgment, order, decree, ruling, charge, or
                    other restriction of any government, governmental agency, or
                    court to which Buyer is subject or any provision of its
                    articles of association or (ii) conflict with, result in a
                    breach of, constitute a default under, result in the
                    acceleration of, create in any party the right to
                    accelerate, terminate, modify, or cancel, or require any
                    notice under any agreement, contract, lease, license,
                    instrument, or other arrangement to which Buyer is a party
                    or by which it is bound or to which any of its assets is
                    subject.

           6.4.     EXPERIENCE; RECEIPT OF INFORMATION. Buyer represents that it
                    has such knowledge and experience in business matters so as
                    to be capable of evaluating the merits and risks relating to
                    the acquisition of the Acquired Assets, has conducted due
                    diligence of Seller and the Acquired Assets and assumption
                    of Assumed Liabilities and has reviewed and inspected all of
                    the data and information provided to it by the Seller in
                    connection with this Agreement, the TTA and the Services
                    Agreement. This representation shall not prejudice Buyer's
                    reliance on the Seller's representations and warranties set
                    forth in this Agreement.

     7.  ADDITIONAL UNDERSTANDINGS.

     Because (i) under the Reference Balance Sheet, the Seller has accrued
     transaction expenses of approximately US$350,000, that pursuant to this
     Agreement are to be borne by the Buyer, and (ii) under same Reference
     Balance Sheet, an amount of approximately US$350,000 is to be received from
     the OCS and, pursuant to this Agreement, is to be transferred by Seller to
     Buyer; the parties agree that, for the sake of procedural simplicity, the
     above items will be set off against each other so that the Seller shall
     bear and pay such transaction expenses and shall be entitled to such
     receivable from the OCS. The parties agree that, other than as set forth in
     Sections 5.8(b) and 5.19(e) of the Disclosure Schedule and costs and
     expenses of Employees' travel in connection with this Agreement, Seller has
     not accrued or incurred any additional transaction expenses that are to be
     borne by Buyer and any additional expenses in connection with the
     transaction, if any, shall not be assumed by Buyer and shall be deemed an
     Excluded Liability.

     8.  [RESERVED]

     9.  POST CLOSING COVENANTS

           9.1.     CONTINUED ASSISTANCE. Following the Closing, at Buyer's
                    request and without further consideration, Seller shall
                    execute, acknowledge and deliver such documents, instruments
                    or assurances and take such other action as Buyer may
                    reasonably request to more effectively assign, convey and
                    transfer any of the assets, properties, rights or claims
                    with regard to the Acquired Assets. Following the Closing,
                    Seller shall refer to Buyer as promptly as practicable any
                    telephone calls, letters, orders, notices, requests,
                    inquiries and other communications relating to the Acquired
                    Assets. Seller shall cooperate in an orderly transfer of the
                    Acquired Assets.

                                       22
<Page>

           9.2.     RECORDS AND DOCUMENTS. For three years following the Closing
                    Date, Seller shall grant to Buyer and its representatives,
                    at Buyer's request, access to and the right to make copies
                    of those records and documents related to the Seller,
                    possession of which is retained by Seller (if any), as may
                    be necessary or useful in connection with Buyer's conduct of
                    the Acquired Assets after the Closing. If during such period
                    Seller elects to dispose of such records, Seller shall first
                    give Buyer sixty (60) days' written notice, during which
                    period Buyer shall have the right to take such records
                    without further consideration.

           9.3.     CONFIDENTIALITY. After the Closing Date, except as may be
                    required for tax purposes or other regulatory purposes,
                    neither Seller nor any of the respective successors and
                    assigns of Seller: shall (i) retain any document, databases
                    or other media embodying any Confidential Information or
                    proprietary know-how which constitutes a part of the
                    Acquired Assets or use, publish or disclose to any third
                    person any such Confidential Information or proprietary
                    know-how, or (ii) use, publish or disclose any Confidential
                    Information concerning the Acquired Assets, or Buyer or its
                    Affiliates.

           9.4.     COVENANT NOT TO COMPETE.

             (a)      For a period of three (3) years from and after the
                      Closing, Seller will not engage in, directly or
                      indirectly, any business that competes with Seller's
                      business as conducted prior to Closing, including without
                      limitation, in the development, making, marketing, or
                      selling products of xDSL semiconductor business that
                      compete with the Acquired Assets. Seller acknowledges that
                      the restrictions contained in this Section 9.4 are fair
                      and reasonably required to protect the interest of Buyer
                      under this Agreement. If the final judgment of a court of
                      competent jurisdiction declares that any term or provision
                      of this Section 9.4 invalid or unenforceable, the parties
                      agree that the court making the determination of
                      invalidity or unenforceability shall have the power to
                      reduce the scope, duration, or area of the term or
                      provision, to delete specific words or phrases, or to
                      replace any invalid or unenforceable term or provision
                      with a term or provision that is valid and enforceable and
                      that comes closest to expressing the intention of the
                      invalid or unenforceable term or provision, and this
                      Agreement shall be enforceable as so modified after the
                      expiration of the time within which the judgment may be
                      appealed.

             (b)      For a period of two (2) years from the Closing Date,
                      whether for its own benefit or for the benefit of any
                      other person, Seller shall not solicit the professional
                      services of any employee of the Buyer previously employed
                      by Seller or otherwise interfere with the relationships
                      between Buyer or any Affiliate and any such person.

           9.5.     POWER OF ATTORNEY. Seller hereby irrevocably appoints Buyer
                    as Seller's agent and attorney-in-fact, with full power and
                    authority in the place of Seller and in the name of Seller
                    or otherwise, from time to time in Buyer's discretion to
                    take any action and to execute any instrument which Buyer
                    may reasonably deem necessary or advisable to fulfill
                    Seller's obligations, rights or to accomplish the purposes
                    of this Agreement. Seller hereby ratifies and confirms all
                    that Buyer may lawfully do by virtue of this Power of
                    Attorney; provided, however that nothing in this Power of
                    Attorney shall permit Buyer to take any actions on behalf of
                    Seller which would prejudice Seller's rights under the
                    Escrow Agreement.

                                       23
<Page>

           9.6.     LITIGATION SUPPORT. In the event and for so long as any
                    party actively is contesting or defending against any
                    action, suit, proceeding, hearing, investigation, charge,
                    complaint, claim, or demand in connection with (i) any
                    transaction contemplated under this Agreement, or (ii) any
                    fact, situation, circumstance, status, condition, activity,
                    practice, plan, occurrence, event, incident, action, failure
                    to act, or transaction on or prior to the Closing Date
                    involving the Acquired Assets, the other party will
                    cooperate with it, or its counsel, in the contest or
                    defense, make available their personnel, and provide such
                    testimony and access to their books and records as shall be
                    necessary in connection with the contest or defense, all at
                    the sole cost and expense of the contesting or defending
                    party (unless the contesting or defending party is entitled
                    to indemnification therefor under Section below).

           9.7.     TRANSITION. Seller will not take any action that is designed
                    or intended to have the effect of discouraging any lessor,
                    licensor, customer, distributor, value added reseller,
                    supplier, from maintaining the same business relationships
                    with Buyer after the Closing as it maintained with the
                    Seller prior to the Closing. Seller will refer all customer
                    inquiries relating to the Acquired Assets to Buyer from and
                    after the Closing.

           9.8.     CHANGE OF CORPORATE NAME. As soon as practicable after
                    Closing, Seller shall execute an amendment to its Articles
                    of Association, changing its corporate name to a name that
                    does not include the word "Tioga" or any other name under
                    which Seller presently conducts business.

           9.9.     VALUE ADDED TAX. All VAT, including interest and penalties
                    thereon as determined by the VAT authorities (if any), with
                    respect to amounts paid or payable under the Services
                    Agreement, the TTA and this Agreement will be borne by the
                    Buyer. For such purpose, the parties agree as follows: (a)
                    Seller shall cooperate with Buyer and its accountants in an
                    effort to obtain a ruling from the VAT Authorities in Israel
                    for certain VAT relief with respect to the amounts set forth
                    above; (b) upon the earlier of (i) two months following the
                    Closing, and (ii) the VAT authorities' first demand, the
                    Buyer shall pay to Seller (x) the VAT amounts previously
                    invoiced by Seller to Buyer under the Services Agreement,
                    and (y) any additional VAT amounts relating to the Services
                    Agreement (including interest and penalties thereon, if any)
                    and required by the VAT Authorities, for which Seller shall
                    invoice Buyer at such time; (c) upon the VAT authorities'
                    first demand, the Buyer shall pay to Seller any VAT
                    (including interest and penalties thereon as determined by
                    the VAT authorities, if any) due with respect to the
                    Consideration paid by Buyer to Seller hereunder and shall
                    remain liable for any such amount throughout the statute of
                    limitations period; (d) upon the VAT authorities' first
                    demand, Buyer shall pay to Seller the VAT due with respect
                    to all amounts paid or payable by Buyer to Seller pursuant
                    to the TTA. For purposes hereof, the VAT authorities' first
                    demand shall be in writing unless otherwise made in the
                    presence of an authorized representative of the Buyer.

                                       24
<Page>

           9.10.    INSURANCE. Seller shall assist and cooperate with Buyer, at
                    Buyer's expense, to facilitate the Buyer's receipt of any
                    amounts recoverable pursuant to insurance policies held by
                    Seller and covering a Liability assumed by Buyer hereunder;
                    and any proceeds received by Seller pursuant to such
                    insurance policies shall be transferred to Buyer to the
                    extent Buyer has incurred such Liability.

     10. INDEMNIFICATION PROVISIONS

           10.1.    INDEMNIFICATION IN BENEFIT OF BUYER. Subject to Section 10.2
                    below, during the period ending on the later of (i) thirty
                    (30) days following the Closing Date, and (ii) twenty days
                    following receipt by ST NV (at the address set forth below)
                    of the Closing Financial Statements of Seller (the "ESCROW
                    PERIOD"), Seller shall defend, indemnify, and hold Buyer and
                    its employees, directors, officers, shareholders and agents
                    (the "INDEMNITEES") harmless from and against, and reimburse
                    them with respect to, any and all liabilities, direct
                    losses, claims, costs, damages, demands, penalties or other
                    expenses (including reasonable attorney's fees and other
                    legal expenses), awards or recoveries, finally assessed by a
                    court of competent jurisdiction or arbitration tribunal and
                    actually paid by the Indemnitees (collectively "DAMAGES"),
                    not exceeding in the aggregate US$1,800,000 (the
                    "INDEMNIFIABLE AMOUNT") of every nature whatsoever incurred
                    by the Indemnities by reason of or arising out of or in
                    connection with:

             (a)      any misrepresentation or breach of warranty made by Seller
                      in this Agreement.

             (b)      any breach by Seller of any covenant, agreement or
                      undertaking made by it in this Agreement.

           10.2.    CONDITIONS TO INDEMNIFICATION. Notwithstanding any other
                    provision in Section 10.1, Buyer shall be entitled to
                    indemnification only if the aggregate Indemnifiable Amounts
                    exceed fifty thousand dollars (US$50,000) (the "THRESHOLD
                    AMOUNT"), provided that at such time as the amount to which
                    the Buyer is entitled to be indemnified exceeds the
                    Threshold Amount, the Buyer shall be entitled to be
                    indemnified up to the full Indemnifiable Amount including
                    the Threshold Amount. In addition, in the event of a third
                    party claim, the above indemnification is conditioned upon
                    the Buyer (i) giving the Seller prompt notice in writing of
                    such claim, suit, proceeding or threat thereof, (ii)
                    permitting the Seller sole control, through counsel of its
                    choice to defend and/or settle such suit and (iii) giving
                    Seller all the needed information, assistance and authority,
                    at the Indemnifying party's expense, to enable it to defend
                    or settle such claim.

                                       25
<Page>

           10.3.    EXCLUSIVE REMEDY. The Buyer acknowledges and agrees that
                    except for the remedy of specific performance for
                    enforcement of this Agreement, the Escrow Amount is the sole
                    and exclusive remedy (except in the case of fraud in which
                    case Buyer reserves all rights available to it under the
                    law) with respect to any and all claims relating to the
                    subject matter of this Agreement and all ancillary
                    documents.

     11. [RESERVED]

     12. MISCELLANEOUS

           12.1.    SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
                    upon and inure to the benefit of the parties named herein
                    and their respective successors and permitted assigns.
                    Subject to Section 2.2 above, each party may assign either
                    this Agreement or any of its rights, interests, or
                    obligations hereunder without the prior written approval of
                    the other party; provided, however that Buyer may (i) assign
                    any or all of its rights and interests hereunder to one or
                    more of its Affiliates and (ii) designate one or more of its
                    Affiliates to perform its obligations hereunder (in any or
                    all of which cases Buyer nonetheless shall remain
                    responsible for the performance of all of its obligations
                    hereunder).

           12.2.    GOVERNING LAW. This Agreement shall be governed by and
                    construed in accordance with the internal laws of the State
                    of New York, without giving effect to its conflict of laws
                    principles. If a dispute arises out of or related to this
                    Agreement, the parties agree to submit the dispute to
                    arbitration. The arbitration proceedings will be conducted
                    by a single arbitrator selected by the parties or, if the
                    parties cannot agree on the identity of the arbitrator, by a
                    panel of three arbitrators, one selected by each of the
                    parties and the third mutually selected by the other two
                    arbitrators. The decision of the arbitrators shall be final
                    and binding upon the parties. The cost of the arbitration,
                    including the fees and expenses of the arbitrator(s), will
                    be shared equally by the parties unless the award otherwise
                    provides. The arbitration shall be conducted in the English
                    language and all hearings shall be held in New York.

           12.3.    AMENDMENTS AND WAIVERS. No amendment of any provision of
                    this Agreement shall be valid unless the same shall be in
                    writing and signed by Buyer and Seller. No waiver by any
                    party of any default, misrepresentation, or breach of
                    warranty or covenant hereunder, whether intentional or not,
                    shall be deemed to extend to any prior or subsequent
                    default, misrepresentation, or breach of warranty or
                    covenant hereunder or affect in any way any rights arising
                    by virtue of any prior or subsequent such occurrence.

           12.4.    SEVERABILITY. Any term or provision of this Agreement that
                    is invalid or unenforceable in any situation in any
                    jurisdiction shall not affect the validity or enforceability
                    of the remaining terms and provisions hereof or the validity
                    or enforceability of the offending term or provision in any
                    other situation or in any other jurisdiction.

           12.5.    PARTICIPATION. The parties have participated jointly in the
                    negotiation and drafting of this Agreement. In the event an
                    ambiguity or question of intent or interpretation arises,
                    the this Agreement shall be construed as if drafted jointly
                    by the parties and no presumption or burden of proof shall
                    arise favoring or disfavoring any party by virtue of the
                    authorship of any of the provisions of the this Agreement.

                                       26
<Page>

           12.6.    STAMP DUTY. Stamp duty payable in respect of this Agreement,
                    if any, shall be borne by the parties in equal share.

           12.7.    AGREEMENT. This Agreement sets forth and constitutes the
                    entire agreement between the parties hereto with respect to
                    the subject matter hereof, and supersedes any and all prior
                    agreements, understandings, promises and representations
                    made by either party to the other, written, electronic, or
                    oral, concerning the subject matter hereof and the terms
                    applicable hereto.

           12.8.    HEADINGS. The Section and other headings contained in this
                    Agreement are for reference purposes only and shall not
                    affect in any way the meaning or interpretation of this
                    Agreement.

           12.9.    INCORPORATION OF EXHIBITS AND SCHEDULES. Any references to
                    Sections, Schedules and Exhibits are to Sections of, and
                    Schedules and Exhibits to, this Agreement unless otherwise
                    indicated. The Exhibits and Schedules identified in this
                    Agreement are incorporated herein by reference and made a
                    part hereof.

           12.10.   COUNTERPARTS. This Agreement may be executed in one or more
                    counterparts, each of which shall be deemed an original but
                    all of which together will constitute one and the same
                    instrument.

           12.11.   NOTICES. All notices, requests, demands, claims, and other
                    communications hereunder will be in writing. Any notice,
                    request, demand, claim, or other communication hereunder
                    shall be deemed duly given if (and then two business days
                    after) it is sent by registered or certified mail, return
                    receipt requested, postage prepaid, and addressed to the
                    intended recipient as set forth below or if sent by
                    facsimile to the number set forth below:

   If to Buyer:

                 General Manager, TPA
                 STMicroelectronics N.V.
                 39, Chemin du Champ des Filles
                 1228 Geneva
                 Switzerland
                 Fax No: +41 22 929 5878

    with a copy to

                 General Counsel,
                 STMicroelectronics N.V.
                 39, Chemin du Champ des Filles
                 1228 Geneva
                 Switzerland
                 Fax No.: + 41 22 929 5878

                                       27
<Page>

                 and to:

                 Eitan Pearl Latzer Cohen-Zedek
                 2 Gav-Yam Center, 7 Shenkar St,
                 Herzlia 46733, Israel
                 Fax No.: +972 9 9709001
                 Attention: Iris Pappo, Adv.

   If to the Seller:

                 Mr. Izhak Tamir, Chairman
                 Tioga Technologies Ltd.
                 C/O Orckit Communications Ltd.
                 126 Yigal Alon St.
                 Tel Aviv, Israel
                 Fax No.: +972 3 696 5678

   with a copy to:

                 Naschitz, Brandes & Co.
                 5 Tuval Street
                 Tel-Aviv, Israel
                 Fax: 972 3 623 5021
                 Attention: Sharon A. Amir, Adv.

                    Any party may send any notice, request, demand, claim, or
                    other communication hereunder to the intended recipient at
                    the address set forth above using any other means (including
                    personal delivery, expedited courier, messenger service,
                    telecopy, telex, ordinary mail, or electronic mail), but no
                    such notice, request, demand, claim, or other communication
                    shall be deemed to have been duly given unless and until it
                    actually is received by the intended recipient. Any party
                    may change the address to which notices, requests, demands,
                    claims, and other communications hereunder are to be
                    delivered by giving the other party notice in the manner
                    herein set forth.

           12.12.   NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
                    confer any rights or remedies upon any person other than the
                    parties and their respective successors and permitted
                    assigns.

                                       28
<Page>

IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the date first above written.

STMICROELECTRONICS N.V.

By:  /s/ Aldo Romano

Name:  Aldo Romana

Title:  Corp. V.P.


ST MICROELECTRONICS LTD.

By:  /s/ Francois Guibert

Name:  Francois Guibert

Title:  Group V.P.


TIOGA TECHNOLOGIES LTD.

By:  /s/ I. Tamir

Name:  Izhak Tamir

Title:  Chairman of the Board of Directors

                                       29