CONSULTING
AGREEMENT

    


    This
Consulting Agreement (the “Agreement”) is made and
entered into this day of August, 12 August 2009, by and between Enertec Systems
2001 Ltd., a private company registered in the State of Israel with company
number 513144261 (hereinafter: “Company”) and D.L Capital
Ltd., a corporation organized under the laws of the State of Israel (“DL”).

    (Company
and DL are hereinafter referred to collectively as the “Parties” and individually as a
“Party”.)

    


    WHEREAS DL has expertise in
the areas of finance, business development, management and other matters
relating to the business and operations of Company; and

    


    WHEREAS DL, being the
controlling shareholder of Lapis Technologies, Inc., a Delaware corporation of
19 W. 34th Street, Suite 1008, New York, NY 10001, the United States of America
("Lapis"), which is the ultimate
parent company of the Company, proposed to Company that, as part of efficiency
and cost saving measures of Company, certain limited management and consulting
services will be provided to Company by DL pursuant to this Agreement and
subject to any applicable law; and

    


    WHEREAS Company desires to
purchase those certain affairs of management and consulting services to be
provided by DL on the terms and conditions as set forth herein below;
and

    


    WHEREAS DL is interested in
supplying Company the aforesaid services, and has agreed to supply the defined
Services to Company on the terms and conditions set forth in this
Agreement.

    


    NOW, THEREFORE, in
consideration of the premises and of the mutual promises, covenants, agreements,
undertakings, representations and warranties herein contained, the Parties
hereto agree as follows:

    


    
      
        	
                1.

              	
                Preamble and
      Headings

              


      

    

    


    
      	
               
      

            	
              1.1

            	
              The
      preamble and exhibits to this Agreement and the statements of the Parties
      contained herein, constitute an inseparable part
  hereof.

            


    

    


    
      	
               
      

            	
              1.2

            	
              The
      headings in this Agreement are for purposes of reference only, are not a
      material part hereof and shall not be used in its
      interpretation.

            


    

    


    
      
        	
                2.

              	
                Engagement

              


      

    

    


    Company
hereby engages DL to provide it with consulting, managerial and administrative
services in relation to the affairs and day-to-day operations of Company as set
forth herein, which shall include, business development, marketing, financing
issues management, banks, credit and investment banking services (the “Services”), and DL agrees to
provide such services, upon the terms and conditions set out
herein.

    


    
      
        	
                3.

              	
                Services

              


      

    

    


    
      	
               
      

            	
              3.1

            	
              DL
      shall provide Company the Services during the term of this
      Agreement.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              3.2

            	
              The
      Services will be performed by DL through persons, having appropriate
      experience and capabilities, to be designated by DL for such purpose as DL
      in its sole discretion will determine from time to time (the “Staff”). The employment
      or other engagement by DL of such Staff shall be on terms to be determined
      by DL at its sole discretion and shall be at DL’s
  expense.

            


    

    


    
      	
               
      

            	
              3.3

            	
              Subject
      to the terms and conditions hereof and as may be agreed upon in writing
      from time to time, DL will render to Company’s affiliates Services as may
      from time to time be agreed upon by the
Parties.

            


    

    


    
      	
               
      

            	
              3.4

            	
              DL
      undertakes, and Company agrees, that in performing the
      Services:

            


    

    


    
      	
               
      

            	
              3.4.1

            	
              DL
      will act faithfully to and for the benefit of Company. DL will be the sole
      responsible that the Staff will act
likewise.

            


    

    


    
      	
               
      

            	
              3.4.2

            	
              DL
      will comply and act in accordance with, and will cause the Staff to comply
      and act in accordance with, all the resolutions of Company’s Board of
      Directors and committees thereof adopted from time to time, resolutions of
      the general meeting of the Company and in accordance with Company's
      statutory documents and/or any applicable
law.

            


    

    


    
      	
               
      

            	
              3.4.3

            	
              DL
      will have no obligation under this Agreement to provide to Company any
      financing, which may be required for any of Company’s operations and
      activities.

            


    

    


    
      	
               
      

            	
              3.4.4

            	
              Throughout
      the duration of this Agreement DL shall deem to be the sole employer of DL
      Indemnified Persons which may be considered as it employees. DL
      undertakes, solely and exclusively, to comply with all of its employment
      obligations in respect of such DL Indemnified Persons under any law or
      agreement, including but not limited to wages, national insurance, pension
      funds, annual vacation, sick pay, recuperation, travel expenses, and
      severance pay.

            


    

    


    
      	
              4.

            	
              Access and
      Information.

            


    

    


    
      	
               
      

            	
              4.1

            	
              Company
      shall provide DL with reasonable access to all information DL reasonably
      deems necessary to provide its Services hereunder, including without
      limitation, will make available to DL all the files, documents and records
      of Company, in whatever form (including in any electronic or digital
      form).

            


    

    


    
      	
               
      

            	
              4.2

            	
              Company
      shall make available to DL reasonable office facilities (including office
      space, furniture, equipment and supply, information systems, communication
      systems, book-keeping and accounting software and control systems), which
      are and may be from time to time at Company's disposal. DL may use the
      same solely for the purpose of performing the
  Services.

            


    

    


    
      	
               
      

            	
              4.3

            	
              Subject
      to applicable law, each Party hereto covenants and agrees to provide the
      other Party with, and where required under applicable law to the
      disclosure to third parties of, all information regarding itself and
      transactions under this Agreement (including the Agreement itself) that
      the other Party reasonably believes are required to comply with all
      applicable federal, state, county and local laws, ordinances, regulations
      and codes, including, but not limited to, securities laws and
      regulations.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      	
              5.

            	
              Consideration.

            


    

    


    
      	
               
      

            	
              5.1

            	
              In
      consideration for the Services, Company will pay to DL a monthly fee in
      the amount of NIS 50,000 (Fifty thousand New Israeli Shekels) per month
      (the “Fee”) and a
      pro rata portion thereof for part of a month. The Fee will be paid to DL
      by no later than at the end of each month for the same
    month.

            


    

    


    
      	
               
      

            	
              5.2

            	
              Value
      added tax and any similar service tax due under applicable law in respect
      of any payment to be made by Company to DL pursuant to this Agreement will
      be paid by Company to DL in addition to and together with the payment of
      the Fees against a tax invoice to be issued by
  DL.

            


    

    


    
      	
               
      

            	
              5.3

            	
              In
      addition to the Fee payable to DL pursuant to Section 5.1 hereof and
      without derogating from the provisions of Section 5.2 above, Company
      shall, reimburse DL for, its reasonable Out-of-Pocket Expenses, in a
      yearly amount which shall not exceed US$12,000. For the purposes of this
      Agreement, the term "Out-of-Pocket Expenses" shall mean the amounts
      actually paid by DL in connection with its performance of the Services,
      including, without limitation, reasonable (i) fees and disbursements of
      any independent auditors, outside legal counsel, consultants, investment
      bankers, financial advisors and other independent professionals and
      organizations, (ii) costs of any outside services or independent
      contractors such as financial printers, couriers, business publications or
      similar services and (iii) transportation, car expenses, per diem,
      telephone calls, cellular phone expenses, and/or any similar expense not
      associated with its ordinary operations. All reimbursements for
      Out-of-Pocket Expenses shall be made promptly upon or as soon as
      practicable after presentation by DL to Company of the statement in
      connection therewith.

            


    

    


    
      	
               
      

            	
              5.4

            	
              Company
      shall withhold all taxes and compulsory payments on Fees or any other
      payments to the extent that such taxes and compulsory payments are
      required by any applicable law to be withheld at source, unless DL has
      provided Company with tax exemption
certificate.

            


    

    


    
      	
               
      

            	
              5.5

            	
              DL
      shall be responsible for all payments applicable to DL required to be made
      to the Israeli National Insurance Institute (or such other similar
      authority under any applicable law), any taxation body or other third
      party in consequence of the provision of the Services hereunder or the
      Fees provided in connection
therewith.

            


    

    


    
      
        	
              	
                5.6

              	
                DL or any of DL
      Indemnified Parties shall not be entitled to any further compensation or
      payment in connection with the Services except as otherwise stated in this
      Agreement.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                6.

              	
                Liability

              


      

    

     

    
      	
               
      

            	
              6.1

            	
              Company
      agrees that neither DL nor its directors, officers, agents, employees
      and/or consultants, including any Staff members (each, a "DL Indemnified Person")
      shall have any liability, whether direct or indirect, in contract or tort
      or otherwise, to Company and/or its subsidiaries for or in connection with
      the Services rendered or to be rendered by any DL Indemnified Person
      pursuant to this Agreement. The foregoing limitation of liability shall
      not apply, in any way whatsoever, to damages, which have resulted from:
      (i) a gross negligent act or omission by DL and/or any DL Indemnified
      Person; (ii) willful misconduct by DL and/or any DL Indemnified Person; or
      (iii) a breach of any of the confidentiality undertakings set out under
      Section 10.

            


    

    


    
      	
               
      

            	
              6.2

            	
              Notwithstanding
      the provisions of Section 6.1, DL shall not be liable for any special,
      indirect, incidental, or consequential damages of any kind whatsoever
      (including, without limitation, damages for loss of goodwill, work
      stoppage,  lost or corrupted data, lost profits, lost business,
      lost opportunity or attorneys' fees) in any way due to, resulting from or
      arising in connection with any of the Services or the performance of or
      failure to perform DL's obligations under this Agreement. This disclaimer
      applies without limitation (i) to claims arising from the provision of the
      Services or any failure or delay in connection therewith; (ii) to claims
      for lost profits; (iii) regardless of the form of action, whether in
      contract, tort (including negligence), strict liability, or otherwise; and
      (iv) regardless of whether such damages are foreseeable or whether DL has
      been advised of the possibility of such damages. For the avoidance of
      doubt the above limitation of liability shall not apply with respect to
      the exclusions set in section 6.1
above.

            


    

    


    
      	
               
      

            	
              6.3

            	
              DL
      shall have no liability to Company or its subsidiaries for failure to
      perform DL's obligations under this Agreement or otherwise, provided
      however that any such failure is not caused due to any of exclusions set
      in section 6.1 above.

            


    

    


    
      	
               
      

            	
              6.4

            	
              Company
      agrees that it shall, in all circumstances, use commercially reasonable
      efforts to mitigate and otherwise minimize its damages, whether direct or
      indirect, due to, resulting from or arising in connection with any failure
      by DL to comply fully with its obligations under this
      Agreement.

            


    

    


    
      	
               
      

            	
              6.5

            	
              Notwithstanding
      the foregoing provisions of this Section 6, in the event of a substantial
      and continuing failure on the part of DL to provide or procure any
      Services, where such failure is reasonably expected to have a material
      adverse effect on Company, Company shall be entitled to seek specific
      performance to cause DL to provide or procure such
    Services.

            


    

    


    
      	
              7.

            	
              Indemnification
      of Company by DL. DL shall indemnify and hold Company harmless from
      and against any and all damages and/or losses and shall reimburse Company
      for all reasonable expenses (including reasonable attorneys' fees)
      actually incurred as a result of: (i) a gross negligent act or omission by
      DL and/or any DL Indemnified Person; (ii) a willful misconduct by DL
      and/or any DL Indemnified Person; and/or (iii) a breach of any of the
      confidentiality undertakings set out under Section 10
    below.

            


    

    


    
      	
              8.

            	
              Term.

            


    

    


    
      	
               
      

            	
              8.1

            	
              This
      Agreement is conditional upon approval thereof by the corporate bodies of
      Company and DL respectively, as required by any applicable law, within 30
      days following the date hereof. Company shall use its best efforts to hold
      within 14 days following the date hereof a General Meeting of its
      shareholders that will be requested to approve this Agreement as required
      by applicable law.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      	
               
      

            	
              8.2

            	
              This
      Agreement shall enter into force and effect on the third business day
      after all such approvals will have been obtained (the “Effective Date”), and
      shall remain in effect for two years thereafter (the "Initial Period"), unless
      otherwise terminated in accordance with the terms and conditions set out
      in this Agreement.

            


    

    


    
      	
               
      

            	
              8.3

            	
              Following
      the Initial Period, this Agreement shall automatically renew for
      successive one (1) year terms unless: (i) terminated by Company by
      giving14 days prior written notice of termination in the event DL's
      holding in Lapis shall be less than fifty one (51) per cent of the issued
      and outstanding share capital of Lapis on a fully diluted basis; or (ii)
      terminated by either Party by giving a written notice of termination to
      the other Party at least ninety (90) days prior to any automatic renewal
      date without incurring any liability
thereby.

            


    

    


    
      	
               
      

            	
              8.4

            	
              Either
      Party may terminate this Agreement with immediate effect, and without
      thereby incurring any liability for damages or other compensation, by
      notice in writing to the other Party if the other Party fails to observe
      or perform any of its obligations under this Agreement and fails to
      correct such failure within thirty (30) days after notice
      thereof.

            


    

    


    
      	
              9.

            	
              DL
      shall provide the Services as an independent contractor, and nothing in
      this Agreement shall create any employer-employee relationship between
      Company and DL and/or any DL Indemnified Person. Should any court, or
      other competent authority, deem Company, Lapis or any affiliate thereof
      the employer of any DL Indemnified Person, and consequently impose any
      liability (monetary or otherwise) upon Company, Lapis and/or on any
      affiliate thereof, DL will promptly indemnify Company and hold Company,
      Lapis and/or on any affiliate thereof harmless with respect to any such
      liability (including any reasonable legal costs incurred in connection
      therewith).

            


    

    


    
      	
              10.

            	
              DL
      shall and procure that any DL Indemnified Person shall keep in strict
      confidence and will not use (other than for the purpose of performing of
      DL's obligations under this Agreement and for the benefit of the Company)
      all information regarding Company, its investments, its business
      (including in respect of its clients and suppliers) and its affiliates,
      that will come to DL’s and/or any DL Indemnified Person's knowledge as a
      result of performing the Services. Except as otherwise required by
      applicable law or any competent authority, DL and/or DL Indemnified
      Persons will not disclose any such information to any third party without
      the prior approval of the Company. For the avoidance of doubt, this
      obligation of confidentiality shall remain in effect and survive the
      termination of this Agreement for any reason. DL shall be the sole liable
      in respect of any loss, damages, claims and costs and expenses incurred to
      Company and/or any of its affiliates as a result of a breach by DL or any
      DL Indemnified Person of the provisions set out in this Section
      10.

            


    

    


    
      	
              11.

            	
              Jurisdiction
      and Governing law. This Agreement shall be governed by and
      construed in accordance with the laws of the State of Israel without
      giving effect to its choice of law rules.  Any action or
      proceeding arising out of or relating hereto shall be brought in the State
      of Israel. The Parties hereby agree to the exclusive jurisdiction of the
      courts of Tel-Aviv, Israel.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    


    
      	
              12.

            	
              Severability.
      If any provision of this Agreement shall be found invalid or
      unenforceable, such invalidity or unenforceability shall not render the
      entire Agreement invalid. Rather, the Agreement shall be construed as if
      not containing the particular invalid or unenforceable provision, and the
      rights and obligations of each party shall be construed and enforced
      accordingly.

            


    

    


    
      	
              13.

            	
              DL
      may assign or transfer this Agreement in whole or in part, and may
      delegate or subcontract any of its duties and/or obligations hereunder, to
      any person, partnership, corporation, organization or entity ("Entity") that, directly
      or indirectly, Controls or is, directly or indirectly, Controlled by or is
      under common Control with it, without the consent of the Company, by
      giving the Company a written
notice.

            


    

    


    "Control" for the purpose of
this Section shall mean any Entity which, directly or indirectly, (i) owns or
controls at least fifty per cent (50%) of the voting stock or other
substantial ownership interest of such Entity, or (ii) possesses sufficient
authority to direct the adoption and/or execution of the policies, management or
operations of such Entity by any means whatsoever.

    


    
      	
              14.

            	
              Amendments;
      No
      Waivers. Any provision of this Agreement may be amended or waived
      if, and only if, such amendment or waiver is in writing and signed, in the
      case of an amendment, by DL and Company, or in the case of a waiver, by
      the Party against whom the waiver is to be effective. No failure or delay
      by any Party in exercising any right, power or privilege hereunder shall
      operate as a waiver thereof nor shall any single or partial exercise
      thereof preclude any other or further exercise thereof or the exercise of
      any other right, power or privilege. The rights and remedies herein
      provided shall be cumulative and not exclusive of any rights or remedies
      provided by law.

            


    

    


    
      	
              15.

            	
              Entire
      Agreement. This Agreement constitutes the entire understanding of
      the Parties with respect to the subject matter hereof and supersede all
      prior agreements, understandings and negotiations, both written and oral,
      between the parties with respect to the subject matter
    hereof.

            


    

    


    
      	
              16.

            	
              Notices
      and Addresses

            


    

    


    
      	
               
      

            	
              16.1

            	
              The
      addresses of the Parties to this Agreement for the purpose of notices are
      as detailed in the preamble to this Agreement. The Parties are obligated
      to inform the other of any change in their address within 7 working days
      from the date of change.

            


    

    


    
      	
               
      

            	
              16.2

            	
              Any
      notice given pursuant to this Agreement shall be in writing and shall be
      given (and shall be deemed to have been duly given) on the date of
      delivery if by delivery in person, by cable, telecopy, facsimile, telegram
      or e-mail or three Business Days following delivery by registered or
      certified mail (postage prepaid, return receipt
  requested).

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


             IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by two of their respective authorized officers as of the date first
above written.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                D.L
      Capital Ltd.

                                              	 	
                                                Enertec
      Systems 2001 Ltd.

                                              
	
                                                 

                                              	 	 	
                                                 

                                              
	 	 	 	 
	
                                                By:

                                              	 
      	 	
                                                By:

                                              	
                                                 

                                              
	
                                                Title:

                                              	 	 	
                                                Title: