----

----

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| ASSET PURCHASE AGREEMENT  | 1                                         |
|--------------------------------|-------------------------------------------|
| 1.  Definitions           | 1                                         |
| 1.1                            | “Acquired Assets”             | 1 |
| 1.2                            |  “Adjustment Amount”     | 4 |
| 1.3                            | “Ancillary Agreements”        | 4 |
| 1.4                            | “Assumed Agreements Schedule” | 4 |
| 1.5                            | “Assumed Agreements”          | 5 |
| 1.6                            | “Assumed Employees”           | 5 |
| 1.7                            | “Assumed Liabilities”         | 5 |
| 1.8                            | “Attorney-in-Fact”            | 5 |
| 1.9                            | “Benefit Plan”                | 5 |
| 1.10                           | “Business Day”                | 6 |
| 1.11                           | “Business”                    | 6 |
| 1.12                           | “Claim”                       | 6 |
| 1.13                           | “Closing Date”                | 6 |
| 1.14                           | “Closing”                     | 6 |
| 1.15                           | “Compensation Agreements”     | 6 |
| 1.16                           | “Consideration”               | 6 |
| 1.17                           | "Consortiums"                             | 7 |
| 1.18                           | “Credit Event”                | 7 |
| 1.19                           | “Current Products”            | 7 |
| 1.20                           | “Disclosure Schedule”         | 7 |
| 1.21                           | “Earn-Out”                    | 7 |
| 1.22                           | “Employee”                    | 7 |
| 1.23                           | “Employment Agreement”        | 7 |
| 1.24                           | “Excluded Liabilities”        | 7 |
| 1.25                           | “Governmental Body”           | 8 |
| 1.26                           | “Grant”                       | 8 |
| 1.27                           | “Grants Schedule”             | 8 |
| 1.28                           | “Indemnified Person”          | 8 |
| 1.29                           | “Indemnity Escrow Agent”      | 8 |

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| 1.30                                   | “Indemnity Escrow Deposit Agreement”    | 8  |
|----------------------------------------|-----------------------------------------------------|----|
| 1.31                                   | “Indemnify Escrow Deposit”              | 8  |
| 1.32                                   | “Intellectual Property Rights Schedule” | 8  |
| 1.33                                   | “Intellectual Property Rights”          | 8  |
| 1.34                                   | “Interim Financial Statements”          | 9  |
| 1.35                                   | “Law”                                   | 9  |
| 1.36                                   | “Liability”                             | 9  |
| 1.37                                   | “Lien”                                  | 9  |
| 1.38                                   | “Location Leases”                       | 9  |
| 1.39                                   | “Location”                              | 9  |
| 1.40                                   | “Loss” or “Losses”          | 10 |
| 1.41                                   | “Mandatory Severance Accounts”          | 10 |
| 1.42                                   | “Mandatory Severance Accruals”          | 10 |
| 1.43                                   | “Material Adverse Change”               | 10 |
| 1.44                                   | “Material Adverse Effect”               | 10 |
| 1.45                                   | “Ordinary Course of Business”           | 10 |
| 1.46                                   | “Organizational Documents”              | 10 |
| 1.47                                   | “Permit”                                | 11 |
| 1.48                                   | “Permits Schedule”                      | 11 |
| 1.49                                   | “Required Authorization Schedule”       | 11 |
| 1.50                                   | “Tangible Assets Schedule”              | 11 |
| 1.51                                   | “Tax Returns”                           | 11 |
| 1.52                                   | “Taxes”                                 | 11 |
| 1.53                                   | "Vitec Multimedia"                                  | 11 |
| 1.54                                   | “Waiver”                                | 11 |
| 1.55                                   | “Year-End Financial Statements”         | 12 |
|  2.   Basic Transaction |  12                                            |
| 2.1                                    | Purchase and Sale                                   | 12 |
| 2.2                                    | Closing Purchase Price                              | 12 |
| 2.3                                    | Signing Deposit                                     | 12 |

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| 2.4                                                           | Adjustments for Receivables and Payables           | 13 |
|---------------------------------------------------------------|----------------------------------------------------|----|
| 2.5                                                           | Earn-Out                                           | 14 |
| 2.6                                                           | Assumption of Certain Liabilities                  | 16 |
| 2.7                                                           | Non-Assignable Contracts; Consortium Agreements    | 16 |
| 2.8                                                           | Closing; Deliveries                                | 16 |
| 2.9                                                           | Allocation of Closing Purchase Price               | 17 |
|  3.   Representations and Warranties of Seller |  18                                           |
| 3.1                                                           | Due Incorporation and Qualification of Seller      | 18 |
| 3.2                                                           | Authority; Due Authorization; Valid Obligation.    | 18 |
| 3.3                                                           | No Conflicts or Defaults                           | 19 |
| 3.4                                                           | Government Body Authorizations                     | 19 |
| 3.5                                                           | Title to Assets                                    | 20 |
| 3.6                                                           | Litigation                                         | 20 |
| 3.7                                                           | Financial Statements; Liabilities                  | 20 |
| 3.8                                                           | Inventory                                          | 21 |
| 3.9                                                           | Intellectual Property Rights                       | 23 |
| 3.10                                                          | Employment Matters                                 | 23 |
|  With regard to the Employees:                           |  24                                           |
| 3.11                                                          | Agreements                                         | 24 |
| 3.12                                                          | Warranties                                         | 25 |
| 3.13                                                          | Permits; Compliance with Law                       | 25 |
| 3.14                                                          | Insurance                                          | 25 |
| 3.15                                                          | Suppliers, Customers and End of Life of Components | 25 |
| 3.16                                                          | Grants, Incentives and Subsidies                   | 26 |
| 3.17                                                          | Brokers                                            | 26 |
| 3.18                                                          | Power of Attorney                                  | 26 |
| 3.19                                                          | Israeli Restrictive Trade Practices Law            | 26 |
| 3.20                                                          | Disclosure                                         | 27 |

----

| 4.   Representations and Warranties of Purchaser | 22                                                             |
|------------------------------------------------------------|----------------------------------------------------------------|
| 4.1                                                        | Due Incorporation of Purchaser                                 | 22 |
| 4.2                                                        | Knowledge, Sophistication and Experience; Financial Capability | 22 |
| 4.3                                                        | Due Diligence                                                  | 22 |
| 4.4                                                        | Business Ability                                               | 28 |
| 4.5                                                        | Authority; Due Authorization; Valid Obligation                 | 28 |
| 4.6                                                        | Restrictive Trade Practices Law                                | 28 |
| 4.7                                                        | No Conflicts or Defaults                                       | 28 |
| 4.8                                                        | Authorization                                                  | 29 |
| 4.9                                                        | Litigation                                                     | 29 |
| 4.10                                                       | Brokers                                                        | 29 |
| 4.11                                                       | Disclosure                                                     | 29 |
|  5.   Pre-Closing Covenants                 |  29                                                       |
| 5.1                                                        | Conduct of the Businesses Prior to Closing                     | 28 |
| 5.2                                                        | Further Information                                            | 29 |
| 5.3                                                        | Notice of Certain Events                                       | 29 |
| 5.4                                                        | Consents, Waivers and Filings                                  | 29 |
| 5.5                                                        | Employees                                                      | 30 |
| 5.6                                                        | Risk of Loss                                                   | 31 |
|  6.   Closing Conditions                    |  32                                                       |
| 6.1                                                        | Conditions to the Obligations of Purchaser                     | 32 |
| 6.2                                                        | Conditions to the Obligations of Seller                        | 32 |
|  7.   Confidentiality; Non-Competition      |  34                                                       |
| 7.1                                                        | Confidentiality                                                | 34 |
| 7.2                                                        | Non-Competition                                                | 34 |
| 7.3                                                        | Equitable Relief                                               | 35 |
|  8.   Post-Closing Covenants                |  35                                                       |
| 8.1                                                        | Further Assurances                                             | 35 |
| 8.2                                                        | Collection                                                     | 36 |

----

| 8.3                                            | Information                                                | 36 |
|------------------------------------------------|------------------------------------------------------------|----|
| 8.4                                            | Access to Records                                          | 36 |
| 8.5                                            | Assistance                                                 | 37 |
| 8.6                                            | Limited Power of Attorney                                  | 37 |
| 8.7                                            | Line of Business of Purchaser. Performance of Obligations. | 37 |
|  9.   Indemnification; Survival |  37                                                   |
| 9.1                                            | Survival                                                   | 36 |
| 9.2                                            | Indemnification                                            | 37 |
| 9.3                                            | Matters Involving Third Parties                            | 37 |
| 9.4                                            | Maximum Indemnification                                    | 37 |
| 9.5                                            | Exclusive Remedy                                           | 38 |
| 9.6                                            | Determination of Indemnity                                 | 39 |
|  10.  Termination                    |  40                                                   |
| 10.1                                           | Termination of Agreement                                   | 40 |
| 10.2                                           | Effect of Termination                                      | 41 |
|  11.   Dispute Resolution       |  41                                                   |
| 11.1                                           | Governing Law                                              | 41 |
| 11.2                                           | Submission to Jurisdiction                                 | 42 |
| 11.3                                           | Arbitration                                                | 42 |
|  12.   Miscellaneous            |  43                                                   |
| 12.1                                           | Press Releases and Public Announcements                    | 43 |
| 12.2                                           | Relationship of the Parties                                | 43 |
| 12.3                                           | No Benefit to Others                                       | 43 |
| 12.4                                           | Integration of Terms                                       | 43 |
| 12.5                                           | Succession and Assignment                                  | 43 |
| 12.6                                           | Counterparts                                               | 44 |
| 12.7                                           | Construction                                               | 44 |
| 12.8                                           | Amendments and Waivers                                     | 44 |
| 12.9                                           | Transfer Taxes                                             | 44 |
| 12.10                                          | Expenses                                                   | 45 |
| 12.11                                          | Specific Performance                                       | 45 |

----

| 12.12                               Severability and Blue Penciling | 45     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 12.13                              Notices                          | 46     |
| Exhibit A – Bill of Sale                                                                                                                                                                                                 |   |
| Exhibit B –  Notice of General Assignment                                                                                                                                                                           |   |
| Form of Affidavit                                                                                                                                                                                                              |   |
| Exhibit C -  Trademark Assignment Agreement                                                                                                                                                                               |   |
| Annex A – Trademark List                                                                                                                                                                                                 |   |
| Exhibit D -  Patent Assignment                                                                                                                                                                                            |   |
| Annex A – Patents List                                                                                                                                                                                                   |   |
| Exhibit F – Agreement to Use of Names                                                                                                                                                                                    |   |
| Exhibit G – Signing Deposit Escrow Agreement                                                                                                                                                                             |   |
| Exhibit N – Indemnity Escrow Agreement                                                                                                                                                                                   |   |
| Exhibit I –  Other Transfer Documents                                                                                                                                                                               |   |
| Exhibit J –  Assumed Agreements                                                                                                                                                                                     |   |
| Exhibit K – Assumed Liabilities                                                                                                                                                                                          |   |
| Exhibit M - Employment Agreement                                                                                                                                                                                               |   |
| Exhibit O – Waiver                                                                                                                                                                                                       |   |
| Exhibit P –  Certificate of CEO of Seller                                                                                                                                                                           |   |
| Certificate of CEO of Purchase                                                                                                                                                                                                 |   |
| Exhibit Q – Seller’s Extract Board of Directors Resolution                                                                                                                                                         |   |
| 1.   Authorization to Execute Documents                                                                                                                                                                              |   |
| 2.   Signatory Rights                                                                                                                                                                                                |   |
| Exhibit R - Legal Opinion of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.                                                                                                                                           |   |
| 1.   Authorization to Execute Documents                                                                                                                                                                              |   |
| 2.   Signatory Rights                                                                                                                                                                                                |   |
| Exhibit U -  Legal Opinion of Afik Turgeman.                                                                                                                                                                              |   |
| Exhibit V – Allocation Schedule                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                           |   |

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| WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to acquire from Seller, substantially all of Seller’s assets related to its video business; |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOW, THEREFORE, in consideration of the premises, representations, warranties, and covenants herein contained, the Parties hereby agree as follows: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|

nitio

| 1.1           “Acquired Assets”   | shall mean all of Seller's rights, title and interest in and to all of Seller’s assets related to the Business, wherever held, excluding the Excluded Assets, but including all: |
|----------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.1 | inventories of raw materials, supplies, parts, work-in-progress and goods owned by Seller including those which are located at the Locations or in the process of being shipped to the Locations, or otherwise delivered or in the process of being delivered to Seller, or on consignment with third parties, including those described on the list attached hereto as Schedule A; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.2 | any furniture, tools or equipment owned by Seller and which are used in the Business (other than those used by the Seller’s management which is not transferred to Purchaser), or otherwise delivered or in the process of being delivered to Seller, including any license rights to any non-proprietary computer software installed in any such equipment, and further including the assets described as owned by Seller on the Tangible Assets Schedule described on the list attached hereto as Schedule B; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.3 | to the full extent transferable under law, rights of Seller under the Assumed Agreements, including the agreements described in the Assumed Agreements Schedule and including all open purchase and sale orders, warranties, contracts, agreements, understandings, equipment leases and related maintenance agreements and licenses (whether of Intellectual Property Rights or otherwise); |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 1.1.4 | prepaid expenses and similar assets, including those listed or described in the schedule attached hereto as Schedule C; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.5 | any receivables; |
|--------|-------|------------------|

|   | 1.1.6 | Intellectual Property Rights related to the Business, including those described in the Intellectual Rights Schedule, and any rights or licenses held thereby with respect to such Intellectual Property Rights owned by others and including: (i) all licenses and sublicenses granted and obtained with respect to Intellectual Property Rights, and rights thereunder; (ii) all Seller’s all source code of all software developed or licensed by Seller, all electrical scheme, BOMs, manufacturing files, design documents of any kind (software, hardware); (iii) all of Seller's databases related to the Business (technical, commercial and Business specific, accounting and (iv) all rights to protection of interests therein; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.7 | the goodwill of Seller in the Business and the right to use the term “Optibase” and any derivative or variant thereof; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.8 | all Claims or rights (and benefits arising therefrom) relating to the Acquired Assets arising on or after the Closing only, to the full extent legally transferable, including rights under insurance policies applicable to Seller for Claims arising on or after the Closing Date, provided that such Claims specifically relate to the assets listed in this definition of the Acquired Assets; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.9 | originals or true and complete copies of all books and records relating to the Acquired Assets, including, customer and supplier lists, credit files, project files, quotations and bids, plans, specifications and sales literature; and |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.1.10 | Permits and all pending applications therefor or renewals thereof, including the Permits described in the Permit Schedule, all relating to the Business only. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | all as the same exist on the Closing Date. |
|--------|--------------------------------------------|

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|   | 1.3.1 | A Bill of Sale substantially in the form attached hereto as Exhibit A; |
|--------|-------|------------------------------------------------------------------------|

|   | 1.3.2 | Notice of general assignment substantially in the form attached hereto as Exhibit B; |
|--------|-------|--------------------------------------------------------------------------------------|

|   | 1.3.3 | A Trademark Assignment substantially in the form attached hereto as Exhibit C; |
|--------|-------|--------------------------------------------------------------------------------|

|   | 1.3.4 | A Patent Assignment substantially in the form attached hereto as Exhibit D; |
|--------|-------|-----------------------------------------------------------------------------|

|   | 1.3.5 | undertakings of Purchaser to (i) the Investment Center of the Israeli Ministry of Industry and Trade; (ii) the Office of the Chief Scientist (regarding the transfer of privileges and obligations relating to the applicable Grant programs), Israeli Ministry of Industry and Trade; and (iii) the Consortiums supported by the European Commission (regarding the transfer of privileges and obligations relating to the applicable Consortium agreements); all in the forms attached hereto as Exhibit E, pursuant to which Purchaser shall undertake to assume the relevant Grant related royalty and other obligations to such Government Bodies with respect to the Business; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1.3.6 | Agreement to use of name substantially in the form attached hereto as Exhibit F; |
|--------|-------|----------------------------------------------------------------------------------|

|   | 1.3.7 | An Escrow Deposit Agreement (Exhibit G); and |
|--------|-------|----------------------------------------------|

|   | 1.3.8 | The Signing Deposit Escrow Agreement and confirmation , in the form attached hereto as Exhibit H; and |
|--------|-------|-------------------------------------------------------------------------------------------------------|

|   | 1.3.9 | Such other documents required to effect or perfect the transfer of the Acquired Assets (including pursuant to Israeli law), certain of which are substantially in the form attached hereto as Exhibit I. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.5              “Assumed                               Agreements” | shall mean those agreements, contracts or commitments to which Seller is a party, and which are in full force and effect as of the Closing Date relating to the: (i) Intellectual Property Rights (ii) any lease or conditional sales agreement pursuant to which Seller has licensed or acquired equipment or other personal property; (iii) any sales, lease or service contract or customer purchase order outstanding; (iv) any currently effective supply contract or open purchase order providing for the acquisition of materials, supplies, inventory, equipment or services by Seller; (v) any research and development, distribution, dealership, franchise, OEM, advertising, agency, manufacturer’s or sales representative or similar agreement; and (vi) any outstanding offer, agreement in principle or active ongoing negotiation, the acceptance or consummation of which would result in any of the foregoing; |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.7              “Assumed                               Liabilities”  | shall mean all of the liabilities related to the Business and to the Acquired Assets, including, but not limited to, the following liabilities of Seller, as and when due: (i) Seller’s obligations and liabilities under the Assumed Agreements; (ii) obligations and liabilities pursuant to any replacement or warranty claims against Seller arising after the Closing Date with regard to Current Products sold by Seller prior to the Closing Date; (iii) liabilities to provide maintenance services and technical support with regard to the Current Products  sold or delivered by Seller prior to the Closing Date; (iv) all of the liabilities of Seller related to the Grants; (v) all payables; and (vi) the obligations and liabilities specified in the schedule as attached hereto as Exhibit K; |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|            1.12              “Claim”  | shall mean any claim, action, suit, proceeding, investigation or criminal proceeding, at law or in equity, before any national, state or provincial, local or other Governmental Body or other forum; |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.15             “Compensation                                Agreements” | shall mean (i) each and every oral or written compensation contract, commitment or understanding between Seller, on the one hand, and any Employee of Seller, on the other, which is not terminable with 30 days or less notice by Seller without cost or other liability to Seller, in any case other than verbal “at-will” employment agreements with any Employee whose gross cost to employer is less than $20,000 per year, and (ii) each and every oral or written consulting agreement, deferred compensation agreement, severance agreement or sales representative or other agency agreement or any covenant not to compete or confidentiality agreement, to which Optibase Ltd. or Optibase Inc. is a party; |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.22             “Employee" | shall mean employees or independent consultants under contract of Seller on the date of this Agreement (all reference herein to Employees shall refer to consultants mutatis mutandis), all listed in the  schedule attached hereto as Exhibit L; |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.23            “Employment                               Agreement" | shall mean an Employment Agreement substantially in the form attached hereto as Exhibit M with Exhibit A thereto in form and substance satisfactory to Purchaser in its sole discretion; It is agreed that such Employment Agreement shall be the existing employment agreement relevant to the employees of Seller prior to the date of this agreement, unless agreed otherwise in writing between the Parties. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.29             “Indemnity Escrow                                Agent”  | shall mean the escrow agent under the Escrow Deposit Agreement; |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|

|            1.30            “Indemnity                                Escrow  Deposit                               Agreement”              | shall mean the agreement providing for the formation of the Escrow Deposit, pursuant to Exhibit N hereto; |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|

|            1.33            “Intellectual Property                              Rights | shall mean with regard to the Business only: (i) all copyrightable works, all copyrights, and all applications, registrations and renewals thereof, (ii) all trade names, fictional business names, trade dress rights, registered and unregistered trademarks and service marks and logos and corporate names, including any internet domain names, and applications therefor, together with all translations, adaptations, derivations and combinations and like intellectual property rightsand all applications, registrations and renewals thereof, (iii) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, divisions, continuations, continuations-in-part, substitutes, extensions, and reexaminations thereof, (iv) all proprietary formulations, know-how, confidential business information, trade secrets, research and development results, compositions, techniques, processes, information technology, technical data, designs, drawings, diagrams, specifications, catalogs, customer and supplier lists and contact information, pricing and cost information, business and marketing plans and proposals, and manufacturing, engineering, quality control, testing, operations, logistical, maintenance and other technical information and technology, (v) all mask works and all applications, registrations and renewals in connection therewith, (vi) all computer software (including data and related documentation), whether purchased, licensed or internally developed, and (vii) all copies and tangible embodiments thereof in whatever form or medium; |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.35            “Law”  | shall mean any applicable law, statute, rule, regulation, ordinance and other pronouncement having the effect of law of the State of Israel or any foreign country; |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.40             “Loss” or “Losses" | shall mean any direct liability, Claim, loss, damage, costs or expenses (including reasonable attorneys’ fees and disbursements and the costs of litigation); |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.41             “Mandatory                                  Severance Accounts | shall mean all amounts paid, withheld or held by Seller to satisfy the Mandatory Severance Accruals whether under Seller’s control or otherwise ; |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.43             “Material                                 Adverse Change”  | shall have the meaning ascribed to it in §‎3.7.3 below;  For this purpose, the Parties agree that any effect or effects of more than $100,000 in the aggregate shall be deemed material; |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.44            “Material                               Adverse Effect”  | shall mean, with regard to the Business, any circumstance, change or effect that, either individually or in the aggregate with all other circumstances, changes or effects, (a) has a material adverse effect on the Business, Acquired Assets, financial condition or results of operations of Seller with respect to the Business or the conduct of the Business taken as a whole, but excluding (i) effects or changes that are generally applicable to the industries and markets in which the Business operates, (ii) changes in the world financial markets or general economic conditions, or (iii) effects directly or primarily arising out of the execution or delivery of this Agreement or the transactions contemplated hereby or the public announcement thereof; or (b) would have a material adverse effect on the ability of Seller to perform its obligations under this Agreement and the Ancillary Agreements or on the ability of Seller to consummate the transactions contemplated hereby. For this purpose, the Parties agree that any effect or effects of more than $100,000 in the aggregate shall be deemed material; |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|            1.47             “Permit” | shall mean any consent, license, certificates, registration, approvals, authorization or permit issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Law; |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            1.51             “Tax Returns”      | shall mean all federal, state, foreign, provincial and local tax (including income tax, value added tax and stamp tax) returns, notices, reports and computations; |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2. | Basic Transaction |
|----|-------------------|

|   | 2.1 | Purchase and Sale Subject to the terms and conditions of this Agreement, on the Closing Date, Purchaser shall purchase from Seller, and Seller shall sell, convey, assign, transfer and deliver to Purchaser, for the consideration specified below, all of Seller’s rights, titles and interests in and to the Acquired Assets and the Assumed Liabilities. For clarification purposes the Parties acknowledge that the Excluded Assets shall not be sold, assigned or transferred to Purchaser. The Acquired Assets shall be made available to the Purchaser at the relevant Locations at the Closing and Purchaser, at its sole expense, shall remove all Acquired Assets from such Location. The risk of Loss in and to the all of the Acquired Assets shall transfer to the Purchaser at the Closing. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.2 | Closing Purchase Price |
|--------|-----|------------------------|

|   | 2.2.1 | As consideration for the purchase of the Acquired Assets and the assumption of the Assumed Liabilities, Purchaser shall transfer at Closing to the Seller, the Consideration plus any applicable VAT.  In connection with and in complete fulfillment of any obligation hereunder to pay the Consideration, Purchaser shall transfer portions of the Consideration as follows: |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  2.2.1.1 | to Seller, the sum of the Consideration plus the Adjustment Amount, minus the Indemnity Escrow Deposit. |
|--------|---------------|---------------------------------------------------------------------------------------------------------|

|   |  2.2.1.2 | to Indemnity Escrow Agent, the Indemnity Escrow Deposit. |
|--------|---------------|----------------------------------------------------------|

|   | 2.2.2 | Purchaser shall also transfer the complete fees of the Indemnity Escrow Agent to such escrow agents. |
|--------|-------|------------------------------------------------------------------------------------------------------|

|   | 2.3 | Signing Deposit |
|--------|-----|-----------------|

----

|   | 2.4 | Adjustments for Receivables and Payables |
|--------|-----|------------------------------------------|

|   | 2.4.1 | A = [Accounts Receivables, net of specific doubtful debt] - means all accounts receivable, notes receivable and other current rights to payment of Sellers, or any of its subsidiaries or other affiliates, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, and any claim, remedy or other right related to any of the foregoing, including specific claims under the company receivables credit insurance policy]; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.4.2 | B = [Other Receivables and Prepaid Expenses] - means all other accounts receivables, advance payments, payments made by Sellers on account of services or goods to be provided to Purchaser or received by Purchaser on or after the Closing, deposits, other current rights to payment of Sellers, or any of its subsidiaries or other affiliates, all together with any unpaid interest, fees or income accrued thereon or other amounts due with respect thereto, and any claim, remedy or other right related to any of the foregoing; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2.4.3 | C = [Accounts Payables (other than ordered but unpaid for inventory)] - means all accounts payable owed to third parties with respect to the Business for raw materials or supplies received by or services rendered to Sellers; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.4.4 | D = [Other Payables] - means all other accounts payable owed to third parties with respect to the Business for services rendered to Sellers; and advance payment received by the European Commission on account of agreements to be executed after the Closing. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.5 | Earn-Out |
|--------|-----|----------|

|   | 2.5.1 | The Consideration shall be adjusted 14 months after the Closing Date by making a calculation of the difference between the Current Product worldwide gross revenues of Purchaser (including any subsidiaries, affiliates, distributors or agents thereof) during the 12 months after the Closing Date and USD14 million and should such number be a positive number, Purchaser shall immediately pay Seller 45% of such difference. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.5.2 | For purposes of this §‎2.4, the calculation of revenues deriving from Current Products shall be as stated in the consolidated and audited financial statements (prepared in accordance with relevant generally accepted accounting principles (GAAP) and applicable Law) of Vitec Multimedia and shall include revenues from Current Products which have undergone any changes, amendments or modifications. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.5.3 | Reports: During the first 12 months after Closing, Purchaser shall deliver to Seller a report every 3 months (within 30 days of the end of the 3 months period) elaborating and detailing the accumulative sales subject to the payments under this Section ‎2.4 to such date and a final report relating to the entire 12 months period (in this §‎2.4, "Earn-Out Accounting") within 14 months of Closing.  The Earn-Out Accounting shall be accompanied by a letter of the accounting firm making the annual reports of Vitec Multimedia which confirms that such report is properly made and audited, with respect to the final report, pursuant to relevant generally accepted accounting principals (GAAP) and applicable law. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2.5.4 | Disputes.  Unless Seller disputes the Earn-Out Accounting pursuant to this §‎2.5.4, the Earn-Out Accounting delivered by Purchaser to Seller shall be final, binding and conclusive on the Parties.  Notwithstanding anything to the contrary herein, Seller may dispute the Earn-Out accounting only as follows in this §‎2.5.4.  Seller shall send written notice of the dispute (In this §‎2.5.4, “Earn-Out Dispute Notice”) to Purchaser within thirty days of receipt of the Earn-Out Accounting. The said thirty days period shall be extended by any period of time in which Purchaser failed to comply with its obligations in accordance with §‎8.4 after the 12 months anniversary of the Closing.  The Earn-Out Dispute Notice must identify each disputed item on the Earn-Out Accounting, specify the amount of such dispute and set forth, in reasonable detail, the basis for such dispute.  In the event of such a dispute, Purchaser and Seller shall attempt in good faith to reconcile their differences, and any resolution by them as to any disputed items shall be final, binding and conclusive on Purchaser and Seller. It is clarified that at such time, any undisputed Earn-Out amounts will be paid by Purchaser to Seller.  If any such resolution by Purchaser and Seller leaves in dispute amounts, the net effect of which in the aggregate would not affect the Earn-Out amount to be paid for more than USD40,000, then all such amounts shall be deemed to be resolved in favor of the Earn-Out Accounting delivered by Purchaser.  If Purchaser and the Seller are unable to reach a resolution with such effect within thirty days after delivery of the Earn-Out Dispute Notice to Purchaser, then the Seller and Purchaser shall promptly submit any remaining disputed items to any senior partner in one of the top four independent accounting firms of international reputation mutually acceptable to the Seller and Purchaser, and in lack of agreement, one of the firms chosen by the head of the Israeli Bar Association to which any Party may approach  (in this §‎2.5.4, “Earn-Out Independent Accountant”).  If any remaining disputed items are submitted to an Earn-Out Independent Accountant for resolution: (A) Each of the Seller and the Purchaser shall be entitled to furnish the Earn-Out Independent Accountant with its reasoning within 14 days of the first meeting with the Earn-Out Independent Accountant, which shall be held as soon as possible after its nomination, and either Party shall be entitled to then respond once to the reasoning of the other Party within 14 days of receipt of such reasoning.  The Earn-Out Independent Accountant shall be entitled to request additional information from either or both parties.  Any correspondence with the Earn-Out Independent Accountant shall be in writing with copy to attorneys Doron Afik and Adva Bitan.  The Earn-Out Independent Accountant shall make its decision within 14 days following the expiration of the response period set herein by notifying attorneys Doron Afik and Adva Bitan of his decision in writing and with reasoning, failing which, the Earn-Out Independent Accountant shall not be entitled to payment and the matter shall be referred to another arbitrator; (B) the determination by the Earn-Out Independent Accountant, as set forth in a written notice to the Seller and Purchaser, shall be final, binding and conclusive on the Parties; and (C) the fees and disbursements of the Earn-Out Independent Accountant shall be allocated between the Seller and Purchaser in the same proportion that the aggregate amount of the remaining disputed items submitted to the Earn-Out Independent Accountant that is unsuccessfully disputed by each Party (as finally determined by the Earn-Out Independent Accountant) bears to the total amount of all remaining disputed items submitted to the Earn-Out Independent Accountant. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2.6 | Assumption of Certain Liabilities |
|--------|-----|-----------------------------------|

|   | 2.6.1 | At Closing, Purchaser shall assume and agree to pay, perform and discharge all of the Assumed Liabilities.  Purchaser shall not assume or be required to pay, perform or discharge any of the Excluded Liabilities. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.6.2 | Seller shall be responsible for payment, performance and discharge of all Excluded Liabilities. |
|--------|-------|-------------------------------------------------------------------------------------------------|

|   | 2.7 | Non-Assignable Contracts; Consortium Agreements |
|--------|-----|-------------------------------------------------|

|   | 2.7.1 | Nothing herein shall be construed as requiring or permitting Seller to assign to Purchaser any Assumed Agreement that by its terms cannot be assigned (unless any required consent shall have been obtained).  If, notwithstanding the best efforts of the Parties pursuant to §‎5.3 below, any such consent to assignment shall not have been obtained, then, within a period of six (6) months following the Closing Date the Parties will use their respective best efforts to obtain such consent.  Within said time frame, until such consent shall have been obtained or such restriction shall have been removed, Seller shall, by itself or by its agents, as agreed upon by the Seller and Purchaser and at the expense of Purchaser take all actions (i) in order that the rights and obligations of Seller under any such contract shall be preserved, (ii) for, and to facilitate, the performance of Seller’s obligations under such contract; and (iii) to cause the other party or parties thereto to perform its or their obligations thereunder (which performance shall be for the benefit of Purchaser). If after such six (6) months period following the Closing, the Seller and Purchaser were not able to assign any such agreement that by its terms cannot be assigned, Seller will not be obligated to assign such agreement and shall have no further obligation under this Section ‎2.7.1. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.7.2 | Notwithstanding anything to the contrary in this Agreement, and subject to the provisions of Section 10.1.2.3, if any required consent to assign a Consortium shall not have been obtained as of the Closing Date, Seller, in its sole discretion may pay the Purchaser the amount of USD 100,000 (one hundred thousand US dollars) for such non-transferable Consortium and such Consortium shall not be assigned to Purchaser under this Agreement. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8 | Closing; Deliveries |
|--------|-----|---------------------|

----

|   | 2.8.1 | Seller will deliver to Purchaser at Closing: |
|--------|-------|----------------------------------------------|

|   | 2.8.1.1 | the Ancillary Agreements duly executed by Seller; |
|--------|---------|---------------------------------------------------|

|   | 2.8.1.2 | a certificate of the Chief Executive Officer of Optibase Ltd. substantially in the form attached hereto as Exhibit P; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | 2.8.1.3 | General Meeting resolutions and an Extract of the Board of Directors resolutions substantially in the form attached hereto as Exhibit Q to approve the execution and consummation of this Agreement by Seller; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8.1.4 | a legal opinion of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., counsel for Seller, substantially in the form attached hereto as Exhibit R, dated the Closing Date; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8.2 | Purchaser will deliver to Seller at Closing the following: |
|--------|-------|------------------------------------------------------------|

|   | 2.8.2.1 | the Ancillary Agreements, duly executed by Purchaser, where relevant; |
|--------|---------|-----------------------------------------------------------------------|

|   | 2.8.2.2 | Board of Directors resolution substantially in the form attached hereto as Exhibit S to approve the execution and consummation of this Agreement by Purchaser; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8.2.3 | An obligation of Vitec Multimedia to guarantee the full performance by Purchaser of this Agreement substantially in the form attached hereto as Exhibit T; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8.2.4 | a legal opinion of Afik Turgeman, counsel for Purchaser substantially in the form attached hereto as Exhibit U, dated the Closing Date; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.8.2.5 | the Consideration, as described in §‎2.2 above. |
|--------|---------|------------------------------------------------------------|

|   | 2.9 | Allocation of Closing Purchase Price |
|--------|-----|--------------------------------------|

----

| 3. | Representations and Warranties of Seller |
|----|------------------------------------------|

|   | 3.1 | Due Incorporation and Qualification of Seller |
|--------|-----|-----------------------------------------------|

|   | 3.1.1 | Optibase Ltd. is a corporation duly incorporated and validly existing under the laws of the State of Israel, with full power and authority to own, lease and operate its properties, to carry on the Business in the places and in the Ordinary Course of Business and to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1.2 | Seller is qualified to do business in each jurisdiction in which the nature of the activities conducted by it or the character of the properties owned or leased by it makes such qualification necessary except where the failure to so qualify would not have a Material Adverse Effect on the Seller. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1.3 | Neither Optibase Ltd. nor Optibase Inc. has undergone a Credit Event. |
|--------|-------|-----------------------------------------------------------------------|

|   | 3.1.4 | Optibase Ltd. is the sole shareholder of Optibase Inc.  Optibase Inc. has been duly organized and is validly existing and in good standing under the laws of the State of California, with full power and authority to own, lease and operate its properties and to carry on the Business in the places and in Ordinary Course of Business. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.1.5 | Seller has furnished to Purchaser correct and complete copies of the Organizational Documents of Optibase Ltd. and Optibase Inc. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | Authority; Due Authorization; Valid Obligation. |
|--------|-----|-------------------------------------------------|

----

|   | 3.2.1 | Seller has taken all corporate action necessary for the execution and delivery by it of this Agreement and the Ancillary Agreements.  Seller has taken, or at Closing will have taken, all corporate action necessary for the consummation of the transactions contemplated hereby and thereby. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2.2 | This Agreement constitutes, and each of the Ancillary Agreements, when executed and delivered by Seller (to the extent that it is a party thereto), will constitute, the valid and binding obligations of Seller, enforceable against it in accordance with their respective terms, (i) subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors' rights generally or to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), (ii) except as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) except to the extent the indemnification provisions contained therein may be limited by applicable Law. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.3 | No Conflicts or Defaults |
|--------|-----|--------------------------|

|   | 3.4 | Government Body Authorizations |
|--------|-----|--------------------------------|

|   | 3.4.1 | Attached hereto as Schedule F is a list describing any authorization, approval, order, license, permit or consent of, or filing or registration with, any Governmental Body, including (subject to the accuracy §‎3.18 below) any filing, notifications or consent under the Israeli Restrictive Trade Practices Law required in connection with the execution, delivery and performance by Seller of this Agreement and the Ancillary Agreements (“Required Authorization Schedule”). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.4.2 | Except as set forth on the Required Authorization Schedule, there is no other authorization, approval, order, license, Permit or consent of, or filing or registration with, any Governmental Body, that is required in connection with the execution, delivery and performance by Seller of this Agreement and the Ancillary Agreements and consummation of the transactions contemplated hereby and thereby. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.5 | Title to Assets |
|--------|-----|-----------------|

|   | 3.6 | Litigation |
|--------|-----|------------|

|   | 3.7 | Financial Statements; Liabilities |
|--------|-----|-----------------------------------|

|   | 3.7.1 | Attached hereto as Schedule H are: (i) unaudited consolidated balance sheets and statements of income as of and for the nine months ended September 30, 2009 for Optibase Ltd. (“Interim Results”); and (ii) audited consolidated balance sheets and statements of income, changes in stockholders’ equity, and cash flow as of and for the fiscal years ended (a) December 31, 2007; and (b) December 31, 2008 for Optibase Ltd. (together, “Year-End Financial Statements”). |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.7.2 | All the Interim Results and the Year-End Financial Statements were prepared in accordance with US generally accepted accounting principals (in this §‎3.7, “GAAP”) applied on a consistent basis, are reconcilable to the books and records of Optibase Ltd. and present fairly in all material respects the consolidated financial position of Optibase Ltd. as of the dates thereof and the consolidated results of Optibase Ltd.'s operations, cash flows and changes in equity for the periods then ended. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.7.3 | To its knowledge, Seller has no Liability (and there is no basis for any present or future Claim or demand against any of them giving rise to any Liability) that in accordance with GAAP would be required to be reflected on Seller’s balance sheet and are not reflected on the Interim Results.  To its knowledge, since September 30, 2009, Seller has not incurred any Liabilities other than those incurred in the Ordinary Course of Business.  To its knowledge, all such Liabilities incurred since September 30, 2009 are listed in the schedule attached hereto as Schedule I. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.7.4 | Since September 30, 2009 and except as provided for in ScheduleJ, there has not been: (a) any material adverse change in the Business (including assets, condition (financial or otherwise)) or Business operations of Seller, taken as a whole (“Material Adverse Change”); (b) any material change (individually or in the aggregate) in the contingent obligations of Seller with respect to the Business only by way of guaranty, endorsement, indemnity, warranty or otherwise, other than in the Ordinary Course of  Business; (c) any damage, destruction or Loss, whether or not covered by insurance, of any Acquired Assets that are (individually or in the aggregate) material to the Acquired Assets; (d) any waiver or compromise by Seller of a valuable right or of a material debt owed to it relating to the Business only; (e)  any increases in the compensation of any of the Employees of Seller other than in the Ordinary Course of  Business; (f) any entry into or amendment of any employment, consulting, agency, personal services, resulting in an increase compensation or severance agreement or arrangement with any party (other than hiring or dismissals of “at-will” employees in the Ordinary Course of  Business); (g) any adoption or implementation of a new Benefit Plan, or any termination or significant change in the terms of (or benefits available under) any existing Benefit Plan, except where such adoption, implementation, termination or change would not have a Material Adverse Effect; (h)  any agreement or commitment by  Seller to do any of the things described in this §‎3.7.3. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.7.5 | The cash portion of the Consideration (exclusive of the Indemnity Escrow Deposit), together with cash in the accounts of Seller, is sufficient to cover for all the Excluded Liabilities. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.8 | Inventory |
|--------|-----|-----------|

|   | 3.9 | Intellectual Property Rights |
|--------|-----|------------------------------|

|   | 3.9.1 | The schedule attached hereto as Schedule K contains a list of all: (i) registered Intellectual Property Rights which are owned, possessed or used by Seller in the Business, or Intellectual Property Rights related to the Business licensed to Seller; (ii) unregistered Intellectual Property Rights material to the Business which are owned, possessed or used by Seller in the Business, or Intellectual Property Rights related to the Business licensed to Seller; and (iii) licenses and other rights (other than disclosure of confidential information pursuant to non disclosure agreements) granted by Seller to any third party (including any rights to indemnification) with respect to any Intellectual Property Rights and all licenses and other rights granted by any third party to Seller with respect to any Intellectual Property Rights (other than “shrink wrap” software licenses for readily available computer software), in each case identifying the subject Intellectual Property Rights and the third party. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.9.2 | Seller has delivered to Purchaser correct and complete copies of all such patents, registrations, applications, licenses, agreements and rights (as amended to date) and has made available to Purchaser correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item.  Seller owns, or has the right to use pursuant to a valid, legal, binding and enforceable license (which is in full force and effect and has not been breached by Seller or by any other party thereto), all Intellectual Property Rights necessary for or used in the operation of the Business as currently conducted. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.9.3 | With respect to the Intellectual Property Rights owned by Seller, (i) Seller owns and shall convey and deliver to Purchaser at Closing, all right, title, and interest in and to all of such Intellectual Property Rights related to the Business free and clear of all Liens; (ii) such Intellectual Property Rights do not infringe any rights of any third parties; (iii) there have been no Claims against Seller asserting the invalidity, misuse or unenforceability of any of such Intellectual Property Rights; (iv) Seller has not received any notices of any interference, infringement or misappropriation by, or conflict with, any third party with respect to such Intellectual Property Rights or the conduct of the Business; (v) to the Seller's knowledge, such Intellectual Property Rights have not been interfered with, infringed upon or misappropriated by, any other persons; and (vi) the transactions contemplated by this Agreement (including the transfer of the Intellectual Property Rights to Purchaser) will not have any Material Adverse Effect on the Intellectual Property Rights.  Without limiting any other provision of this § ‎3.9 and to Seller's knowledge, the conduct of the Business has not interfered with, infringed upon or misappropriated, and does not interfere with, infringe upon or misappropriate, any Intellectual Property Rights of any other persons, nor would any future conduct as presently contemplated by Seller’s present management interfere with, infringe upon or misappropriate, any of the Intellectual Property Rights of any other persons. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.9.4 | To Seller's knowledge, each employee or consultant of Seller who is, or has been, involved in the development of Intellectual Property Rights related to the Business is bound by an appropriate form of confidentiality and intellectual property assignment agreement, and retains no rights (whether by contract, by operation of law or otherwise) in or to any such Intellectual Property Rights.  To the Seller's knowledge, none of the employees of Seller have improperly disclosed any Intellectual Property Rights related to the Business to any person. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.9.5 | Subject to the terms hereof, as of Closing, Purchaser will have the same rights, titles and interest in the Intellectual Property Rights Seller owned or possessed or was entitled to prior to the Closing Date.  Any of such Intellectual Property Rights that are, either at the date of this Agreement or immediately prior to Closing, exclusive to Seller shall, upon Closing, be exclusive to Purchaser. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10 | Employment Matters |
|--------|------|--------------------|

gard

|   | 3.10.1 | The schedule attached hereto as Schedule L describes the terms of employment with Seller of all Employees, other than the CEO and CFO of the Seller, including the Mandatory Severance Accruals, Benefit Plans and Compensation Agreements, accrued vacation for each Employee and describes any severance benefits for and the circumstances under which each Employee is or would be entitled to such severance benefits, the amount of severance benefits funding balances or shortfalls, as well as recuperation pay (“d’mei havra’a”) balances, illness day balances, fringe benefits including balances in provident or pension funds, “13th and 14th salary,” car, telephone, managers insurance and any profit sharing commission, incentive or discretionary bonus arrangements to which Seller is a part. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10.2 | Seller has delivered to Purchaser true, complete and correct copies or descriptions of each Benefit Plan applicable to Seller and any amendments thereto. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10.3 | The accrued obligations, if any, of Seller under all Benefit Plans, including, but not limited to, the Mandatory Severance Accruals, are reflected on the Interim Financial Statements and 2008 Year-End Financial Statements as of their respective dates and on the books of Optibase Ltd. for periods thereafter up to the Closing Date. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10.4 | Each Benefit Plan and any related trust complies currently, and has complied at all times in the past, both as to form and operation, in all material respects with the terms of such Benefit Plan and with the applicable provisions of applicable Laws, including, but not limited to, the laws of the State of Israel. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10.5 | Seller is not a party to any union or collective bargaining contracts with respect to any employees and there has not been, nor has Seller received written notice threatening, any representational or organizational activity, strike, slowdown, picketing or work stoppage by any union or other group of employees against Seller. Notwithstanding the aforementioned, Seller is a member of the Manufacturers Association of Israel. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.10.6 | All contributions and all payments and premiums required to have been made to or under any Benefit Plan have been timely and properly made (or otherwise properly accrued if not yet due), and nothing has occurred with respect to the operation of the Benefit Plans that would cause the imposition of any Liability on Purchaser, including penalty or Tax under any applicable Law. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10.7 | A final calculation of the employment-related rights and benefits of all of the Assumed Employees shall be made as of the Closing, including all amounts due to the Assumed Employees under the Mandatory Severance Accruals, Benefit Plans and Compensation Agreements and any other rights under Law, as if terminated without cause by Seller immediately prior to Closing and such payments will be made in full before Closing. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.11 | Agreements |
|--------|------|------------|

|   | 3.11.1 | Each of the Assumed Agreements is legal, valid, binding and enforceable against Seller, and the other parties thereto in accordance with its terms in all material aspects. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.11.2 | Seller has performed in all material respects all obligations required to be performed by it to date under, and is not in default in any material respect in respect of, any of the Assumed Agreements, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.11.3 | To Sellers knowledge, no other party to any Assumed Agreement is in default in respect thereof in any material respect, and no event has occurred which, with due notice or lapse of time or both, would constitute such a default. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.11.4 | Except as set forth on Exhibit J, no approval or consent of any third party is required to effect the transfer of any of the Assumed Agreements to Purchaser in accordance with the terms of this Agreement. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.12 | Warranties |
|--------|------|------------|

|   | 3.12.1 | The schedule attached hereto as Schedule M describes all warranties made by Seller covering or relating to any of the services delivered or the products designed, developed, manufactured, produced, distributed, supplied or sold by Seller in connection with the Business. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.12.2 | To Seller's knowledge, and except as provided for in Schedule M , there are no material Losses, Claims, damages, expenses or Liabilities (whether absolute, accrued, contingent or otherwise) of Seller asserted and arising out of or based upon incidents occurring on or prior to the Closing Date with respect to: (i) any product liability or any similar Claim that relates to any of the products designed, developed, manufactured, produced, distributed, supplied or sold by Seller in connection with the Business to others; or (ii) the delivery of faulty services; or (iii) any Claim for the breach of any express or limited product warranty, and Seller has no knowledge of any product or service defects which could give rise to any such Losses, Claims, damages, expenses or Liabilities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.12.3 | There are no defects in the designs, specifications, or process with respect to any Current Product, except for such defects which would not have a Material Adverse Effect.  During the past five years, there has been no material recall, withdrawal, or suspension from the market of any product designed, manufactured, sold, supplied or distributed by Seller. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.13 | Permits; Compliance with Law |
|--------|------|------------------------------|

|   | 3.13.1 | The schedule attached hereto as Schedule N lists all material Permits held by Seller and its employees relating to the conduct of the Business, including any such Permits relating to protection of the environment or the use or disposal of hazardous materials. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.13.2 | Seller has complied in all material respects with the terms of each the Permits described in the Permit Schedule and any applicable Law.  Seller has not received any Claim arising out of the failure to obtain any Permit.  To Seller's knowledge, the Business has not been, and is not being, conducted in material violation of any Law including any such Laws relating to protection of the environment or the use or disposal of hazardous materials.  None of the Permits will terminate, fail to automatically be assigned to Purchaser or lose effect as a consequence of the transactions contemplated by this Agreement. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.14 | Insurance |
|--------|------|-----------|

|   | 3.14.1 | All of the Acquired Assets are adequately insured against loss or damage by theft, fire and all other hazards and risks of a character usually insured against by persons operating similar properties in the localities where such properties are located, under valid and enforceable policies issued by reputable insurance carriers. Set forth on the schedule attached hereto as Schedule O is a complete list of insurance policies which Seller maintains relating to the Business.  Such policies are in full force and effect and Seller has not received a notice of cancellation relating to any such policies.  Neither the execution of this Agreement nor performance of any transaction contemplated hereby shall affect the insured’s rights under such insurance policies and all rights and benefits under such insurance policies are assignable to the name or benefit of Purchaser. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.15 | Suppliers, Customers and End of Life of Components |
|--------|------|----------------------------------------------------|

|   | 3.15.1 | Set forth on the schedule attached hereto as Schedule P is a list of all suppliers (including assemblers or manufacturers of component or finished products) and customers accounting for 5% or more of the annual purchases and sales, respectively, of Seller.  To Seller's knowledge, Seller has adequate sources of supply for all Current Products or the components thereof.  Schedule P  includes also a list of End of Life of any component known to Seller.  In the opinion of Seller, the relationship of Seller with such suppliers and customers is good and there has been no expression of any intention to terminate or materially modify any of such relationships. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 3.16 | Grants, Incentives and Subsidies |
|--------|------|----------------------------------|

|   | 3.16.1 | Schedule Q describes all outstanding Grants to Seller, including the aggregate amounts of each Grant, and the aggregate outstanding obligations thereunder of Seller with respect to royalties, or the outstanding amounts to be paid to the Office of the Chief Scientist, Israeli Ministry of Industry and Trade and the composition of such obligations or amount by the product or product family that it relates to. No royalties are due to be paid to the Consortium. Except as provided in Schedule Q , there are no pending Grants to Seller. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.16.2 | Seller has made available to Purchaser, prior to the date hereof, correct copies of all applications for Grants submitted by Seller and of all letters of approval, and supplements thereto, granted to Seller, including those approved and appearing in the Grants Schedule.  Seller is in material compliance with the terms and conditions of the Grants and has duly fulfilled all the undertakings relating thereto in all material respects. To Seller's knowledge, there is no event or other set of circumstances which might lead to the revocation or material modification of any of the Grants. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.17 | Brokers |
|--------|------|---------|

|   | 3.18 | Power of Attorney |
|--------|------|-------------------|

|   | 3.19 | Israeli Restrictive Trade Practices Law |
|--------|------|-----------------------------------------|

----

|   | 3.20 | Disclosure |
|--------|------|------------|

| 4. | Representations and Warranties of Purchaser |
|----|---------------------------------------------|

|   | 4.1 | Due Incorporation of Purchaser |
|--------|-----|--------------------------------|

|   | 4.2 | Knowledge, Sophistication and Experience; Financial Capability |
|--------|-----|----------------------------------------------------------------|

|   | 4.3 | Due Diligence |
|--------|-----|---------------|

----

|   | 4.4 | Business Ability |
|--------|-----|------------------|

|   | 4.5 | Authority; Due Authorization; Valid Obligation |
|--------|-----|------------------------------------------------|

|   | 4.6 | Restrictive Trade Practices Law |
|--------|-----|---------------------------------|

|   | 4.7 | No Conflicts or Defaults |
|--------|-----|--------------------------|

|   | 4.8 | Authorization |
|--------|-----|---------------|

----

|   | 4.9 | Litigation |
|--------|-----|------------|

|   | 4.10 | Brokers |
|--------|------|---------|

|   | 4.11 | Disclosure |
|--------|------|------------|

| 5. | Pre-Closing Covenants |
|----|-----------------------|

|   | 5.1 | Conduct of the Businesses Prior to Closing |
|--------|-----|--------------------------------------------|

|   | 5.1.1 | Following the execution of this Agreement and prior to the Closing Date, Seller shall not, without prior written authorization of Purchaser, take any action that would otherwise be required to be disclosed on §‎3.7.3 above or any other action that is outside the Ordinary Course of Business or might prejudice the consummation of the transactions contemplated by this Agreement.  Seller shall maintain such insurance as are currently in effect in respect of its assets and the Business until the Closing Date. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.1.2 | Prior to the earlier of the Closing Date and the termination of this Agreement pursuant to §‎9.6 below, Seller shall not, directly or indirectly, through any officer, director, employee, agent or otherwise: take any action to offer, solicit, initiate, encourage or assist the submission or acceptance of any proposal, negotiation or offer from any person or entity other than Purchaser relating to the acquisition, sale, or transfer of any of the Acquired Assets or change of control over Seller other than in the Ordinary Course of Business. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.2 | Further Information |
|--------|-----|---------------------|

----

|   | 5.3 | Notice of Certain Events |
|--------|-----|--------------------------|

|   | 5.4 | Consents, Waivers and Filings |
|--------|-----|-------------------------------|

----

|   | 5.5 | Employees |
|--------|-----|-----------|

|   | 5.5.1 | Prior to Closing, Purchaser will in good faith offer employment (but may, in the agreement with the Employees, specifically leave it open for its discretion not to hire any such Employees at Closing) to at least 80% of the Employees of the Seller  (at Purchaser's complete discretion), provided that the non-hiring of such Employees does not cause Purchaser not to meet the closing condition in section ‎6.1.2 below, and will offer in good faith employment to additional Employees as required to fulfill the conditions to Closing. Such offers of employment and, with respect to consultants, continuation of services, shall be on terms no less favorable then their current terms of employment or service with the Seller and Purchaseer will employ all such Employees that have accepted employment (such employees and consultants, “Assumed Employees”); provided, however, that each Assumed Employees shall, as a condition precedent to such Employee's employment with Purchaser deliver to Purchaser an executed Waiver and an executed Employment Agreement.  It is clarified that the Assumed Employees will be dismissed from Seller prior to the execution of the Waiver and the commencement of their employment with Purchaser. Seller hereby grants permission to Purchaser to contact the Employees with regard to making preliminary offers of employment as aforesaid, with any such employment to be effective subject to Closing taking place, provided such contact is coordinated with Seller. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.5.2 | Any Assumed Employee shall be deemed to have been terminated by Seller at or prior to Closing and rehired by Purchaser and Closing. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.5.3 | Seller shall have fulfilled its obligations under §‎3.10.7. |
|--------|-------|------------------------------------------------------------------------|

|   | 5.5.4 | Notwithstanding the foregoing, nothing in this §‎5.5 shall be construed as requiring Purchaser to employ any current or former employee of Seller for any specified period of time after Closing, except to the extent otherwise provided in a written employment agreement between any such employee and Purchaser. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.6 | Risk of Loss |
|--------|-----|--------------|

|   | 5.6.1 | Except as otherwise provided for in this §‎5.5.4, from the date hereof through the Closing Date, all risk of Loss to the Acquired Assets shall be borne by Seller (other than Loss caused by the acts or negligence of Purchaser or any of its employees, officers, agents or representatives, which Loss or damage shall be the responsibility of Purchaser). |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 5.6.2 | If, before Closing, all or any material portion of the Acquired Assets are (1) taken by eminent domain or are the subject of a pending or contemplated taking which has not been consummated, (2) damaged or destroyed by flood, fire or other casualty, or (3) are otherwise not in the ownership and possession of Seller immediately prior to Closing; Seller shall notify Purchaser promptly in writing of such fact and shall use its best efforts to cure such taking or Loss within 30 days.  Subject to §‎5.6.3 below, if the fair market value of the Acquired Assets that are the subject of, or are adversely affected by, such taking or loss is adversely affected by such taking or loss and Seller has not notified Purchaser of its intention to cure such taking or Loss within 30 days after its occurrence, Purchaser and Seller shall negotiate in good faith a fair and equitable adjustment to the Consideration  and, upon such settlement, consummate the transactions contemplated by this Agreement pursuant to the terms of this Agreement.  If no such settlement is reached within 60 days after Seller has notified Purchaser of such taking or casualty, Purchaser may terminate this Agreement pursuant to § ‎9.6 below. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.6.3 | Any insurance proceeds received by either Purchaser or Seller from the insurance policies described herein on account of such Loss shall be applied to repair or replacement, with any excess amounts due to Purchaser, unless the Parties agree otherwise. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6. | Closing Conditions |
|----|--------------------|

|   | 6.1 | Conditions to the Obligations of Purchaser |
|--------|-----|--------------------------------------------|

|   | 6.1.1 | Any authorization, approval, order, license, permit or consent, or filing or registration listed on the Required Authorization Schedule shall have been obtained or made, except for any authorization appearing in the Required Authorization Schedule as optional; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.1.2 | At least fifty (50) of the Employees shall have executed and delivered a Waiver and an Employment Agreement; and |
|--------|-------|------------------------------------------------------------------------------------------------------------------|

|   | 6.1.3 | No order, injunction or decree shall have been issued and be continuing before a court and no action, suit or proceeding by any governmental authority shall have been instituted or threatened which questions or attacks the validity or legality of the transactions contemplated hereby or seeks to restrain or prevent the consummation of the acquisition of its assets pursuant to this Agreement or the other transactions contemplated hereby; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 6.2 | Conditions to the Obligations of Seller |
|--------|-----|-----------------------------------------|

|   | 6.2.1 | All representations and warranties of Purchaser set forth herein shall be true and correct in all material respects as of the Closing Date, with the same effect as if made at and as of the Closing Date and Seller shall have received a certificate signed by the CEO of Vitec Multimedia to such effect; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.2 | Purchaser shall have complied in all material respects with its covenants and agreements set forth in this Agreement, except as to those covenants and agreements to be performed or observed after the Closing Date and Seller shall have received a certificate signed by the CEO of Vitec Multimedia to such effect; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.3 | Any authorization, approval, order, license, permit or consent, or filing or registration listed on the Required Authorization Schedule shall have been obtained or made; except for any authorization appearing in the Required Authorization Schedule as optional; |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.4 | No order, injunction or decree shall have been issued and be continuing before a court and no action, suit, or proceeding by any governmental authority shall have been instituted or threatened which questions or attacks the validity or legality of the transactions contemplated hereby or seeks to restrain or prevent the consummation of the acquisition of the Acquired Assets pursuant to this Agreement or the other transactions contemplated hereby. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6.2.5 | The resolutions of the General Meeting of Optibase Ltd. approving the execution and consummation of this Agreement by Optibase Ltd. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------|

----

| 7. | Confidentiality; Non-Competition |
|----|----------------------------------|

|   | 7.1 | Confidentiality |
|--------|-----|-----------------|

|   | 7.2 | Non-Competition |
|--------|-----|-----------------|

|   | 7.2.1 | Engage in any manner in the design, development, manufacturing, marketing or servicing of, or services relating to (i) the Business or (ii) any other product, product line or services offered, sold, produced or under development by Purchaser’s business unit associated with the Business during such period; |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 7.2.2 | Solicit or attempt to solicit business of any customers of Seller or Purchaser for products or services the same or similar to those offered, sold, produced or under development by Purchaser; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.2.3 | Otherwise divert or attempt to divert from Purchaser any business related to the Business; |
|--------|-------|--------------------------------------------------------------------------------------------|

|   | 7.2.4 | Solicit or attempt to solicit for any business endeavor any employee of Purchaser (including the Assumed Employees); |
|--------|-------|----------------------------------------------------------------------------------------------------------------------|

|   | 7.2.5 | Interfere in any material respect with any business relationship related to the Business between Purchaser and any other person; or |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.2.6 | Render any services to, or have any interest as a stockholder, partner, lender or otherwise in, any person which is engaged in activities which, if performed by Seller, would violate this §‎7.2 except if such interest amounts to no more than 10% of such person and does not provide the Seller control over such person (as such term is defined under the Securities Law, 1967). |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.3 | Equitable Relief |
|--------|-----|------------------|

| 8. | Post-Closing Covenants |
|----|------------------------|

|   | 8.1 | Further Assurances |
|--------|-----|--------------------|

|   | 8.1.1 | Whenever reasonably requested to do so by Purchaser, on or after the Closing Date, Seller shall, at Purchaser's expense, do, execute, acknowledge and deliver all such acts, assignments, confirmations, consents, other instruments of assignment, transfer and conveyance, and any and all such further instruments and documents, in form reasonably satisfactory to Purchaser and its counsel, as shall be reasonably necessary or advisable to carry out the intent of this Agreement and to vest in Purchaser all right, title and interest in and to the Acquired Assets. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.2 | Each of the Parties shall take such further action (including the execution and delivery of such further instruments and documents) following Closing as the other party may reasonably request in order to carry out the purposes of this Agreement.  In particular, Purchaser acknowledges that Seller may require, shortly after the Closing Date, some transitional assistance from Purchaser and its personnel (who are former employees of Seller) in respect of winding down Seller’s Business related operations, and Purchaser agrees to instruct and allow such personnel to reasonably assist Seller, after advance coordination with Purchaser. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8.1.3 | Seller shall not cause or, to the extent within its control, permit the occurrence of any Credit Event with regard to Seller for the at least 3 months following Closing and shall take actions to cure any Credit Event otherwise caused. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.2 | Collection |
|--------|-----|------------|

|   | 8.3 | Information |
|--------|-----|-------------|

|   | 8.4 | Access to Records |
|--------|-----|-------------------|

----

|   | 8.5 | Assistance |
|--------|-----|------------|

|   | 8.6 | Limited Power of Attorney |
|--------|-----|---------------------------|

|   | 8.6.1 | Seller hereby nominates, constitutes and appoints attorney Doron Afik (in this §‎8.6, an “Attorney-in-Fact”) with full power of substitution to another attorney and if such attorney is not part of such Attorney-in-Fact’s firm, shall notify Seller, to act as Seller’s true and lawful agent and attorney-in-fact, for it and in its name, place and stead, to take any and all steps in the name and on behalf of Seller necessary or desirable, in the determination of any Attorney-in-Fact to take any and all actions necessary, or desirable in the opinion of such Attorney-in-Fact to fulfill Seller’s obligations under §‎8.1.1 and ‎8.1.2 above, including to take any act required for enforcement or perfection of the transfer of the Acquired Assets to the name of Purchaser or any entity designated by Purchaser; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.6.2 | The Attorney-in-Fact shall have full power and authority to do and perform any and all acts and things requisite for the sole purpose set forth hereinabove as fully for all intents and purposes as Seller might or could do in person. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.6.3 | The limited power of attorney is coupled with an interest and is thus irrevocable. |
|--------|-------|------------------------------------------------------------------------------------|

|   | 8.7 | Line of Business of Purchaser. Performance of Obligations. |
|--------|-----|------------------------------------------------------------|

| 9. | Indemnification; Survival |
|----|---------------------------|

|   | 9.1 | Survival |
|--------|-----|----------|

----

|   | 9.2 | Indemnification |
|--------|-----|-----------------|

|   | 9.2.1 | In the event (i) Seller breaches, or (ii) any third party alleges, in writing under circumstances which Purchaser may reasonably believe may lead to a judicial proceeding against Purchaser and Purchaser makes a written claim for indemnification pursuant to this Section ‎9 within the survival period set forth in § ‎9.1 above, then Seller shall indemnify and hold harmless Purchaser, each of Purchaser’s affiliates, and each of their respective successors, assigns, officers, directors, employees and agents against any Loss suffered or incurred by any such Indemnified Person, arising or resulting from or based upon: |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.2.1.1 | any breach or material inaccuracy of any representation or warranty of Seller containedin this Agreement or any of the Ancillary Agreements which survives Closing; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.2.1.2 | the breach of any covenant of Seller contained in this Agreement or any of the Ancillary Agreements; |
|--------|---------|------------------------------------------------------------------------------------------------------|

|   | 9.2.1.3 | any Excluded Liability; or |
|--------|---------|----------------------------|

|   | 9.2.1.4 | Claims made by any Employee in connection with any pre-Closing liabilities of Seller relating to Employees. |
|--------|---------|-------------------------------------------------------------------------------------------------------------|

|   | 9.2.2 | In the event (i) Purchaser breaches, or (ii) any third party alleges, in writing under circumstances which Seller may reasonably believe may lead to a judicial proceeding against Seller, and Seller makes a written claim for indemnification pursuant to this Section ‎9 within the survival period set forth in § ‎9.1 above, then Purchaser shall indemnify and hold harmless Seller, each of Seller’s affiliates, and each of their respective successors, assigns, officers, directors, employees and agents against any Loss suffered or incurred by any such Indemnified Person, arising or resulting from or based upon: |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.2.2.1 | any breach or material inaccuracy of any representation or warranty of Purchaser contained in this Agreement or any of the Ancillary Agreements which survives Closing; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.2.2.2 | the breach of any covenant of Purchaser contained in this Agreement or any of the Ancillary Agreements; or |
|--------|---------|------------------------------------------------------------------------------------------------------------|

|   | 9.2.2.3 | any Claim relating to the Acquired Assets or the Assumed Liabilities arising on or after the Closing; |
|--------|---------|-------------------------------------------------------------------------------------------------------|

----

|   | 9.3 | Matters Involving Third Parties |
|--------|-----|---------------------------------|

|   | 9.3.1 | If any third party shall notify any Party with respect to any matter (in this §‎9.3, “Third Party Claim”) which may give rise to a Claim for indemnification for Losses under this § ‎9, then the Indemnified Person shall promptly notify the other Party (in this §‎9.3, the “Indemnifying Party”) thereof in writing; provided, however, that no delay on the part of the Indemnified Person in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is materially prejudiced. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.2 | The Indemnifying Party will have the right to defend the Indemnified Person against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Person so long as: |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.2.1 | The Indemnifying Party notifies the Indemnified Person in writing within 10 Business Days after the Indemnified Person has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Person from and against any Loss the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.2.2 | The Indemnifying Party provides the Indemnified Person with evidence reasonably acceptable to the Indemnified Person that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.2.3 | settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Person, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Indemnified Person;  and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.2.4 | The Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. |
|--------|---------|-----------------------------------------------------------------------------------------------|

|   | 9.3.3 | So long as the Indemnifying Party conducts the defense of the Third Party Claim in accordance with §‎9.3.2 above: |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.3.1 | the Indemnified Person may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.3.2 | the Indemnified Person will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably); and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 9.3.3.3 | The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Person (not to be withheld unreasonably). |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.4 | In the event any of the conditions in §‎9.3.2 above is or becomes unsatisfied, however: |
|--------|-------|----------------------------------------------------------------------------------------------------|

|   | 9.3.4.1 | the Indemnified Person may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Person need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.4.2 | The Indemnifying Party will reimburse the Indemnified Person promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses); and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3.4.3 | The Indemnifying Party will remain responsible for any Losses the Indemnified Person may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this §‎9. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.4 | Maximum Indemnification |
|--------|-----|-------------------------|

|   | 9.5 | Exclusive Remedy |
|--------|-----|------------------|

|   | 9.6 | Determination of Indemnity |
|--------|-----|----------------------------|

| 10. | Termination |
|-----|-------------|

|   | 10.1 | Termination of Agreement |
|--------|------|--------------------------|

|   | 10.1.1 | Purchaser may terminate this Agreement |
|--------|--------|----------------------------------------|

----

|   | 10.1.1.1 | if Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Purchaser has notified Seller of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach; |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1.1.2 | if Closing shall not have occurred on or before the lapse of 120 calendar days from the date of this Agreement (or such later date as may be designated by mutual written agreement of the Parties) by reason of the failure of any condition precedent under §‎6.1 above (unless the failure results primarily from Purchaser itself breaching any representation, warranty, or covenant contained in this Agreement (including any failure to satisfy any condition to the obligations of Purchaser); or |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1.1.3 | pursuant to § ‎5.6.2 above. |
|--------|----------|----------------------------------------|

|   | 10.1.2 | Seller may terminate this Agreement: |
|--------|--------|--------------------------------------|

|   | 10.1.2.1 | if Purchaser has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Seller has notified Purchaser of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach; |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1.2.2 | if Closing shall not have occurred on or before the lapse of 120 calender days from the date of this Agreement  (or such later date as may be designated by mutual written agreement of the Parties) by reason of the failure of any condition precedent under §‎6.2 above (unless the failure results primarily from Seller itself breaching any representation, warranty, or covenant contained in this Agreement (including any failure to satisfy any condition to the obligations of Seller)); or |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.1.2.3 | in its sole discretion if any required consent to assign a Consortium shall not have been obtained as of the Closing Date. |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Effect of Termination |
|--------|------|-----------------------|

| 11. | Dispute Resolution |
|-----|--------------------|

|   | 11.1 | Governing Law |
|--------|------|---------------|

----

|   | 11.2 | Submission to Jurisdiction |
|--------|------|----------------------------|

|   | 11.3 | Arbitration |
|--------|------|-------------|

|   | 11.3.1 | Arbitration. |
|--------|--------|--------------|

|   | 11.3.2 | Interim Relief. |
|--------|--------|-----------------|

|   | 11.3.3 | Arbitral Award. |
|--------|--------|-----------------|

----

| 12. | Miscellaneous |
|-----|---------------|

|   | 12.1 | Press Releases and Public Announcements |
|--------|------|-----------------------------------------|

|   | 12.2 | Relationship of the Parties |
|--------|------|-----------------------------|

|   | 12.3 | No Benefit to Others |
|--------|------|----------------------|

|   | 12.4 | Integration of Terms |
|--------|------|----------------------|

|   | 12.5 | Succession and Assignment |
|--------|------|---------------------------|

----

|   | 12.6 | Counterparts |
|--------|------|--------------|

|   | 12.7 | Construction |
|--------|------|--------------|

|   | 12.7.1 | The recitals and schedules hereto consist an integral part hereof.  The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.7.2 | The headings in this Agreement and their associated numbers are included for ease of reference only and shall have no legal, constructive or interpretive effect. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.7.3 | The word “including” shall mean including without limitation. |
|--------|--------|---------------------------------------------------------------------------|

|   | 12.7.4 | The word “person” shall mean any legal entity, including an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Body; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.7.5 | 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 this Agreement. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.8 | Amendments and Waivers |
|--------|------|------------------------|

|   | 12.9 | Transfer Taxes |
|--------|------|----------------|

----

|   | 12.10 | Expenses |
|--------|-------|----------|

|   | 12.11 | Specific Performance |
|--------|-------|----------------------|

|   | 12.12 | Severability and Blue Penciling |
|--------|-------|---------------------------------|

|   | 12.12.1 | If, and solely to the extent that, any provision of this Agreement shall for any reason be held to be excessively broad, the term shall be construed in a manner to enable it to be enforced to the extent compatible with applicable law.  If, and solely to the extent that, any provision of this Agreement shall be invalid or unenforceable, or shall render this entire Agreement to be unenforceable or invalid, such offending provision shall be of no effect and shall not affect the validity of the remainder of this Agreement; provided, however, the Parties shall use their respective reasonable efforts to renegotiate the offending provisions to best accomplish the original intentions of the Parties. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.12.2 | If the final judgment of a court of competent jurisdiction declares that any item or provision hereof is invalid or unenforceable, the parties hereto 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, or to delete specific words or phrases, and 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. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 12.13 | Notices All notices, consents, or other notifications given or made pursuant hereto shall be in writing and shall be deemed duly given or made (i) upon delivery or refusal of such notice if sent by a recognized courier service; (ii) seven Business Days after it is mailed by prepaid registered mail; or (iii) upon delivery to a fax machine capable of confirming receipt, and in each case addressed as follows (or at such other address for a Party as shall be specified in a notice so given): |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Seller: | Optibase Ltd.7 Shenkar St.P.O. Box 2170Herzlia, 46120IsraelFax: +972-9-970-9222Attention: CEO, CFOOptibase Inc.c/o Optibase Ltd..7 Shenkar St.P.O. Box 2170Herzlia, 46120IsraelFax: +972-9-970-9222Attention: President, CEO, CFO |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | With copy (which shall not constitute a notice) to: Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.Attention: Adva Bitan, Adv.One Azrieli Center (Round Building)Tel Aviv 67021, IsraelFax: +972 (3) 607.4464 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Purchaser: |
|--------|------------|

|   | Optibase Technologies Ltd. |
|--------|----------------------------|

|   | With copy (which shall not constitute a notice) to: |
|--------|-----------------------------------------------------|

----

|  /s/ Shlomo (Tom) Wyler                                                                                             |   |  /s/ Amir Philips                                                                         |   | /s/ Yaron Comarov                                                                                                           |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------|
| Optibase Ltd. By:       Shlomo (Tom) WylerTitle:    C.E.O    |   | Optibase Ltd. By:       Amir PhilipsTitle:    C.F.O    |   | Optibase Ltd. By:      Yaron ComarovTitle:    VP Operations          |
|                                                                                                                     |   |                                                                                                               |   |                                                                                                                        |
| /s/ Shlomo (Tom) Wyler                                                                                                   |   | /s/ Amir Philips                                                                                                   |   | /s/ Philip Wetzel                                                                                                           |
| Optibase Inc. By:       Shlomo (Tom) WylerTitle:    Director |   | Optibase Inc. By:       Amir PhilipsTitle:    Director |   | Optibase Technologies Ltd. By:       Philip WetzelTitle:    CEO |

----

| WHEREAS, | Seller and Purchaser have entered into that certain Asset Purchase Agreement dated as of March 16, 2010 for the sale by Seller, and the purchase by Purchaser, of the Acquired Assets, and for the assumption by Purchaser of the Assumed Liabilities (such agreement, as amended, supplemented or restated from time to time, herein called the “APA”).  Capitalized terms that are used herein, except as otherwise defined herein, shall be as defined in the APA. |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| WHEREAS, | under § ‎2.2.1.3 of the APA, the Parties agreed to transfer to the Indemnity Escrow Agent, on the Closing Date, cash comprising the Indemnity Escrow Deposit (i.e., USD 1,000,000) plus VAT if applicable. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| WHEREAS, | the Parties desire that the Indemnity Escrow Deposit be deposited by the Indemnity Escrow Agent into an escrow account maintained by the Indemnity Escrow Agent, in accordance with the terms of this Escrow Agreement. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| WHEREAS, | the Parties hereto desire to establish the terms and conditions for the mode of operation for the Indemnity Escrow Agent in connection with the escrowed amount maintained by the Indemnity Escrow Agent. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Establishment of Escrow; Account |
|--------|----|----------------------------------|

----

|   |   2. |  Escrow Ledger |
|--------|-----------|---------------------|

|   |   3. |  Resolution of Demands |
|--------|-----------|-----------------------------|

|   | 3.1 | Indemnification Obligations |
|--------|-----|-----------------------------|

|   | 3.2 | Notice of Demands |
|--------|-----|-------------------|

----

|   | 3.3 | Resolution of Demands |
|--------|-----|-----------------------|

|   | 3.3.1 | Uncontested Demands.  In the event that Seller does not contest, in accordance with § 4.3.2 below, a Notice of Demand within thirty (30) Business Days of receiving such Notice of Demand from the Purchaser, in accordance with § ‎4.2 above, Purchaser may deliver to the Indemnity Escrow Agent, with a copy to Seller, a written demand by Purchaser (a “Purchaser Demand”) stating that a Notice of Demand has been delivered to the Indemnity Escrow Agent, the date of delivery of such Notice of Demand to the Indemnity Escrow Agent, and that no notice of contest has been received from Seller within thirty (30) Business Days of the Purchaser delivering the Notice of Demand to Seller, in accordance with § ‎4.3.2 below, and further stating the amount of Escrowed Funds to be released to Purchaser in accordance with this §‎4.3.1.  The Indemnity Escrow Agent shall, as soon as practicable following receipt of such Purchaser Demand, release to Purchaser the amount of Escrowed Funds stipulated in the Purchaser Demand and shall notify Seller of such transfer. |
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|   | 3.3.2 | Contested Demands.  In the event Seller gives written notice contesting all or a portion of a Notice of Demand to the Indemnity Escrow Agent and Purchaser (a “Contested Demand”) within the thirty day period provided above, which notice shall not be valid unless setting forth the amount contested, such Contested Demand shall be settled in accordance with §‎4.4 below.  Any portion of a Notice of Demand that is not contested shall be resolved as set forth above in §‎4.3.1 above.  The Seller shell send a copy of its written notice to the Purchaser, in which it shall set forth in reasonable detail the reason(s) for contesting such Notice of Demand.  If notice is received by the Indemnity Escrow Agent that a Notice of Demand will be a Contested Demand by Seller, then the Indemnity Escrow Agent shall hold in the Escrow Account, after what would otherwise be the Final Release Date (as defined below), the amount contested under the Contested Demand (such amount, “Projected Indemnifiable Amount”) until the earlier of (i) receipt of a settlement agreement executed by Purchaser and Seller setting forth a resolution of the Contested Demand and an accounting for all Projected Indemnifiable Amounts associated with settling the Contested Demand, which shall set forth the amount of Escrowed Funds to be released to Purchaser  and/or Seller as a result of settling such Contested Demand; or (ii) receipt of a written notice from either Purchaser or Seller (a copy of which shall have been delivered to the other Party) attaching a copy of the final award or decision of the arbitrator and an accounting for all Projected Indemnifiable Amounts associated with the Contested Demand, which shall set forth the amount of Escrowed Funds to be released to and/or Seller Purchaser as a result of contesting such Contested Demand (both ‎4.3.2(i) and ‎4.3.2(ii) are collectively referred to herein as a “Purchaser Distribution Notice”).  Upon the Purchaser delivering a Purchaser Distribution Notice to the Indemnity Escrow Agent, the Indemnity Escrow Agent shall, as soon as practicable following ten days after receipt of such Purchaser Distribution Notice, release to Purchaser that amount of the Escrowed Funds specified in the Purchaser Distribution Notice. |
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|   | 3.4 | Dispute Resolution |
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|   | 3.4.1 | Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Israel, without giving effect to the rules of conflict of laws thereof other than when application of Israeli law would render this Agreement, or any material provision herein, void or unenforceable. |
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|   | 3.4.2 | Arbitration.  Any controversy or claim arising out of or relating to this Agreement, including questions of arbitrability, shall be settled solely by arbitration in accordance with this Section ‎4.4.  Any such arbitration shall be conducted in the English language, in Tel Aviv, Israel, by a single arbitrator mutually agreed upon by the relevant Parties who is an attorney, and in the event that the identity of an arbitrator cannot be agreed upon within 15 days following submission to arbitration - by an arbitrator who is an attorney admitted to practice in Israel and appointed by the President of the Israeli Bar Association.  The arbitrator shall not be bound by rules of civil procedure or the principals governing admissibility of evidence.  The arbitrator shall have the right to order discovery as the arbitrator deem appropriate.  This § ‎4.4 shall be deemed as an Arbitration Agreement. |
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|   | 3.4.3 | Payment of Costs.  The Indemnity Escrow Agent and the prevailing party in any dispute will be entitled to an award of attorneys’ fees and costs, including those provided for above, and as between the Purchaser and the Seller, all costs and expenses of the Indemnity Escrow Agent in connection with the subject dispute, will be paid by the losing party, subject in each case to a determination by the court as to which party is the prevailing party and the amount of such fees and costs to be allocated to such party. |
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|   | 3.4.4 | Interim Relief.  Notwithstanding anything in this Section ‎4.4 each Party may seek interim injunctive relief from a court of competent jurisdiction provided that such interim injunction relief shall be until an arbitrator is appointed.  The continuance of such interim relief may be determined by the arbitrator.  No arbitration pursuant to this Agreement shall be stayed or delayed pending the outcome of any judicial or other proceedings. |
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|   | 3.4.5 | Arbitral Award.  The award of the arbitrator shall be issued in a written opinion, which shall set forth the arbitrator’s finding of facts and conclusions, and shall be conclusive and binding upon the Parties.  Judgment upon an arbitral award may be entered in any court of competent jurisdiction.  The arbitrator shall have the right to order injunctive relief and the payment of attorneys’ fees, costs and other damages. |
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|   | 3.4.6 | No Release to Purchaser until Resolution.  Purchaser shall not deliver to the Indemnity Escrow Agent a Purchaser Distribution Notice (as defined below) requesting the Indemnity Escrow Agent to release to Purchaser any of the Escrowed Funds held in the Escrow Account pursuant to a Notice of Demand, and Indemnity Escrow Agent shall not acknowledge such a notice, until such Demand has been resolved in accordance with § ‎4.3 above. |
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|   | 4. | Release of Escrowed Funds The Indemnity Escrow Agent shall, 24 months after Closing Date or, if such date is not a Business Day, on the first business day thereafter (the "Final Release Date"), release the following amount to Seller or its successor pursuant to written wiring instructions received by the Indemnity Escrow Agent from the Seller prior thereto: |
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|   | 4.1. | the Escrowed Funds, less |
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|   | 4.2 | the aggregate Projected Indemnifiable Amounts (to the extent that the Indemnity Escrow Agent has received copies of all such Notices of Demands in accordance with § ‎4.2 above; and less |
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|   | 4.3 | all fees and expenses of the Indemnity Escrow Agent incurred to date and anticipated to be incurred in connection with outstanding Notices of Demands; plus the ratable amount of interest on the Projected Indemnifiable Amounts which remains in escrow. |
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|   | 5. | Indemnity Escrow Agent 5.1              Duties; Liabilities The duties of the Indemnity Escrow Agent shall be entirely administrative and not discretionary. The Indemnity Escrow Agent will incur no liability with respect to any action or inaction taken or suffered by the Indemnity Escrow Agent, except his own willful conduct or bad faith. Purchaser and Seller hereby jointly and individually waive any suit, claim, demand or cause of action of any kind which they may have or may assert against the Indemnity Escrow Agent arising out of or in connection with this Agreement, including without limitation, the acceptance, performance or administration of the Indemnity Escrow Agent’s duties, unless such suit, claim, demand or cause of action is based upon the willful misconduct or bad faith of the Indemnity Escrow Agent. The Indemnity Escrow Agent shall be obligated to act only in accordance with written instructions received by it as provided in this Escrow Agreement and shall not be liable, and shall not be deemed to have acted with willful misconduct or bad faith, as a result of its compliance with the same.  The Indemnity Escrow Agent may consult its own legal counsel, in connection with its duties hereunder or as to any other matter relating to this Escrow Agreement, and such reasonable fees and expenses may be charged to, and paid from, the Escrow Account, in respect of any question arising under this Escrow Agreement, and the Indemnity Escrow Agent shall not be liable, and shall not be deemed to have acted with willful misconduct for any action taken or omitted upon advice of such counsel. |
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|   | 6. | Indemnity |
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|   | 7. | Acknowledgment by Indemnity Escrow Agent |
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|   | 8. | Resignation or Removal of Indemnity Escrow Agent; Successor |
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|   | 8.1.1 | The Indemnity Escrow Agent may resign as such thirty days after giving written notice of its resignation to the other parties hereto.  Similarly, the Indemnity Escrow Agent may be removed and replaced thirty days after receiving written notice of its removal and replacement delivered jointly by Purchaser and Seller, which notice shall not be valid unless it includes the details of the successor escrow agent.  In either event, the duties of the Indemnity Escrow Agent shall terminate thirty days after the date of such notice (or as of such earlier date as may be mutually agreeable); and the Indemnity Escrow Agent shall then deliver the balance of the Escrowed Funds then in its possession to a successor escrow agent as shall be appointed within such period (in the event the Indemnity Escrow Agent resigns) by Purchaser and Seller as evidenced by a written notice filed with the Indemnity Escrow Agent. |
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|   | 8.1.2 | If the Indemnity Escrow Agent resigned and the parties hereto are unable to agree upon a successor escrow agent or shall have failed to appoint a successor prior to the expiration of thirty days following the date of the notice of resignation or removal, then any of the Parties may initiate arbitration in accordance to § 4.4.2 for the appointment of a successor escrow agent or other appropriate relief, any such resulting appointment shall be binding upon all of the parties hereto. |
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|   | 9. | Fee The Indemnity Escrow Agent shall be paid for services hereunder payment in the amount of US$ 3,000 plus VAT per annum (“Fee”) and any additional fees and expenses incurred until distribution of the Escrow Funds in full. Subject to §‎4.4.3 above, the fees and expenses of the Indemnity Escrow Agent shall be borne by the Seller.  If the Indemnity Escrow Agent continues to hold any Projected Indemnifiable Amount in the Escrow Account after the Final Release Date due to the provisions herein, the Indemnity Escrow Agent shall be paid an additional amount of US$ 3,000 plus VAT and US$ 250 to cover banking fees and charges for each additional year or part thereof that the Escrow Agent continues to hold such amounts. The Indemnity Escrow Agent may set off any payment due to it plus interest from distributions otherwise due to the party in debt to the Indemnity Escrow Agent.  The Purchaser may choose to pay the Indemnity Escrow Agent any payment due to the Indemnity Escrow Agent by the Seller and set off such payment plus interest from amounts due from Purchaser to Seller. |
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|   | 10. | Termination This Escrow Agreement and the escrow created thereby shall terminate as soon as practicable following (i) delivery of a joint written instruction of Purchaser and Seller terminating this Escrow Agreement, including detailed instructions as to the remaining funds in the escrow, if any; or (ii) the Indemnity Escrow Agent’s delivery or release of all remaining Escrowed Funds pursuant to this Escrow Agreement. |
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|   | 11. | Miscellaneous This Escrow Agreement and the escrow created thereby shall terminate as soon as practicable following (i) delivery of a joint written instruction of Purchaser and Seller terminating this Escrow Agreement, including detailed instructions as to the remaining funds in the escrow, if any; or (ii) the Indemnity Escrow Agent’s delivery or release of all remaining Escrowed Funds pursuant to this Escrow Agreement. |
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|   | 11.7.1 | The recitals and schedules hereto consist an integral part hereof.  The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. |
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|   | 11.7.2 | The headings in this Agreement and their associated numbers are included for ease of reference only and shall have no legal, constructive or interpretive effect. |
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|   | 11.7.3 | The word “including” shall mean including without limitation. |
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|   | 11.7.4 | The word “person” shall mean any legal entity, including an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Body; |
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|   | 11.7.5 | 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 this Agreement. |
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|   | 11.7.7 | The Parties intend that each representation, warranty and covenant contained herein shall have independent significance.  If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant. |
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|   | 11.9.1 | Each of Seller and Purchaser will bear any taxes assessed or arising out of the transactions contemplated by this Agreement as imposed on such party under any law, including stamp tax, if applicable, and fees related to perfection of right under this Agreement. |
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|   | 11.11.1 | If, and solely to the extent that, any provision of this Agreement shall for any reason be held to be excessively broad, the term shall be construed in a manner to enable it to be enforced to the extent compatible with applicable law.  If, and solely to the extent that, any provision of this Agreement shall be invalid or unenforceable, or shall render this entire Agreement to be unenforceable or invalid, such offending provision shall be of no effect and shall not affect the validity of the remainder of this Agreement; provided, however, the Seller and the Purchaser shall use their respective reasonable efforts to renegotiate the offending provisions to best accomplish the original intentions of the parties, with no liability in connection therewith to be imposed on the Indemnity Escrow Agent. |
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|   | 11.11.2 | If the final judgment of a court of competent jurisdiction declares that any item or provision hereof is invalid or unenforceable, the parties hereto 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, or to delete specific words or phrases, and 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. |
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|   | Indemnity Escrow Agent: |
|--------|-------------------------|

|   | ADAD Trust Company Ltd.c/o Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.Azrieli 1Tel Aviv, IsraelFax: + 972-3-607-4499 |
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|   | Seller: |
|--------|---------|

|   | Optibase Ltd.7 Shenkar St.P.O. Box 2170Herzlia, 46120IsraelFax: +972-9-970-9222 |
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|   | With copy (which shall not constitute a notice) to: |
|--------|-----------------------------------------------------|

|   | Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.Attention: Adva Bitan, Adv.One Azrieli Center (Round Building)Tel Aviv 67021, IsraelFax: +972 (3) 607.4464 |
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|   | Purchaser: |
|--------|------------|

|   | Optibase Technologies Ltd.3 Daniel Frisch St.Tel Aviv, 64731, Israelc/o Afik TurgemanIsraelAttention: CEO |
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|   | With copy (which shall not constitute a notice) to: |
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|   | Afik Turgeman, attorneys at lawAttention: Doron Afik, Esq.3 Daniel Frisch St.Tel Aviv, 64731, IsraelFax: +972 (3) 609.0.609 |
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| ADAD Trust Company Ltd.By:      ______________Title:    ______________ |   | Optibase Ltd. By:       ______________Title:    ______________ |   | Optibase Technologies Ltd. By:       ______________Title:    ______________ |
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