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                                                                 EXHIBIT 10.12



LETTER "O"

[The document has illegible signature and ink stamps on every page for N. Base
Communications Ltd. and Mirobin, Ltd.]

                           UNPROTECTED LEASE AGREEMENT

                DRAWN UP AND SIGNED IN HAIFA ON DECEMBER 20, 1995

                                 BY AND BETWEEN

                  MIROBIN, LTD. PRIVATE COMPANY NO. 51-170019-7
                   YOKNEAM, INDUSTRIAL ZONE, MIROBIN BUILDING

                              HEREINAFTER, "LESSOR"
                           AS PARTY OF THE FIRST PART

                                       AND

                           N. BASE COMMUNICATIONS LTD.
                          PRIVATE COMPANY NO. 51-213490
                   YOKNEAM, INDUSTRIAL ZONE, MIROBIN BUILDING

                              HEREINAFTER, "LESSEE"
                           AS PARTY OF THE SECOND PART


PART A - DEFINITIONS

A. Premises: Possession rights and lease of space of approximately 1,814 m(2) on
the first floor of a building in Yokneam, Industrial Zone, Mirobin Building
(hereinafter, "Premises").

B. Lease Period: The Lessor leases the Premises to the Lessee from [crossed out:
1/16/96] 1/23/96 to 1/15/2003 (Clause 4).

C. Start Date of Lease: [crossed out: 1/16/96] 1/23/96.

D. Purpose of Lease: Hi-Tech plants.

The Lessee must use the Premises only for the objective indicated above, and for
no other objective whatsoever, without the advance written agreement of the
Lessor.

E.  Monthly Lease Fees: 33,740 New Shekels, linked as specified herein under:

F. Lease Fees for the Period: 2,834,160 New Shekels, linked as specified herein
under.



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   The annual Lease Fees shall be paid in six-month payments in the amount of
202,440 New Shekels. All sums are linked as specified herein under, and in
advance once every six months.

G. Linkage: Linkage to the Consumer Price Index as defined in Clause 6 of this
Agreement.

H. Payment for Requirement of Clause 20.2: $1,000 dollars linked per the
exchange rate for each late day of return of possession.

I. Load Permitted load weight on the floor of the Premises is 1,000 kg. per m(2)
subject to the terms of the second M Certificate of 8/20/95 presented and signed
by the Parties.

J. Electricity Connection Supplier of up to 300 amper (Clause 12.3) (subject to
the existing certification).

K. Linked Bank Bond, and the aforementioned linkage in the amount of [crossed
out: 100,000] $70,000 dollars (Clause 18.1).



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                                        2

WHEREAS the Lessor is the registered owner and/or person entitled to be
registered as ownership/lease right holder in block 11495 in lot [crossed out:
103/2] 11, office 2 (hereinafter, "the property");

WHEREAS the Lessor put an industrial structure on the property (hereinafter,
"the structure"), in which the Premises are included as defined in Clause 2 as
follows;

WHEREAS the Lessee declares that it shall operate a certified plant on the
Premises, and wishes to lease a certain part of the structure described herein
under from the Lessor under a lease unprotected according to the Tenant
Protection Act and regulations;

WHEREAS the Lessor wishes to lease to the Lessee so it can operate a certified
plant on the Premises, a certain part of the structure described herein under
through an unprotected lease;

WHEREAS the Parties wish to define their relationship, rights and mutual
obligations pursuant and specified herein under;

THEREFORE, THE PARTIES HEREBY STIPULATE AND AGREE AS FOLLOWS:

INTRODUCTION

1.1 The establishment and declarations herein constitute an integral part of the
terms of the Agreement itself, and they are to be considered as if they were
explicitly included therein.

1.2 The clause headings of this Agreement are for convenience purposes only, and
are not part of the Agreement.

1.3 All the appendices and supplements of this Agreement constitute an integral
part of the Agreement.

1.4 With the signing of this Agreement, all declarations and/or obligations
and/or any presentation of the Parties made by them prior to the signature of
this Agreement are fundamentally void.

2. Description of the Premises

2.1 A space of 1,814 m(2) on the first floor of the structure in the industrial
yards of Yokneam Elit (hereinafter, "the Premises"). An illustration of the
Premises marked in the red box shall be attached as Appendix A to this
Agreement.



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2.2 The Lessor promises to complete construction of the Premises within 2 months
from the date this Agreement is signed, pursuant to the Technical Specifications
to be attached as Appendix B to this Agreement.

3. USE OF THE PREMISES

3.1 According to this Agreement, during the Lease Period, the Premises shall be
used for the purpose of the objective specified in Part A, Clause 4.

       The Lessee promises not to use the Premises and/or any part thereof for
any other purpose, except for the aforementioned purpose, without advance
written certification of the Lessor.



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                                        3

3.2 If the Lessee ceases to make the payments of this Agreement for a period of
more than three consecutive months, the Lessor shall be permitted to consider
this action or omission as if the Lessee were waiving his rights pursuant to
this Agreement. The Lessee shall be required (if the Lessor requires same) to
vacate the Premises within three months of the written warning of the Lessor,
without the matter derogating from the rest of the payments that the Lessee is
obligated per this Agreement, and lease fees until the end of the Lease Period.

3.3 Without derogating from any other right held by the Lessor, the Lessee,
within three months as specified in the foregoing sub-clause (3.2) shall be
permitted to take possession of the Premises after notifying the Lessee in
writing about the date of possession.

3.4.1 In the event of lawful possession by the Lessor as specified herein, the
Lessee hereby grants irrevocable power of attorney to the Lessor to seize or
remove property, equipment and items of the Lessee, hereinafter, "the articles,"
in the presence of two witnesses who shall certify the list of items with their
signatures, and then to store them either at the Premises or elsewhere at the
expense of the Lessee, without the Lessor being held liable at all for those
items. Similarly, the Lessor shall not be liable for any damage done to the
Lessee as a result of this action.

3.4.2 For purposes of Clause 3.2 and Clause 3.4.1, the Lessee grants irrevocable
power of attorney to the Lessor to sell the items at his discretion, and to use
the proceeds to cover expenses involved in moving the items, storing them,
insuring and selling them, and for the payment of any amount owed by the Lessee
to the Lessor pursuant to this Agreement.

3.5 In order to remove any ambiguity, it is hereby declared that possession of
the articles of the Lessee at the Premises shall not derogate from the ability
of the Lessor to act pursuant to Clause 3 herein of the sub-Clauses therein.

4.  LEASING PERIOD

4.1 The Lease Period is for 7 years, starting from [printed: 1/16/96]
[handwritten: 1/23/96] (hereinafter, "Lease Start Date"), ending 1/15/2003 ["2"
replaces 15 in handwriting] (hereinafter, "Lease Termination Date") pursuant to
the conditions specified herein. The period from the Lease Start Date to the
Lease Termination Date shall be called hereinafter "Lease Period."

5.  SUITABILITY

5.1 Subject to the declaration of the Lessor that nothing is known about any
hidden defect, and the Lessee declares that it saw and physically and legally
examined the Premises. The Lessee agrees to accept the Premises in its current
state, and acceptance of possession of the Premises shall constitute
certification and/or agreement and/or



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acknowledgement by the Lessee that it has seen, checked and examined the
Premises, and found it in good and proper condition, suitable for use, complies
with his requirements, and corresponds to his goals, subject to undertaking
indicated in Clause 5.2.

5.2 Despite the stipulations in Clause 5.1, if on the day of transfer of
possession there is still additional work that needs to be completed, this shall
be recorded in the Transfer Minutes, and it shall not in any way cancel the
terms of the foregoing Clause 5.1.



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                                        4


6. LEASE FEES

6.1 The Lessee shall pay the Lessor the principal amount of the lease fees as
specified in Part A, Clause 5, 6. Linkage adjustments shall be added to the
principal amount as defined below:

       INDEX: Means the Consumer Price Index, including fruits and vegetables,
published by the Central Bureau of Statistics. If the index base changes, or its
calculation and evaluation method changes, or if it is published by another
entity, the Lessor shall make the calculation of the increase of the index for
the purposes of this Clause, taking into consideration the aforementioned
changes.

       BASE INDEX: The index published on 11/15/95.

       NEW INDEX: The last index published from time to time before the date of
payment made by the Lessee, as the Lessee was obligated to pay in this
Agreement.

       LINKAGE ADJUSTMENTS: The adjustment between the new index and the base
index, divided by the base index and multiplied by the principal of the Lease
Fees.

6.2 The principal of the Lease Fees plus the linkage adjustments shall be
referred to hereinafter as "Lease Fees."

6.3 Lease fees plus VAT that is applicable on the date of actual payment shall
be paid for each six-month period in advance [words "no later than" crossed out]
on the 16th of the months of January and July each year.

[next 4 lines crossed out]

6.4 In order to remove any ambiguity, it is hereby clarified that the Lessee
shall pay all the Lease Fees for the Lease Period whether or not the Lessee uses
the Premises.

6.5 The payment of the Lease Fees or any other payment required of the Lessee
pursuant to this agreement is to be made in full and on time, that is, a
fundamental condition of this Agreement. Non-payment of any payment in full and
on time shall constitute a fundamental breach of the Agreement by the Lessee,
and the Lessor shall acquire all relief granted the Lessor pursuant to this
Agreement and/or any law, including the right to demand vacating of the Premises
by the Lessee immediately upon overdue payment if the Lessee does not correct
this breach within 10 days of receiving a written warning about same.

6.6 Without derogating from the rights of the Lessor to demand the Premises be
vacated, and of any other relief, if the Lessee does not pay the Lessor the
Lease Fees and/or any other payment it is required to pay on time pursuant to
this Agreement, this sum shall carry arrears interest at a rate that is in
effect at that time at Israel Discount Bank, Ltd.



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regarding deviations from an authorized credit line (hereinafter, "Arrears
Interest"), plus linkage pursuant to the terms of this Agreement.

6.8 In order to facilitate collection, the Lessee shall sign an authorization
form for the bank according to the format attached hereto (hereinafter,
"Authorization Form"). All amounts appearing in this Clause shall be paid using
an Authorization Form through a debit to the bank account of the Lessee. As long
as the Lessee does not vacate the Premises, the Lessee may not change or cancel
the Authorization Form without written approval from the Lessor.

6.9 Without derogating from the terms of the aforementioned sub-Clause 6.8 or
the Authorization Form, the Lessee shall submit 14 promissory notes to the
Lessor signed by the Lessee and guarantors approved by the Lessor. The sums of
the promissory notes, and their due dates shall be the same as those of the
Lease Fees plus VAT. Delivery of the promissory notes shall not constitute
payment of the principal amounts of the Lease Fees. Only with full payment of
the Lease Fees pursuant to this Agreement shall the appropriate promissory notes
constitute payment. The Lessee releases the Lessor from debts [illegible] in the
promissory note.



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                                        5

6.10 The Lessor promises to make use of the promissory notes only if no payment
is made by the Lessee pursuant to the Authorization Form. The Lessee hereby
grants the Lessor irrevocable power of attorney to make use of the promissory
notes in the aforementioned event(s). After making the payments guaranteed by
the promissory notes, pursuant to this Agreement, the Lessor shall return to the
Lessee those promissory notes that were paid together with the linkage
adjustments.

6.11 Powers of Attorney granted by the Lessee to the Lessor as specified above
are irrevocable and may not be changed insofar as the rights of the Lessor are
related thereto.

6.12 In addition to the Lease Fees, the Lessee shall pay VAT at a rate
established by law on the day of payment.

6.13 Similarly, the Lessee shall pay the linkage adjustments for each payment
within 3 days from the payment date if the bank did not do this per the
Authorization Form.

7. TAXES, REQUIRED PAYMENTS AND EXPENSES

7.1 The Lessor shall pay property tax for the Premises, as well as any
government tax required to be paid and/or to be required to be paid by the
property owners.

7.2 The Lessee shall be liable for, and shall make, the following payments for
the Premises insofar as they pertain to the period from the beginning of the
Lease Period to the end of the Lease Period, and/or until the date on which this
Agreement is considered to have terminated, whichever date is later.

       7.2.1 All taxes, fees and obligatory payments required of possessors of
property pursuant to law, including municipals fees to be paid to the Yokneam
local council.

       7.2.2 All joint expenses, including, and without derogating from the
foregoing, water, electricity and gas use fees, as well as telephone usage and
maintenance charges.

       7.2.3 Cleaning and maintenance expenses for the joint property at the
structure pursuant to the relationship between the Premises and the space of the
structure.

       7.2.4 The pro-rata part of the joint building maintenance expenses, the
importance of which is accepted by the Parties, such as asphalting and
plastering, etc., and expenses of a special nature, shall be arranged in advance
in writing.

       7.2.5 If a joint property maintenance company is established, the Lessee
shall be responsible for his share of any sum that the maintenance company
possessing and/or that shall possess the joint property of the structures (and
that shall be appointed by the Lessor). [sic - the sentence appears to be
missing a verb].



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7.3 In the event penalties are imposed on the Lessor by virtue of the actions
and/or omission of the Lessee, the Lessee shall be required to indemnify the
Lessor forthwith for same, plus the legal costs of the Lessor.

7.4 In the event that the Lessee does not make a required payment pursuant to
this Agreement, the Lessor shall be permitted, though not required, to make the
payment on his behalf, and the Lessee shall be required to repay that sum to the
Lessor as soon as it receives the receipt, except for the expenses that are
linked per the terms of this Agreement, plus arrears interest as specified
herein.



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                                        6

8. INSURANCE

8.1 At its own expense, the Lessee promises to insure the Premises with
comprehensive insurance (including third-party insurance, against all risks,
including fire, explosion, earthquake, terrorism, acts of war, etc. in a real
sum of the Premises, when the beneficiary is the Lessor. The insurance shall
include the Lessor Beneficiary. The Lessee must accurately comply with all the
terms of the policy). [sic] The Lessor has the right to take out various
insurance policies for the Premises in his favor, as long as this does not
derogate from the obligation of the Lessee to insure the Premises and its
contents.

8.2 The policy shall cover all risks in the regular industrial structure, as
well as all additional special risks originating from the production process and
storage of substances as effectuated on the Premises by the Lessee.

8.3 Without derogating from the foregoing, the policy shall cover the following
risks: fire, lightening, explosion, aircraft impact, supersonic boom,
disturbances, strikes, intentional damage, break-in, earthquake, flood, storm,
hurricane, water damage, and electric shorts and overheating.

8.4 The beneficiary and/or policy beneficiary shall be the Lessor.

8.5 The Lessee promises to submit a copy of the insurance policy to the Lessor
until one-month prior to its entry into the Premises.

8.6 In the event the Lessee does not make the aforementioned insurance payments,
the Lessor shall have the right, though not the obligation, to make the
aforementioned insurance payments at the expense of the Lessee. The Lessee must
return them to the Lessor immediately upon presentation of the payment receipts.

8.7 The Lessee shall have the right to insure himself with additional insurance
for which the Lessee is the insurance policy beneficiary.

9. TRANSFER OF THE PREMISES AND/OR LEASE BY THE LESSOR

The Lessor shall have the right to transfer the Premises, including rights of
the Lessor pursuant to this Agreement, in full or in part, to any person and/or
entity, without having to obtain the agreement of the Lessee, and under the
conditions that the rights of the Lessee are not infringed upon pursuant to this
Agreement.

The Lessee promises to sign any document it requires, if it requires same,
pertaining to transferring to a third-party the rights of the Lessor to the
Premises.



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10. OBLIGATIONS OF THE LESSEE

The Lessee promises:

10.1 Not to transfer possession and/or use of the Premises or part thereof,
and/or not to lease the Premises or part thereof under a sub-lease or other
lease, assign and/or mortgage and/or in any other manner transfer his right to
the Premises or part thereof, unless it receives an advance written approval
from the Lessor.

10.2 To keep the Premises in good condition, keep the Premises and surroundings
in clean condition, including, and without derogating the foregoing, and to
arrange the removal of industrial and/or other waste from the Premises and
surroundings.

10.3 To permit the Lessor or its proxy to enter the Premises at any acceptable
time through advance arrangement in order to examine the conditions of the
Premises and/or to show the Premises to other persons or purchasers and/or to
carry out repairs on the Premises.



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                                        7

In order to remove all ambiguity, it is hereby clarified that the Lessor is not
required to perform any repairs whatsoever or any other work in the Premises.

10.4 To carry out and fulfill all terms, laws and supporting legislation,
regulations, decrees and municipal building plans of any authorized agency that
are applicable upon the Premises and/or pertaining to use of the Premises.

10.5 To use the Premises in a way that does not cause disturbance and/or
discomfort to neighbors, including the Lessee promising not to cause loud noise,
smells and shocks that may disturb neighboring plants.

       Any time the terms of this sub-Clause are breached, in addition to any
other right held by the Lessor pursuant to this Agreement, and/or pursuant to
the provisions of law, the Lessor shall have the right to undertake any
examination and/or measurement and./or repair and/or any other action that the
Lessor deems necessary to restore the conditions to their previous state and/or
to remove the disturbance. All expenses caused thereby to the Lessor shall be
applied to, and paid by, the Lessee immediately and/or to whom the Lessor shall
direct.

       The Lessee hereby promises to repay the Lessor any sum the Lessor may
have expended pursuant to this Clause, plus arrears interest from the date the
sums are expended until their repayment by the Lessee. Receipts of the Lessor
pertaining to the amount of these payments and other expenses specified herein
shall constitute conclusive evidence, and the Lessee promises to pay them
immediately at first request.

10.6 Not to hang and/or stand any signs or marks on parts of the Lessor, or on
any other part of the structure and/or roof without the written agreement of the
Lessor, who shall be permitted to determine the size of signs and the space
assigned to them.

The Lessor shall be permitted to remove any sign at the expense of the Lessee
that is installed by the Lessee in violation of the terms of this Clause.

The Lessee declares hereby that it does not oppose the setting up of signs on
the roof of the structure by the Lessor and/or by any third-party with the
permission of the Lessor. Similarly, the Lessor is permitted to attach to the
walls of the structure signs including the name and logo of the Lessor, as well
as other information pertaining to the Lessor.

10.7 The Lessee shall not place equipment on the Premises that may cause damage
to the Premises, and shall not load on the floor of the Premises more than its
load intended and specified in Clause I of the definitions.

10.8 The Lessee shall not be permitted to make any use of the sidewalks, streets
and any public space outside the Premises except for an objective for which
these public spaces are intended.



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11. OBTAINING PERMITS

11.1 The Lessee shall make sure to obtain all required permits pursuant to law
for the management of its business.

11.2 The Lessee hereby declares that it is aware that the Lessor shall not be
held liable at all for obtaining any permits whatsoever required for managing
the business of the Lessee.

11.3 If for any reason whatsoever the Lessee did not obtain a permit to manage
his business, this does not exempt the Lessee from payment of Lease Fees until
the termination of the Lease pursuant to this Agreement.

12. ELECTRICITY AND WATER

12.1 The Lessee hereby certifies that the supply of electricity and/or water to
the Premises is conditional upon an arrangement between itself and the electric
company and local authority, as the case may be.



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                                        8

12.2 The Lessee declares that non-provision of electricity and/or water to the
Premises does not derogate from his liability pursuant to this Agreement if the
reason for same is not dependent on the Lessor.

12.3 The Lessor declares that he will connect tri-phase electricity per the
power indicated in Clause 10. The Lessee shall not have the right to contact the
Israel Electric Company and request an increase in the electric power to the
Premises unless the Lessee received written approval of the Lessor. The Lessor
shall provide his written approval subject to considering consumption of the
Lessee, and all other lessees in the building where the Lessee is located.

12.4 The Parties shall check and record the condition of the Premises and water
and electricity meters on the dates the Lessee enters and departs the Premises.

MAINTENANCE OF THE PREMISES AND REPAIRS

13.1 The Parties agree that the Lessor shall be responsible, at its own expense,
for repairing only damage caused to the outside walls and roof of the structure,
except for damage to plaster and paint.

13.2 The Lessee shall be responsible, at its own expense, for the repair and
maintenance of the other parts of the structure not mentioned in the
aforementioned Sub-Clause 13.1, including joint property as defined in Clause 15
hereinafter, including appliances, electrical, water and plumbing systems,
sanitary facilities, fences and gates. The Lessee shall also be responsible, at
its own expense, for repairs to the Premises that are not the result of
reasonable wear and tear. Wear and tear caused by the use of the Premises by the
Lessee shall not constitute reasonable wear and tear, and the Lessee shall be
obligated to repair any damage caused to the Premises as a result therefrom. In
any case, the Lessee shall repair any damage caused to the Premises when the
value of such damage does not exceed $100 dollars for the said repair.

13.3 Within a reasonable period, the Lessor shall repair those parts of the
Premises that the Lessor is required to maintain, and subject to the foregoing
sub-Clauses 13.1 and 13.2, unless the cause of damage to those parts of the
Premises originates from reasonable wear and tear, subject to the terms of
sub-Clause 13.4.

13.4 The Lessee shall notify the Lessor about any damage caused to parts of the
Premises, as specified in the foregoing sub-Clause 13.1 within a reasonable
time, and no later than 48 hours from when they are discovered. If the Lessee
does not notify the Lessor as stated, the Lessee shall bear all additional
expenses incurred by the Lessor pursuant to non-notification to the Lessor by
the deadline. In addition to the foregoing, the Lessee promises to notify the
Company within 48 hours of any damage caused to the Premises, or any part
thereof, which is not specified in the foregoing sub-Clause 13.1,



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whether such damage is caused by the Lessee or by any other factor (hereinafter,
"the event"). If the Lessee does not report the event within the required
one-month, the obligation for repairing damage to parts of the Premises
indicated in the foregoing sub-Clause 13.1 shall be borne by the Lessee.

13.5 The Lessee promises to use the Premises in a cautious and correct manner,
and to prevent any degradation or damage thereto. Any time any damage or
degradation is caused to the Premises, or any part related thereto by the Lessee
and/or the employees and/or guests and/or anyone else entering the Premises with
permission of the Lessee to undertake repairs, the Lessee promises to
immediately repair such damage or degradation at its own expense. In the event
the Lessee does not fulfill the terms of this Clause, the Lessor shall have the
right, but without affecting his right to any other remedy or relief, to demand
from the Lessee either during or after the Lease Period the cost or assessed
cost of the repairs, or the assessed expenses for repairing any damage. This
applies even before the Lessor effectuates the repairs or repairs the damage.



<PAGE>   17

                                        9

14. ALTERATIONS TO THE PREMISES

14.1 The Lessee promises not to alter the Premises in any way whatsoever, and
not to add anything thereto or derogate therefrom without receiving advance
written permission from the Lessor.

14.2 Any addition, alteration or improvement made to the Premises, and
improvements and alterations to the walls and/or ceilings and/or floor of the
Premises, and to any other part of the Premises, shall constitute a part of the
Premises, and shall belong to the Lessor. The Lessee shall be required to leave
them in the Premises at the end of the Lease Period, and may not require the
Lessor to participate for same. In any case, all the foregoing shall not
constitute key money payment.

14.3 Notwithstanding the terms of sub-Clause 14.2, at any time before the end of
the Lease Period, the Lessor shall have the right to require the Lessee to
remove and/or clear away the alterations and/or additions and/or improvements
from the Premises or part thereof. In such case, the Lessee shall be required to
do so at its own expense, and to restore the condition of the Premises to its
former condition as it was on the first day of the Lease. If the Lessee refuses
to do so, the Lessor shall have the right to do it at the expense of the Lessee.
If the Lessee does not pay the Lessor for performing these activities within 7
days from when it receives the written request, then the Lessor shall be
permitted to sue for payment, plus arrears interest.

14.4 The Lessee shall pay the Lessor Lease Fees pursuant to this Agreement, even
if the Lease Period shall have expired for the time required to restore the
condition of the Premises to their former condition.


15. JOINT BATHROOM FACILITIES

15.1 The Lessee is permitted to use the bathroom facilities and other joint
installations, if such exist, (hereinafter, "joint property") in the Building.

15.2 Together with the other lessees in the Building, the Lessee shall be liable
for cleaning and maintenance costs of the joint property of the Building,
including the air-raid shelter, garden, lighting, water supply, plumbing and
drainage.

15.3 The Lessee shall bear the costs pursuant to the foregoing sub-Clause 15.2
based on the ratio between the space of the leased Premises and the total space
of all units in the Building.

15.4 The Lessor shall have the right, according to its exclusive discretion, to
carry out the activities under Clause 15 and its sub-Clauses, or part thereof,
by itself or through



<PAGE>   18

another party, so long as the Lessor notifies the Lessee in writing of its
intentions 30 days in advance.

15.5 If the Lessor notified the Lessee of its intention to provide services as
stated in sub-Clause 15.4, the Lessee shall pay the Lessor any amount paid by
the Lessor for supply of such services, subject to the division indicated in
this Clause.

15.6 All rules applying to any amount owed by the Lessee pursuant to this Clause
shall be considered under the same rules as Lease Fees in every way.



<PAGE>   19

                                       10

16. LIABILITY TOWARD THIRD PARTIES

16.1 The Lessee is liable toward any third-party for any damage of any type or
kind whatsoever, for whatever reason whatsoever, and indicated hereinafter,
without there being a closed list - damage caused to any person and/or property
whatsoever, including, but not derogating from the foregoing, visitors at the
Premises, employees of the Lessee, and any person found within the boundaries of
the Premises, originating from the condition of the Premises, and/or equipment
installed therein, and/or work, business, activity or omission that may occur
there, and/or from the conduct of the Lessee and/or its employees, and/or
clients and/or suppliers and/or service provider found within the boundaries of
the Premises or the nearby environment, in the service and/or with the
permission of the Lessee, whether or not such person is at the Premises with
permission, and whether or not incidentally or otherwise.

16.2 Without derogating from the terms of the foregoing sub-Clause 16.1, the
Lessee promises to take all steps to cancel any demand and/or suit against the
Lessor for any damage as stated in the foregoing sub-Clause 16.1, and to
indemnify the Lessor immediately upon first request of the Lessor in the amount
of any funds that the Lessor is forced to pay under a demand and/or suit, and
for any other expenses appertaining thereto.

17. NON-APPLICABILITY OF PROTECTED TENANT LAWS

17.1 The Parties state that they are aware that pursuant to the Protected Tenant
Act (combined version), 1972 (hereinafter, "the Law"), the Lessee shall not be
protected pursuant to the Law and/or any other rule, with all regulations and/or
its entirety. The protection of the Law shall not apply to this Lease.

17.2 The Lessee hereby explicitly declares that it did not pay and/or give any
key money for the Premises and/or appertaining thereto. Therefore the protection
of the Law shall not apply to the Premises and/or for the Premises, and/or in
relation to the Lease between the Parties, and, inter alias, pursuant to the
terms of the Law.

18. BANK GUARANTY

18.1 In order to guarantee all of the obligations of the Lessee pursuant to this
Agreement including, and without derogating from the rest of the obligations of
the Lessee, that the Premises are vacated by the Lessee on time; that all damage
caused to the Premises is paid for; and that Lease Fees and other payments
incumbent on the Lessee pursuant to this Agreement are paid. The Lessee shall
deposit a bank bond for a period of up to 120 days after the end of the Lease
Period with Attorney Matari, hereinafter, "the Trustee," for purposes of this
deposit at the time this Agreement is signed.



<PAGE>   20

18.2 The Trustee shall deliver the said bank bond to the Lessor if the Lessee
does not fulfill any obligation pursuant to this Agreement, including if the
Lessee does not vacate the Premises on time, and/or does not make any payment of
Lease Fees and payments incumbent upon the Lessee pursuant to this Agreement, as
well as if the Lessee does not pay for the damage caused to the Premises.

18.3 The Lessee promises to present the signature of its managers on the bank
bond, as specified in Clause 28 herein.

19. REMEDIES

19.1 Without derogating from the obligations of the Lessee pursuant to this
Agreement, and with the right of the Lessor to obtain relief and/or other
remedy, subject to the choice of the Lessor to cancel it, this Agreement shall
be considered cancelled, shall be terminated immediately, the right of the
Lessee to retain the Premises shall terminate and the Lessor shall have the
right to demand that the Premises be immediately vacated by the Lessee in the
following cases:



<PAGE>   21

                                       11


       19.1.1 If the Lessee violates or does not fulfill any term or obligation
included herein.

       19.1.2 If the Lessee is declared to be bankrupt and/or a Receiver is
appointed over its assets, or if a Liquidator is appointed over the Lessee.

       19.1.3 If shareholders transferred control of their shares in the Company
of the Lessee without receiving advance written approval from the Lessor for the
foregoing transfer. After appropriate advance written contact, the Lessor may
not oppose such transfer if it is reasonable to know the Trustee, and is not
negatively affected by securities and obligations of the Lessee, as long as the
guarantors continue to be guarantors for the obligations of the Lessee and the
guaranties are not replaced to the satisfaction of the Lessor.

19.2 The Lessee promises to pay the Lessor Lease Fees for the entire period
indicated in this Agreement in the event the Lessee vacates the Premises before
the end of the said Period following a violation of a term or obligation
included in the Agreement.

19.3 Any Party violating this Agreement shall be required to indemnify the other
Party for any damage of any type and kind whatsoever that may be caused to the
other Party following this violation, and without derogating from the rights of
the Parties to any other relief according to law and/or to this Agreement.

19.4 The Lessor declares that it is aware that, only on the basis of this Lease
Agreement that is executed with a lessee [sic] that is an approved plant, does
the Lessor [sic] have the status of an approved plant. The Lessee promises to
indemnify the Lessor for any damage caused to the Lessor if for any reason
whatsoever the Lessee refrains from fulfilling the Agreement and/or takes any
action to cancel or prevent the status of the Lessor as an approved plant.

19.5 Without derogating from the right of any Party to cancel the Agreement
and/or to seek relief and/or other remedy from this power and/or from any law,
if the Lessee violates a fundamental provision of this Agreement, and does not
correct it within 7 days from the day of the event, then the Lessee shall be
liable to indemnify the Lessor for the amount in New Shekels equal to $50,000
dollars per the exchange rate of the dollar at the time of the actual payment.

20. VACATING THE PREMISES

20.1 The Lessee promises to vacate the Premises at the end of the Lease Period,
or if the Lessee violates this Agreement, and the Lessor shall require that the
Premises be vacated even before the end of the Lease Period, whichever date is
earlier, to return the Premises to the Lessor free of any person or object, in
good and proper condition, and able to be



<PAGE>   22

used the same way it was when the Lessee received it, except for wear and tear
arising from regular and reasonable use.

20.2 If the Lessee does not vacate the Premises in a manner and on the date
required pursuant to the terms of this Agreement, or upon lawful cancellation by
the Lessor, then without derogating from any other right held by the Lessor
pursuant to law and/or this Agreement, the Lessee shall be required to pay the
Lessor a sum in New Shekels equal to $1,000 dollars according to the exchange
rate of the U.S. dollar published by the Bank of Israel on the day of actual
payment for each delayed day or arrears in transferring possession of the
Premises to the Lessor; this shall be the same as indemnification fees that are
determined and agreed upon in advance. Payment of the amount pursuant to this
Clause shall not grant the Lessee any right to continue to possess the Premises.

21. CANCELLATION OF THE AGREEMENT

21.1 The Parties agree that this Agreement shall be considered null and void if
one of the following situations occurs:

       a. If a decree of receipt of property is issued against the Lessee.

       b. If a court ruling to liquidate the Lessee is issued.

       c. If a Receiver is appointed over the property of the Lessee or over a
portion of its property.



<PAGE>   23

                                       12

The cancellation shall be valid from the date the request is submitted against
the Lessee until the date a decree of receipt of the property or request for
liquidation or execution of distraint, and/or appointment of a Receiver, and on
the condition that the aforementioned request was not cancelled within 45 days
from the date the request letter is received from the Company.

21.2 In addition to any relief to which the Lessor has the right to demand
pursuant to this Agreement, and/or pursuant to law, without derogating from the
totality of the foregoing, the Lessor shall have the right to bring about the
immediate cancellation of this Agreement in the following cases:

       a. Non-delivery of promissory notes as specified in the aforementioned
Clause 6.9.

       b. Non-delivery of the Authorization Form or its cancellation, as
specified in the aforementioned Clause 6.8.

       c. Non-use of the Premises as specified in the aforementioned in Clause
3.

       d. Transfer of the rights of the Lessee to the Premises to another person
in opposition to the terms of the aforementioned Clause 10.1.

       e. Delay in payment of any amount owed by the Lessee to the Company
within 7 days from the payment date.

       f. Creation of a disturbance that may disturb the neighboring plants of
the Premises.

       g. Any action in opposition to the terms of the aforementioned Clause of
this Agreement.

21.3 If the Lessor notified the Lessee of the cancellation of the Agreement, the
Lessee shall contact the Lessor within 15 days of the date the Lessee receives
the notification.

21.4 No provisions of this Clause derogate from the rights of the Lessor
pursuant to this Agreement or to law.

22. LEGAL FEES AND MISCELLANEOUS

22.1 It is stipulated and agreed between the Parties that in the event that the
Lessee does not vacate the Premises at the end of the Lease Period, or after
notification of the cancellation of the Lease is sent pursuant to the terms of
Clause 21 of this Agreement, then in addition to all relief established in this
Agreement and law, the Lessee shall bear all expenses incurred by the Lessor in
all matters pertaining to legal proceedings against the Lessee in relation to
any discussion or lawsuit or action in execution office. This includes
attorney's fees of the Lessor (hereinafter, "legal fees").

In order to remove all ambiguity, the Lessee shall be required to repay the
Lessor for all reasonable expenses caused to the Lessor for filing a lawsuit
and/or execution procedures, even if these expenses were not approved for
payment by the court or the execution, for any reason whatsoever. The expenses
specified in this sub-Clause shall be



<PAGE>   24

included within the context of the legal fees of the Lessor, and the terms of
Clauses 22.2 and 22.3 shall apply thereto.

22.2 The Lessee shall pay the Lessor for the legal fees immediately after the
Lessor sends a written request; this shall include arrears interest from the
date the request letter is sent until actual payment.

22.3 The Parties agree that the documents of the Lessor shall serve as final and
conclusive evidence about the extent of the legal fees.

23. GUARANTY AND OBLIGATION

The Lessee promises that in order to carry out its obligations pursuant to this
Agreement. the Lessee shall have a Guaranty and Commitment Note signed by
guarantors who shall be approved by the Lessor, in the format specified in
Clause 28.

24. NON-WRITE-OFF OF PAYMENTS

The Parties agree that the sums for which they are liable and/or shall be liable
to each other under this Agreement, or any other purpose, shall not be written
off.



<PAGE>   25

                                       13

25. FUNDAMENTAL CLAUSES

It is agreed that the following clauses of the Agreement shall be considered as
fundamental and principal clauses, and a breach of any one of them: 3, 4, 5, 6,
7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24 -- shall
constitute a fundamental violation of this Agreement as this concept is
understood in the Contract Act (Contract Violation Remedy), 1970.

26. MISCELLANEOUS

26.1 The terms of the Contract Act (Contract Violation Remedy), 1970 shall apply
to this Agreement to the extent they complete what is specified in this
Agreement.

26.2 No waiver, extension or assumption or restraint from any action, either in
general or on time, by the Lessor or Lessee shall constitute a waiver of rights
of the Lessor or Lessee pursuant to this Agreement.

26.3 Any alteration in the terms of this Agreement shall be valid only if
drafted in writing and signed by both Parties.

26.4 The Parties declare that they have read this Agreement in detail, and
signed it of their own free will, after they understood its contents.

26.5 The Lessee shall bear the fee stamp expenses for this Agreement in the
amount of 11,337 New Shekels, and shall participate in a portion of the legal
fees of the Lessor for drafting this Agreement in the amount of [5,000 crossed
out] [handwritten: 2,000] New Shekels plus VAT.

26.6 The Parties agree that the authorized court in the district of Haifa is
chosen as the exclusive jurisdiction for all matters arising from this
Agreement.

27. NOTIFICATION

The addresses of the Parties for purposes of this Agreement are as specified in
the Introduction of this Agreement. Any notification sent by registered mail
with return receipt requested sent by one Party to the other shall be considered
to have been delivered at the end of 72 hours from the time it was sent, and if
hand-delivered, at the time of its delivery.

The addresses of the Parties as specified herein shall also constitute their
addresses for purposes of delivery of court documents.

IN WITNESS WHEREOF,
[illegible signature]                       [illegible signature]
Mirobin Ltd.                                N. Base Communications Ltd.


<PAGE>   26

                                            Private Company 51-213490-9



<PAGE>   27

                                       14

                                  GUARANTY NOTE

28. PERSONAL GUARANTY

We the undersigned:

1.                    ID No.                From:

2.                    ID No.                From:

(hereinafter, "Lessee Managers")

We jointly and severally guaranty the performance of all obligations of the
Lessee pursuant to this Agreement.



<PAGE>   28

                                       15

                        Agreement Supplement from (Date):


Mirobin Ltd. (hereinafter, "the Lessor") agrees that despite the foregoing
stated in Part A, Clause 2 of the Lease Agreement of 12/20/95, the Lessee N.
Base Communications Ltd. is permitted to shorten the Lease Period with one-year
advance written notice regarding its wish to shorten the Lease Period to 1/25/99
["25" overwrites "15"] on the condition that they present to the Lessor an
alternative tenant [in handwriting: who is also an approved plant] at least
under these same Agreement terms [handwritten: and for a period of at least 4
years].

In witness whereof,

IN WITNESS WHEREOF,
[illegible signature]                              [illegible signature]
Mirobin Ltd.                                       N. Base Communications Ltd.






k-5/mirobin1