Document:

Unassociated Document

    

      Tadiran
        Scopus Ltd.

       

      
        	
                To:

              	
                Yossi
                  Ben Shalom I.D ____________________ (the
                  “Holder”) 

              
	 	
                From
                  ________________________________

              
	 	 	 	 

      

      

       

      Date:
        December 27, 2000 (“Allocation
        Date”)

       

      Option
        Certificate

      (the
        “Option Certificate”)

       

      to
        Purchase Class A Ordinary Shares of

       

      Tadiran
        Scopus Ltd.

       

      Registration
        Number 51-188910-7

       

      for
        such
        consideration and under the terms as are detailed below

       

      VOID
        AFTER 17:00 p.m. (prevailing Tel Aviv time)

      On
        the
        last day of the Exercise Period (as defined
        below)

       

      
        This
          is
          to certify that the Holder, being a director of the Company at the date
          hereof,
          is entitled to purchase from Tadiran Scopus Ltd. (the “Company”),
          during the Exercise Period (as defined below), a total of 515,034 Class
          A
          Ordinary Shares of the Company, par value of each NIS 0.50 (the “Total
          Option Amount” or
          the
“Options” for
          any
          part thereof), in consideration for the payment to the Company of one US
          Dollar
          (US$ 1.00) per Option Share (the “Exercise
          Price”), for
          an
          aggregate amount of up to US$ 515,034, in consideration for the issuance
          of the
          Company’s Class A Ordinary Shares, all subject to the terms and conditions set
          forth below (the “Option”).

         

        
          	1.	
                  PREAMBLE

                

        

         

        On
          December __th, 2000, the Board of Directors of the Company (“the
          Board”) resolved
          that the Company will issue to the Holder, at no charge, the Option, subject
          to
          the terms and conditions of this Option Certificate.

         

        
          	 	
                  1.1.

                	
                  This
                    Option Certificate is made pursuant to the provisions of Section
                    102 of
                    the Israeli Income Tax Ordinance (New Version) 1961 (“the
                    Income Tax Ordinance”) and
                    any regulations, rules, orders of procedures promulgated thereunder
                    or any
                    successor section, regulation, rule order of procedure thereof
                    (Section
                    102, as specified above and the regulations, rules, orders of
                    procedures
                    promulgated thereunder or any successor section, regulation,
                    rule order of
                    procedure thereof shall be referred herein collectively as: “Section
                    102”).
                    The Options will be allocated subject to any pre-approval of
                    this Option
                    Certificate, if required by the Income Tax Authorities in accordance
                    with
                    Section 102.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	 	
                  1.2.

                	
                  In
                    the event that the recommendations of the Ben Bassat Committee
                    receive a
                    binding legal status after this Option Certificate is in force
                    (the
                    “New
                    Law”),
                    the Company shall have full right to turn to the Tax Authority,
                    or any
                    other governmental authority or body, and to request that this
                    Option
                    Certificate shall be adapted to the New Law (the “Request”).
                    If the Request is approved then this Option Certificate, shall
                    be
                    interpreted as to be fully adapted to the New Law and the Company
                    may make
                    any changes in this Option Certificate to fulfill full adaptation
                    to the
                    New Law. By signing this Option Certificate, the Holder shall
                    be deemed
                    and be declared as granting his full and irrevocable consent
                    to the right
                    of the Company as aforementioned.

                

        

         

        
          	2.	
                  ADMINISTRATION
                    OF THE OPTION CERTIFICATE

                

        

         

        
          	 	
                  2.1.

                	
                  The
                    Board or the Company’s Compensation Committee (“the
                    Committee”),
                    shall have the power to administer this Option Certificate.
                    Notwithstanding the above, the Board shall have the power and
                    authority to
                    take any act the Committee is empowered and authorized to take
                    or which
                    the Committee is precluded from taking by reason of law or
                    otherwise.

                

        

         

        
          	 	
                  2.2.

                	
                  The
                    Committee, shall consist of such number of members as may be
                    fixed by the
                    Board (but not less than two (2) in
                    number).

                

        

         

        
          	 	
                  2.3.

                	
                  The
                    Holder shall not be nominated as a member of the Committee, nor
                    shall he
                    participate in any Board meeting that refers to the Option
                    Certificate.

                

        

         

        
          	 	
                  2.4.

                	
                  Subject
                    to this Option Certificate, any applicable law, the Company’s Articles of
                    Association and any other binding commitment taken by the Company,
                    the
                    Committee shall have full power and authority to administer the
                    Option
                    Certificate. Such power and authority shall include, but not
                    be limited
                    to: (i) the acceleration of any Holder’s right to exercise, in whole or in
                    part, any previously granted Options; (ii) the interpretation
                    of the
                    provisions, and the supervision over the administration of this
                    Option
                    Certificate; and (iv) the determination of any other matter which
                    is
                    necessary or desirable for, or incidental to, the administration
                    of this
                    Option Certificate.

                

        

         

        
          	 	
                  2.5.

                	
                  All
                    decisions and selections made by the Board or the Committee pursuant
                    to
                    the provisions of this Option Certificate shall be made by a
                    majority of
                    its members. Any decision reduced to writing and signed by all
                    the
                    members, who are authorized to participate in such decision,
                    shall be
                    fully effective as if it had been made by a majority at a meeting
                    duly
                    held.

                

        

         

        
          	 	
                  2.6.

                	
                  The
                    interpretation and construction by the Committee of any provision
                    of this
                    Option Certificate shall
                    be
                    final and conclusive unless otherwise determined by the Board.
                    

                

        

         

        
          	 	
                  2.7.

                	
                  No
                    member of the Board or of the Committee shall be held liable
                    for any act
                    or determination made in good faith with respect to this Option
                    Certificate.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          	3.	
                  SHARES
                    RESERVED FOR THIS OPTION
                    CERTIFICATE

                

        

         

        Subject
          to adjustments, as set forth in Section 8 below, a total of 515,034 Ordinary
          A
          Shares, of 0.5 NIS par value of the Company’s authorized share capital shall be
          subject to this Option Certificate (“Reserved
          Shares”).
          The
          Reserved Shares may be issued only in accordance with the terms hereof.
          Any such
          Reserved Shares, which remain unissued and which are not subject to this
          Option
          Certificate any more, may cease to be reserved for the purpose of this
          Option
          Certificate, at the Board’s decision, but until termination of the Option
          Certificate the Company shall at all times reserve sufficient number of
          Reserved
          Shares to meet the requirements of this Option Certificate.

         

        
          	4.	
                  TRUSTEE

                

        

         

        
          	 	
                  4.1.

                	
                  This
                    Option Certificate, the Total Option Amount and/or any shares
                    (as defined
                    below) issued upon exercise of such Options and/or other shares
                    received
                    as a result of any realization of rights pursuant to this Option
                    Certificate, shall be issued to the Trust Company of Mizrahi
                    Bank Ltd. who
                    is (or shall be approved as) a trustee in accordance with the
                    provisions
                    of Section 102 (the “Trustee”),
                    and
                    held for the benefit of the Holder for a period of not less than
                    the
                    period required by Section 102 (24 months, as of today) starting
                    from the
                    Allocation Date. In addition, the Trustee shall not release any
                    shares
                    held by it in accordance with the terms of this Option Certificate,
                    until
                    the earlier of the following events: (i) The initial public offering
                    of
                    the Company’s shares; (ii) Another date, as determined by the Committee;
                    (iii) In the event that the
                    Holder wishes to sell the shares held for his benefit by the
                    Trustee,
                    according to a bona fide transaction (as determined by the Committee).
                    The
                    shares subject to such transaction shall be released upon its
                    consummation. Notwithstanding anything to the contrary, the Trustee
                    shall
                    not release any Options which were not yet converted into Shares,
                    or
                    release any Shares issued upon exercise of Options, prior to
                    the full
                    payment of the Holder’s tax liabilities arising from Options which were
                    granted to him, and/or any Shares issued upon exercise of such
                    Options.

                

        

         

        
          	 	
                  4.2.

                	
                  Any
                    voting rights attached to any shares issued upon the exercise
                    of any
                    Options granted under the Option Certificate and held by the
                    Trustee for
                    the benefit of the Holder shall
                    be
                    exercised in accordance
                    to Section
                    9 to this Option Certificate.

                

        

         

        
          	5.	
                  EXERCISE
                    PERIOD

                

        

         

        
          	 	
                  5.1.

                	
                  Notwithstanding
                    anything to the contrary in this Option Certificate, all Options
                    shall
                    expire six (6) years from the date the Company issued this Option
                    Certificate (the “Expiration
                    Date”).
                    All Options that were not exercised by the Expiration Date shall
                    expire
                    immediately and the Holder shall not have any claim towards the
                    Company.
                    Nothing in this provision shall prejudice the shortening of the
                    Exercise
                    Period by virtue of any term to this Option
                    Certificate.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	 	
                  5.2.

                	
                  The
                    period in which the Holder can exercise the Options shall be
                    called the
                    “Exercise
                    Period”.

                

        

         

        
          	6.	
                  TERMINATION
                    OF EMPLOYMENT WITH THE COMPANY

                

        

         

        
          	 	
                  6.1

                	
                  In
                    the event of termination of the Holder’s employment with the Company due
                    to any reason, including, but not limited to: (i) firing of the
                    Holder or
                    (ii) the Holder’s resignation, or (iii) death of the Holder or (iv)
                    disability of the Holder or (v) a declaration that the Holder
                    has no legal
                    capacity, a notice of the termination of employment by either
                    the Company
                    or the Holder or a declaration as aforementioned, shall be deemed
                    to
                    constitute a termination of employment from the date it was delivered
                    to
                    the other side (as for declaration - from the date it was granted)
                    (“Employment
                    Termination Date”),shall
                    the following instructions shall take
                    place:

                

        

         

        
          	 	
                  6.2.

                	
                  Notwithstanding
                    anything to the contrary, the Total Option Amount (apart from
                    Options that
                    were exercised) will expire if the termination of the Holder’s employment
                    with the Company occurs prior to 1.4.2002 and is due to any action,
                    omission or state of affairs related to him which the Committee
                    or the
                    Board determines as working against the interests of the Company,
                    in its
                    sole discretion. The abovementioned determination of the Committee
                    or the
                    Board shall be final and
                    conclusive.

                

        

         

        
          	 	
                  6.3.

                	
                  In
                    the event that the Holder resigns from the Company, for whatever
                    reason,
                    before 1.4.2002, than a number equal to 28,623 Options multiplied
                    by the
                    whole number of months from the date of such termination until
                    1.4.2002,
                    will automatically expire.

                

        

         

        
          	 	
                  6.4.

                	
                  In
                    the event that the Holder’s termination of employment with the Company is
                    not under the circumstances referred above in Sections 6.2, 6.3,
                    than the
                    no Options will expire as a result of the Holder’s termination of
                    employment with the Company.

                

        

         

        
          	 	
                  6.5.

                	
                  If
                    the Holder chooses to exercise certain options after he is no
                    longer
                    employed by the Company, he might lose the tax benefits according
                    to
                    Section 102. In such case such Holder will solely bear any and
                    all tax
                    consequences.

                

        

         

        
          	 	
                  6.6.

                	
                  For
                    the purposes of this Option Certificate the Committee or Board
                    is
                    authorized to determine if and when the Holder terminated his
                    employment
                    with the Company, and due to what
                    reason.

                

        

         

        
          	 	
                  6.7.

                	
                  If
                    the Holder’s employment terminates within a period of 90 days prior to the
                    consummation of an Initial Public Offering (the “IPO”)
                    of the Company, he shall be treated for the purpose of his entitlement
                    to
                    exercise his Options as if his employment has continued until
                    the date of
                    the IPO.

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
           

          
            	7.	
                    TERM
                      AND EXERCISE OF OPTIONS

                  

            	 	 

          

          
          

        

        
          	 	
                  7.1.

                	
                  Options
                    shall be exercised by the Holder by giving written notice to
                    the Company
                    in such form and method as may be determined by the Company and
                    the
                    Trustee and conforming to the
                    provisions
                    of Section 102. The shares that are issued due to exercise of
                    Options in
                    accordance with this Option Certificate will be referred to as
                    “the Shares”.

                

        

         

        
          	 	
                  7.2.

                	
                  The
                    Holder will be entitled to exercise, upon paying the Exercise
                    Price, all,
                    or part of the Options during the Exercise Period, as long as
                    he does not
                    exercises less than 100 Options at a time, if he was allocated
                    with more
                    than 100 Options.

                

        

         

        
          	 	
                  7.3.

                	
                  Each
                    Option allocated under this Option Certificate shall be exercisable
                    during
                    the Exercise Period. The exercise of one Option shall entitle
                    the Holder
                    to hold (himself or by a Trustee) one Ordinary A Share 0.5 NIS
                    par
                    value.

                

        

         

        
          	 	
                  7.4.

                	
                  The
                    Exercise Price shall be payable upon the exercise of the Option
                    in a form
                    satisfactory to the Committee, including without limitation,
                    by cash,
                    cheque or by deduction from the Holder’s
                    salary.

                

        

         

        
          	 	
                  7.5.

                	
                  Options
                    granted under this Option Certificate shall not be transferable
                    by the
                    Holder other than by Will or laws of descent and distribution,
                    and during
                    an Holder’s lifetime shall be exercisable only by such
                    Holder.

                

        

         

        
          	8.	
                  ADJUSTMENTS

                

        

         

        
          	 	
                  8.1.

                	
                  If
                    the Company is separated, reorganized, consolidated with or into
                    another
                    corporation or most or substantial part of the Company’s assets are sold
                    while Options which were not yet been exercised remain outstanding
                    under
                    this Option Certificate, the Company guarantee to take all reasonable
                    actions in order to maintain the rights of the Holder, so the
                    Holder’s
                    rights
                    shall
                    not be derogated or impaired in the course of such separations,
                    reorganizations, consolidations or sale, or that the Holder shall
                    be
                    compensated for such event. The Company, at its sole discretion,
                    shall
                    determine what steps shall be taken according to this section
                    8.1.

                

        

         

        
          	 	
                  8.2.

                	
                  If
                    more than 50% of the outstanding and issued share capital of
                    the Company
                    is sold (“the Sale”) to
                    an entity that does not hold shares of the  Company prior
                    to the
                    Sale, and Section 8.3 does not apply to such Sale, then the
                    Board
                    may, in its sole discretion, secure the Holder’s rights in the way
                    specified in Section 8.3.1 herein, replacing the event of the
                    merger with
                    the Sale.

                

        

         

        
          	 	
                  8.3.

                	
                  If
                    the Company is merged into another corporate, than the Company
                    shall make
                    its best reasonable commercial efforts in order to substitute
                    all
                    outstanding Options, on an equitable basis, (as solely determined
                    by the
                    Committee or the Board) with options or other securities in the
                    corporate
                    to which the Company shall merge
                    into.

                

        

         

        
          	 	
                  8.3.1.

                	
                  However,
                    if it is not possible (for any reason whatsoever) to substitute
                    the
                    outstanding options as mentioned in section 8.3 above than the
                    Holder may
                    exercise the Total Option Amount by no later than 14 days prior
                    to the
                    consummation of such merger (unless provided otherwise by the
                    Committee or
                    the Board). The Holder shall be entitled to exercise such Options
                    pending
                    the closing of such merger. In such case the Holder will have
                    to sell all
                    Shares he hold (in person or by the Trustee) under the same terms
                    as set
                    forth in such merger transaction. Unless determined otherwise
                    by the Board
                    or the Committee, any Options that are not exercised by the Holder
                    at
                    least 7 days before the effective date of the merger shall automatically
                    expire and become void.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	 	
                  8.4.

                	
                  If
                    the outstanding shares of the Company shall at anytime be changed
                    or
                    exchanged by declaration of a share dividend, share split, combination
                    or
                    exchange of shares, recapitalization, or any other like event
                    by or of the
                    Company, and as often as the same shall occur, then the number,
                    class and
                    kind of Shares subject to this Option Certificate or subject
                    to any
                    Options therefore granted, and the Exercise Prices of the Options,
                    shall
                    be appropriately and equitably adjusted so as to maintain the
                    proportionate number of Shares without changing the aggregate
                    Exercise
                    Prices of the Options, provided, however, that no adjustment
                    shall be made
                    by reason of the distribution of subscription rights on outstanding
                    stock.
                    Such adjustment shall be made by the Committee or Board, whose
                    determination in
                    that respect
                    shall be final, binding and
                    conclusive.

                

        

         

        
          	 	
                  8.5.

                	
                  The
                    Holder hereby agrees to sign any document he should reasonably
                    be required
                    to sign pursuant to the provisions of this section 8. If the
                    Holder shall
                    refuse to sign any such document the Committee or Board may determine
                    that
                    the Options held by the Trustee for such Holder’s benefit shall
                    immediately expire.

                

        

         

        
          	 	
                  8.6.

                	
                  Notwithstanding
                    the forgoing, the holding of the Holder, in the Company as a
                    result his
                    entitlement to Options or Shares, shall be fully diluted by any
                    Subsequent
                    Investment in the Company by a shareholder of the Company or
                    by any other
                    third party (the “Investor”).
                    “Subsequent
                    Investment” shall
                    mean any investment in the Company whether by issuance of the
                    Company’s
                    securities, by Capital Deeds or by shareholders’ loans, made during the
                    Exercise Period which applies to the Holder
                    concerned.

                

        

         

        
          	9.	
                  RIGHTS
                    AND OBLIGATIONS ATTACHED TO THE
                    SHARES

                

        

         

        
          	 	
                  9.1.

                	
                  The
                    rights and obligations attached to the Shares will be as determined
                    by the
                    Articles of Association of the Company as amended from time to
                    time. The
                    Holder shall be required to accept that such Shares may be subject
                    to
                    rights
                    of
                    first refusal, co-sale rights and other rights, as set forth
                    in the
                    Articles of Association of the Company, as amended from time
                    to time. No
                    right attached to Shares may be exercisable prior to the issuance
                    of such
                    Shares as a result of the Holder exercising his
                    Options.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	 	
                  9.2.
                    

                	
                  Notwithstanding
                    anything to the contrary in the Articles of Association of the
                    Company, in
                    respect of the Shares, the Holder shall not have: (i) rights
                    of first
                    refusal in relation with any sale of shares of the Company; (ii)
                    co-sale
                    rights in relation with any sale of shares of the
                    Company;

                

        

         

        
          	 	
                  9.3.
                    

                	
                  As
                    long as the Shares are held by the Trustee, and once the Shares
                    entitle
                    the holder thereof to voting rights, the Trustee will vote each
                    of the
                    Shares held by him for the benefit of the Holder in accordance
                    with such
                    Holder’s instructions in writing.

                

        

         

        
          	 	
                  9.4.
                    

                	
                  With
                    respect to the Shares that are held by the Trustee, the Holder
                    shall be
                    entitled to receive dividends in accordance with the quantity
                    of such
                    Shares, and subject to any applicable taxation on distribution
                    of
                    dividends. In such case the cash dividends paid with respect
                    thereto shall
                    be paid directly to the Holder. The above said shall not apply
                    to Options
                    that were not exercised into
                    Shares.

                

        

         

        
          	 	
                  9.5.

                	
                  The
                    Company shall be under no obligation to register the Options
                    in the event
                    of an IPO. Any Shares issued as a result of exercising an Option
                    by an
                    Holder shall be so registered, subject to any demands of the
                    underwriters,
                    applicable law, or any obligations of the Company, whether future,
                    past or
                    present.

                

        

         

        
          	 	
                  9.6.

                	
                  The
                    Holder hereby irrevocably agrees that once the Company intends
                    to offer
                    it’s securities to the public he shall sign any document and will
                    approve
                    any resolution or restriction upon the Shares, or modify this
                    Option
                    Certificate, if his signature or approval or such restriction
                    or
                    modification will be reasonably needed, in order to help the
                    Company stand
                    in all the underwriters and stock exchange
                    demands.

                

        

         

        
          	 	
                  9.7.

                	
                  The
                    Holder acknowledges that once the Company’s shares will be traded in any
                    public market, his right to sell his Shares may be subject to
                    some
                    limitations, as set forth by the Company’s underwriters. In such event,
                    the Holder will unconditionally agree to any such
                    limitations.

                

        

         

        
          	 	
                  9.8.

                	
                  Notwithstanding
                    anything to the contrary in this Option Certificate, the Holder
                    shall not
                    be entitled to sell any shares received following exercise of
                    the Options,
                    or any part thereof, until the earlier
                    of:

                

        

         

        
          	 	
                  9.8.1.

                	
                  1.4.2002.

                

        

         

        
          	 	
                  9.8.2.

                	
                  The
                    Company’s initial public offering, and subject to the expiration of
                    applicable lock-up period.

                

        

         

        
          	 	
                  9.8.3.

                	
                  Termination
                    of the Holder’s employment in the Company that is not subject to Section
                    6.2, or 6.3 above.

                

        

         

        
          	 	
                  9.9.

                	
                  If
                    the Holder shall exercise Options prior to the expiration of
                    the sale
                    restrictions in Section 9.8 above, the shares received following
                    such
                    exercise will be held by the Trustee, and the following shall
                    apply:

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	 	
                  9.9.1.

                	
                  If
                    the Holder shall terminate his employment with the Company in
                    accordance
                    with Section 6.2 above prior to the earlier event that is referred
                    to in
                    Section 9.8 above, the Holder will cooperate with the Company
                    and the
                    Trustee (including signing any document that is reasonably required
                    by the
                    Company and/or the Trustee) in order to get all shares received
                    subsequent
                    such exercise transferred to the
                    Company.

                

        

         

        
          	 	
                  9.9.2.

                	
                  If
                    the Holder shall terminate his employment with the Company in
                    accordance
                    with Section 6.3 above prior to the earlier event that is referred
                    to in
                    Section 9.8 above, the Holder will cooperate with the Company
                    and the
                    Trustee (including signing any document that is reasonably required
                    by the
                    Company and/or the Trustee) in order to get the appropriate number
                    of
                    shares received subsequent such exercise, as determined
                    by
                    the Company in accordance with Section 6.3 above, transferred
                    to the
                    Company.

                

        

         

        
          	10.	
                  ASSIGNABILITY
                    AND SALE OF OPTIONS

                

        

         

        
          	 	
                  10.1.

                	
                  No
                    Option, whether fully paid or not, shall be assignable, transferable
                    or
                    given as collateral, and no right with respect to them shall
                    be given to
                    any third party whatsoever, and during the lifetime of the Holder,
                    each
                    and all of the Holder’s rights
                    to
                    purchase Shares hereunder shall be exercisable only by
                    him.

                

        

         

        
          	 	
                  10.2.

                	
                  As
                    long as the Shares, or any part thereof are held by the Trustee
                    for the
                    benefit of the Holder, all rights
                    the
                    Holder possesses over the Shares shall be personal, can not be
                    transferred, assigned, pledged or mortgaged, other than by Will
                    or laws of
                    descent and distribution, and no right to purchase the Options
                    may be
                    transferred by the Holder other than by Will or laws of descent
                    and
                    distribution.

                

        

         

        
          	11.	
                  TERM
                    OF THE OPTION CERTIFICATE

                

        

         

        This
          Option Certificate shall be effective as of the day it was adopted by the
          Board
          and shall terminate when all the Options are exercised into Shares or expired
          in
          accordance with the provisions above.

         

        
          	12.	
                  AMENDMENTS

                

        

         

        The
          Board
          may, at any time and from time to time, subject to the written consent
          of the
          Trustee, amend, alter or discontinue the Option Certificate.

         

        
          	13.	
                  GOVERNMENT
                    REGULATIONS AND OTHER RESTRICTIONS 

                

        

         

        This
          Option Certificate, the allocation and exercise of Options hereunder, the
          obligation of the Company to sell and deliver Shares under such Options,
          and any
          other act or obligation of the Company or the Trustee in connection with
          this
          Option Certificate are all subject to the Company’s Articles of Association, to
          the provisions of Section 102 and all applicable laws, rules, and regulations,
          whether of the State of Israel or of the United States or any other State
          having
          jurisdiction over the Company and any Holder.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        
          	14.	
                  CONTINUANCE
                    OF EMPLOYMENT

                

        

         

        The
          Option Certificate shall not be construed to impose any obligation on the
          Company or a subsidiary thereof, to continue the Holder’s employment with it,
          and nothing in the Option Certificate shall confer upon the Holder any
          right to
          continue in the employment with the Company or a subsidiary thereof or
          restrict
          the right of the Company or a subsidiary thereof to terminate such employment
          at
          any time.

         

        
          	15.	
                  GOVERNING
                    LAW & JURISDICTION

                

        

         

        This
          Option Certificate shall be governed by, construed and enforced in accordance
          with the laws of the State of Israel applicable to contracts made and to
          be
          performed therein, without giving effect to the principles of conflict
          of laws.
          The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in
          any
          matter pertaining to this Option Certificate.

         

        
          	16.	
                  TAX
                    CONSEQUENCES, INDEMNIFICATION

                

        

         

        
          	 	
                  16.1.

                	
                  Any
                    tax consequences (pursuant to Israeli or any other applicable
                    law),
                    including tax consequences due to adjustments, made in accordance
                    with
                    Section 8 above, arising from the allocation or exercise of any
                    Option,
                    the payment for Shares covered thereby or any other event or
                    act (of the
                    Company, the Trustee or the Holder) relating to this Option Certificate,
                    shall be borne solely by the Holder. The Company and/or the Trustee
                    shall
                    withhold taxes according to the requirements under the applicable
                    laws,
                    rules and regulations, including withholding taxes at
                    source.

                

        

         

        
          	 	
                  16.2.
                    

                	
                  The
                    Company and/or the Board and/or the Committee and/or the Trustee
                    shall not
                    be required to release any Share certificate or transfer any
                    Shares to the
                    Holder until all required payments have been fully
                    made.

                

        

         

         

         

        Tadiran
          Scopus Ltd.

         

        /s/
          [illegible] 
          
By:

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

        Confirmation

         

        

         

        I,
          the
          undersigned, Mr Yossi Ben Shalom hereby declare and agree that I have read
          the
          provision of this Option Certificate and that I am bound by and shall follow
          all
          of the provisions thereof

         

         

        /s/
          Yossi
          Ben Shalom

        
          
            

          

        

        Yossi
          Ben
          Shalom 

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

         

      

    

    

      Tadiran
        Scopus Ltd.

      

      
        	
                To:

              	
                David
                  Mahlab ID 054141064   (the “Holder”)

              
	 	
                From: 30
                  Tzukerman, Yehud

              
	 	 
	
                Date:
                  

              	
                December
                  27, 2000   (“Allocation
                  Date”)

              

      

      

      Option
        Certificate

      (the
        “Option Certificate”)

       

      to
        Purchase Class A Ordinary Shares of

       

      Tadiran
        Scopus Ltd.

       

      Registration
        Number 51-188910-7

       

      for
        such
        consideration and under the terms as are detailed below

      

      VOID
        AFTER 17:00 p.m. (prevailing Tel Aviv time)

      On
        the
        last day of the Exercise Period (as defined below)

      

      This
        is
        to certify that the Holder, being a director of the Company at the date hereof,
        is entitled to purchase from Tadiran Scopus Ltd. (the
“Company”), during the Exercise Period (as defined below), a
        total of 641,610 Class A Ordinary Shares of the Company, par value of each
        NIS
        0.50 (the “Total
        Option Amount”or
        the
“Options”for
        any
        part thereof), in consideration for the payment to the Company of one US
        Dollar
        (US$ 1.00) per Option Share (the “Exercise
        Price”), for
        an
        aggregate amount of up to US$ 641,610, in consideration for the issuance
        of the
        Company’s Class A Ordinary Shares, all subject to the terms and conditions set
        forth below (the “Option”).

       

      
        	1.	
                PREAMBLE

              

      

       

      On
        December, __th, 2000, the Board of Directors of the Company (“the
        Board”) resolved
        that the Company will issue to the Holder, at no charge, the Option, subject
        to
        the terms and conditions of this Option Certificate.

       

      
        	 	
                1.1.

              	
                This
                  Option Certificate is made pursuant to the provisions of Section
                  102 of
                  the Israeli Income Tax Ordinance (New Version) 1961 (“the
                  Income Tax Ordinance”) and
                  any regulations, rules, orders of procedures promulgated thereunder
                  or any
                  successor section, regulation, rule order of procedure thereof
                  (Section
                  102, as specified above and the regulations, rules, orders of procedures
                  promulgated thereunder or any successor section, regulation, rule
                  order of
                  procedure thereof shall be referred herein collectively as: “Section
                  102”).
                  The Options will be allocated subject to any pre-approval of this
                  Option
                  Certificate, if required by the Income Tax Authorities in accordance
                  with
                  Section 102.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                1.2.

              	
                In
                  the event that the recommendations of the Ben Bassat Committee
                  receive a
                  binding legal status after this Option Certificate is in force
                  (the
                  “New
                  Law”), the
                  Company shall have full right to turn to the Tax Authority, or
                  any other
                  governmental authority or body, and to request that this Option
                  Certificate shall be adapted to the New Law (the “Request”). If
                  the Request is approved then this Option Certificate, shall be
                  interpreted
                  as to be fully adapted to the New Law and the Company may make
                  any changes
                  in this Option Certificate to fulfill full adaptation to the New
                  Law. By
                  signing this Option Certificate, the Holder shall be deemed and
                  be
                  declared as granting his full and irrevocable consent to the right
                  of the
                  Company as aforementioned.

              

      

       

      
        	2.	
                ADMINISTRATION
                  OF THE OPTION CERTIFICATE

              

      

       

      
        	 	
                2.1.

              	
                The
                  Board or the Company’s Compensation Committee (“the
                  Committee”), shall have the power to administer this Option
                  Certificate. Notwithstanding the above, the Board shall have the
                  power and
                  authority to take any act the Committee is empowered and authorized
                  to
                  take or which the Committee is precluded from taking by reason
                  of law or
                  otherwise.

              

      

       

      
        	 	
                2.2.

              	
                The
                  Committee, shall consist of such number of members as may be fixed
                  by the
                  Board (but not less than two (2) in
                  number).

              

      

       

      
        	 	
                2.3.

              	
                The
                  Holder shall not be nominated as a member of the Committee, nor
                  shall he
                  participate in any Board meeting that refers to the Option
                  Certificate.

              

      

       

      
        	 	
                2.4.

              	
                Subject
                  to this Option Certificate, any applicable law, the Company’s Articles of
                  Association and any other binding commitment taken by the Company,
                  the
                  Committee shall have full power and authority to administer the
                  Option
                  Certificate. Such power and authority shall include, but not be
                  limited
                  to: (i) the acceleration of any Holder’s right to exercise, in whole or in
                  part, any previously granted Options; (ii) the interpretation of
                  the
                  provisions, and the supervision over the administration of this
                  Option
                  Certificate; and (iv) the determination of any other matter
                  which is
                  necessary or desirable for, or incidental to, the administration
                  of this
                  Option Certificate.

              

      

       

      
        	 	
                2.5.

              	
                All
                  decisions and selections made by the Board or the Committee pursuant
                  to
                  the provisions of this Option Certificate shall be made by a majority
                  of
                  its members. Any decision reduced to writing and signed by all
                  the
                  members, who are authorized to participate in such decision, shall
                  be
                  fully effective as if it had been made by a majority at a meeting
                  duly
                  held.

              

      

       

      
        	 	
                2.6.

              	
                The
                  interpretation and construction by the Committee of any provision
                  of this
                  Option Certificate shall be final and conclusive unless otherwise
                  determined by the Board.

              

      

       

      
        	 	
                2.7.

              	
                No
                  member of the Board or of the Committee shall be held liable for
                  any act
                  or determination made in good faith with respect to this Option
                  Certificate.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	3.	
                SHARES
                  RESERVED FOR THIS OPTION
                  CERTIFICATE

              

      

       

      Subject
        to adjustments, as set forth in Section 8 below, a total of 641,610 Ordinary
        A
        Shares, of 0.5 NIS par value of the Company’s authorized share capital shall be
        subject to this Option Certificate (“Reserved
        Shares”). The
        Reserved Shares may be issued only in accordance with the terms hereof. Any
        such
        Reserved Shares, which remain unissued and which are not subject to this
        Option
        Certificate any more, may cease to be reserved for the purpose of this Option
        Certificate, at the Board’s decision, but until termination of the Option
        Certificate the Company shall at all times reserve sufficient number of Reserved
        Shares to meet the requirements of this Option Certificate.

       

      
        	4.	
                TRUSTEE

              

      

       

      
        	 	
                4.1.

              	
                This
                  Option Certificate, the Total Option Amount and/or any shares (as
                  defined
                  below) issued upon exercise of such Options and/or other shares
                  received
                  as a result of any realization of rights pursuant to this Option
                  Certificate, shall be issued to the Trust Company of Mizrahi
                  Bank Ltd.
                  who is (or shall be approved as) a trustee in accordance with the
                  provisions of Section 102 (the “Trustee”),
                  and
                  held for the benefit of the Holder for a period of not less than
                  the
                  period required by Section 102 (24 months, as of today) starting
                  from the
                  Allocation Date. In addition, the Trustee shall not release any
                  shares
                  held by it in accordance with the terms of this Option Certificate,
                  until
                  the earlier of the following events: (i) The initial public offering
                  of
                  the Company’s shares; (ii) Another date, as determined by the Committee;
                  (iii) In the event that the Holder wishes to sell the shares held
                  for his
                  benefit by the Trustee, according to a bona fide transaction (as
                  determined by the Committee). The shares subject to such transaction
                  shall
                  be released upon its consummation. Notwithstanding anything to
                  the
                  contrary, the Trustee shall not release any Options which were
                  not yet
                  converted into Shares, or release any Shares issued upon exercise
                  of
                  Options, prior to the full payment of the Holder’s tax liabilities arising
                  from Options which were granted to him, and/or any Shares issued
                  upon
                  exercise of such Options.

              

      

       

      
        	 	
                4.2.

              	
                Any
                  voting rights attached to any shares issued upon the exercise of
                  any
                  Options granted under the Option Certificate and held by the Trustee
                  for
                  the benefit of the Holder shall be exercised in accordance to Section
                  9 to
                  this Option Certificate.

              

      

       

      
        	5.	
                VESTING
                  EXERCISE PERIOD

              

      

       

      The
        Options shall vest over three years, starting on July 1, 2000 (the “Vesting
        Commencement Date”),
        as
        follows:

       

      
        	 	
                5.1.

              	
                30%
                  of the Total Option Amount on July 1,
                  2001.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                5.2.

              	
                Additional
                  8.75% of the Total Option Amount shall vest at the end of each
                  of the
                  eight quarters after one year has passed from the Vesting Commencement
                  Date.

              

      

       

      
        	 	
                5.3.

              	
                Notwithstanding
                  anything to the contrary in this Option Certificate, all Options
                  shall
                  expire six
                  (6)
                  years from the date the Company issued this Option Certificate
                  (the
                  “Expiration
                  Date”). All
                  Options that were not exercised by the Expiration Date shall expire
                  immediately and the Holder shall not have any claim towards the
                  Company.
                  Nothing in this provision shall prejudice the shortening of the
                  Exercise
                  Period by virtue of any term to this Option
                  Certificate.

              

      

       

      
        	 	
                5.4.

              	
                In
                  the event of a Merger or a Sale of the Company’s shares or an Assets Sale,
                  as defined in section 8 herein, vesting period of this Option shall
                  accelerate in accordance with Section 8
                  herein.

              

      

       

      
        	 	
                5.5.

              	
                The
                  period in which the Options that vest are exercisable shall be
                  called
                  “Exercise
                  Period”.

              

      

       

      
        	6.	
                TERMINATION
                  OF EMPLOYMENT WITH THE COMPANY

              

      

       

      
        	 	
                6.1.

              	
                In
                  the event of termination of the Holder’s employment with the Company due
                  to any reason, including, but not limited to: (i) firing of the
                  Holder or
                  (ii) the Holder’s resignation, or (iii) death of the Holder or (iv)
                  disability of the Holder or (v) a declaration that the Holder has
                  no legal
                  capacity, a notice of the termination of employment by either the
                  Company
                  or the Holder or a declaration as aforementioned, shall be deemed
                  to
                  constitute a termination of employment from the date it was delivered
                  to
                  the other side (as for declaration – from the date it was granted)
                  (“Employment
                  Termination Date”), and
                  the following instructions shall take
                  place:

              

      

       

      
        	 	
                6.2.

              	
                In
                  the event that the Holder’s termination of employment with the Company is
                  a result of his disability, then the Holder will continue to be
                  deemed as
                  an employee of the Company for the purpose of this Option Certificate,
                  and
                  such Holder’s rights according to this Option Certificate will not be
                  derogated due to the fact he is no longer an employee of the Company
                  (apart from tax consequences, if applicable, the Holder will solely
                  bear).
                  For the purposes of this section 9.2, “Disability”
                  shall mean the inability, due to illness or injury, to engage in
                  any
                  gainful occupation for which the individual is suited by education,
                  training or experience, which condition continues for at least
                  six (6)
                  months.

              

      

       

      
        	 	
                6.3

              	
                In
                  the event that the termination of employment with the Company is
                  due to
                  the death of the Holder or declaration as to his or her legal incapacity,
                  Holder’s estate or appointed guardian, or other person who acquired the
                  right to exercise the option by bequest or inheritance or order
                  of the
                  Court, will substitute the Holder with respect to Holder’s rights and
                  obligations according to this Option Certificate, as if the Holder
                  continues to be employed with the Company (apart from tax consequences,
                  if
                  applicable, to which such Holder’s estate, appointed guardian etc. will
                  solely bear).

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                6.4.

              	
                If
                  the Holder chooses to exercise certain options after he is no longer
                  employed by the Company, he might lose the tax benefits according
                  to
                  Section 102. In such case such Holder will solely bear any and
                  all tax
                  consequences.

              

      

       

      
        	 	
                6.5.

              	
                Notwithstanding
                  anything to the contrary, the Total Option Amount (apart from Options
                  that
                  were exercised) will expire if the termination of the Holder’s employment
                  with the Company is due to any action, omission or state of affairs
                  related to him which the Committee or the Board determines as working
                  against the interests of the Company, in its sole discretion. The
                  abovementioned determination of the Committee or the Board shall
                  be final
                  and conclusive.

              

      

       

      
        	 	
                6.6.

              	
                If
                  the Board shall decide to terminate the Holder’s employment with the
                  Company due to any reason other then the one mentioned in section
                  6.5
                  above, then there will be an acceleration in the vesting of the
                  Total
                  Option Amount as follows:

              

      

       

      
        	 	
                6.6.1.

              	
                If
                  such termination occurs prior to July 1, 2001, then 47.5% of the
                  Total
                  Option Amount shall immediately
                  vest.

              

      

       

      
        	 	
                6.6.2.

              	
                If
                  such termination occurs on, or after July 1, 2001, then in additional
                  26.75% of the Total Option Amount (but not more, in the aggregate,
                  then
                  the Total Option Amount) shall immediately
                  vest.

              

      

       

      
        	 	
                6.7.

              	
                Subject
                  to the Israeli Tax Authorities approval, termination of employment
                  shall
                  not include termination of employment in order to be employed by
                  a
                  Subsidiary.

              

      

       

      
        	 	
                6.8.

              	
                For
                  the purposes of this Option Certificate the Committee or Board
                  is
                  authorized to determine if and when an Holder terminated his employment
                  with the Company, and due to what
                  reason.

              

      

       

      
        	 	
                6.9.

              	
                If
                  the Holder’s employment terminates within a period of 90 days prior to the
                  consummation of an Initial Public Offering (the “IPO”)
                  of the Company, he shall be treated for the purpose of his entitlement
                  to
                  exercise his Options as if his employment has continued until the
                  date of
                  the IPO.

              

      

       

      
        	 	
                6.10

              	
                In
                  any case of termination of the Holder’s employment with the Company that
                  is not in accordance with Sections 6.2 or 6.3 above, and subject
                  to
                  sections 6.5, 6.6 and 6.9 above, any Options, that are not vested
                  by the
                  date of the Holder’s termination of employment with the Company, shall
                  expire and become automatically null and void as of the date of
                  termination.

              

      

       

      
        	7.	
                TERM
                  AND EXERCISE OF OPTIONS

              

      

      
         

        
          
            	 	
                    7.1

                  	
                    Options
                      shall be exercised by the Holder by giving written notice to
                      the Company
                      in such form and method as may be determined by the Company
                      and the
                      Trustee and conforming to the provisions of Section 102. The
                      shares that
                      are issued due to exercise of Options in accordance with this
                      Option
                      Certificate will be referred to as “the
                      Shares”.

                  

          

           

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    
       

      Company
        and the Trustee and conforming
        to the provisions of
        Section 102.
        The
        shares that are issued due, to exercise of Options in accordance with this
        Option Certificate will be
        referred to as“theShares”.

       

      
        	
              	7.2.	
                The
                  Holder will be entitled to exercise, upon paying the Exercise Price,
                  all,
                  or part of the Options that are vested at that time during the
                  Exercise
                  Period, as long as he does not exercises less than 100 Options
                  at
                  a time, if he was allocated with more than 100
                  Options.

              

      

       

      
        	
              	7.3.	
                Each
                  Option allocated under this
                  Option Certificate shall be exercisable during the Exercise Period.
                  The
                  exercise of one Option shall entitle
                  the Holder
                  to hold (himself or by a Trustee) one Ordinary A Share 0.5 NIS
                  par
                  value.

              

      

       

      
        	
              	7.4.	
                The
                  Exercise Price shall be payable upon the exercise of the Option
                  in
                  a
                  form satisfactory to the Committee, including without limitation, by
                  cash,
                  cheque or
                  by
                  deduction from the Holder’s salary.

              

      

       

      
        	
              	7.5.	
                Options
                  granted under this Option Certificate shall not
                  be transferable by
                  the Holder other than by Will or laws of descent and distribution,
                  and
                  during an Holder’s lifetime shall be exercisable only
                  by such Holder.

              

      

       

      
        
          	8.	
                  ADJUSTMENTS

                

        

      

       

      
        	
              	8.1.	
                If
                  the Company is separated, reorganized, consolidated with or into
                  another
                  corporation or most or substantial part of the Company’s assets
                  are
                  sold while Options which were not yet been exercised remain outstanding
                  under this Option Certificate, the Company guarantee to take
                  all reasonable actions in order to maintain the
                  rights
                  of
                  the Holder, so
                  the Holder’s rights shall not be derogated or impaired
                  in the course of
                  such separations, reorganizations, consolidations or sale, or that
                  the
                  Holder
                  shall be
                  compensated for such event. The Company, at its sole discretion,
                  shall determine what steps shall
                  be
                  taken according to this section
                  8.1.

              

      

       

      
        	
              	8.2.	
                If
                  more than 50% of the outstanding and issued share capital of the
                  Company
                  is sold (“the
                  Sale”) to
                  an entity that does not hold shares of the
                  Company prior to the Sale, and Section 8.3 does not apply to such
                  Sale,
                  then the Total Option Amount will automatically fully vest and,
                  in
                  addition, the Board may, in its sole discretion, secure the Holder’s
                  rights
                  in the way specified in Section 8.3.1 herein, replacing the event
                  of
                  the merger with the Sale.

              

      

       

      
        	
              	8.3.	
                If
                  the Company is merged into another corporate, then the Total Option
                  Amount
                  shall fully and automatically vest, and the Company shall make
                  its best reasonable commercial efforts in order to substitute all
                  outstanding
                  Options, on an equitable basis, (as solely determined by the Committee
                  or the Board) with options or
                  other securities in the corporate
                  to which the
                  Company
                  shall merge into.

              

      

       

      
        	
              	8.3.1.	
                However,
                  if it is not possible (for
                  any reason whatsoever)
                  to substitute the outstanding options
                  as mentioned
                  in
                  section 8.3 above than the Holder may exercise
                  the Total Option Amount by
                  no later than 14 days
                  prior to the consummation of such merger (unless provided
                  otherwise by the Committee or the Board). The Holder
                  shall be entitled to exercise such Options pending
                  the closing of such merger. In such case the Holder
                  will have to sell all Shares he hold (in person or by
                  the Trustee) under the same terms as set forth in such merger transaction.
                  Unless determined otherwise by the Board
                  or the Committee, any Options
                  that are not exercised
                  by the Holder at least 7 days before the effective
                  date of the merger shall automatically expire and
                  become void.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
              	8.4.	
                In
                  the case that all, or most of the assets of the Company are sold
                  to a
                  third
                  party (the “Assets
                  Sale”), the
                  Total Option Amount shall immediately
                  and automatically vest.

              

      

        

      
        	
              	8.5.	
                If
                  the outstanding shares of the Company shall at anytime be changed
                  or
                  exchanged by declaration of a share dividend, share split, combination
                  or exchange of shares, recapitalization, or any other like event
                  by or of the Company, and as often as the same shall occur, then
                  the
                  number, class and kind of Shares subject to this Option Certificate
                  or
                  subject to any Options therefore granted, and the Exercise Prices
                  of
                  the
                  Options, shall be appropriately and equitably adjusted so as to
                  maintain
                  the proportionate number of Shares without changing
                  the aggregate
                  Exercise Prices of the Options, provided, however, that no adjustment
                  shall be made by reason of the distribution of subscription rights
                  on outstanding stock. Such adjustment
                  shall
                  be
                  made by the Committee or Board, whose determination in that respect
                  shall
                  be final, binding
                  and conclusive.

              

      

       

      
        	
              	8.6.	
                The
                  Holder hereby agrees to sign any document he should reasonably
                  be
                  required to sign pursuant to
                  the provisions of this section 8. If the Holder
                  shall refuse
                  to sign any such document the Committee or Board may
                  determine that the Options held by the Trustee for such Holder’s
                  benefit
                  shall immediately expire.

              

      

       

      
        	
              	8.7.	
                Notwithstanding
                  the forgoing, the holding of the Holder in the Company as
                  a result
                  his entitlement to Options or Shares, shall be fully diluted
                  by any
                  Subsequent Investment in the Company by a shareholder of the Company
                  or by
                  any other third party (the “Investor”).
                  “Subsequent Investment” shall mean any investment in
                  the Company whether by issuance of the Company’s securities, by
                  Capital Deeds, or by shareholders’ loans, made during the Exercise Period
                  which applies to the Holder
                  concerned.

              

      

       

      
        
          
            	9.	
                    RIGHTS
                      AND OBLIGATIONS ATTACHED TO THE
                      SHARES

                  

          

        

      

       

      
        	
              	9.1.	
                The
                  rights
                  and
                  obligations attached to the Shares will be as determined by
                  the Articles of Association of the Company as amended from time
                  to
                  time. The
                  Holder shall be required to
                  accept that such Shares may be subject to rights
                  of
                  first refusal, co-sale rights and other rights, as set forth
                  in the Articles of Association of
                  the Company, as amended from time
                  to time. No right attached to Shares may be exercisable prior to
                  the
                  issuance of such Shares as a result of the Holder exercising his
                  Options.

              

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
              	9.2.	
                Notwithstanding
                  anything to
                  the contrary in the Articles of Association of
                  the Company, in respect of the Shares, the Holder shall not have:
                  (i)
                  rights
                  of first refusal in relation with any sale of shares of the Company;
                  (ii)
                  co-sale rights
                  in
                  relation with any sale of shares of the Company;

              

      

       

      
        	
              	9.3.	
                As
                  long as the Shares are
                  held by the Trustee, and once the Shares entitle
                  the holder thereof to voting rights, the Trustee will vote each
                  of
                  the
                  Shares held by him for
                  the benefit of the Holder in accordance with such
                  Holder’s instructions in writing.

              

      

       

      
        	
              	9.4.	
                With
                  respect to the Shares that are held by the Trustee, the Holder
                  shall
                  be
                  entitled to receive dividends in accordance with the quantity of
                  such
                  Shares,
                  and subject to any applicable taxation on
                  distribution of dividends.
                  In such case the cash dividends paid with respect thereto shall
                  be paid directly to the Holder. The above said shall not apply
                  to
                  Options
                  that were not exercised into
                  Shares.

              

      

       

      
        	
              	9.5.	
                The
                  Company shall be under no obligation to register the Options in
                  the
                  event of an IPO. Any Shares issued as a result of exercising an
                  Option
                  by an Holder shall be so registered, subject to any
                  demands of the
                  underwriters, applicable law, or any obligations of the Company,
                  whether
                  future, past or present.

              

      

       

      
        	
              	9.6.	
                The
                  Holder hereby irrevocably agrees that once the Company intends
                  to
                  offer it’s securities to the public he shall sign any document and will
                  approve
                  any resolution
                  or restriction upon the Shares, or modify this Option Certificate,
                  if his
                  signature or approval or such restriction or modification
                  will be reasonably needed, in order to help the Company stand
                  in all the underwriters and stock exchange
                  demands.

              

      

       

      
        	
              	9.7.	
                The
                  Holder acknowledges that once the Company’s shares will
                  be traded
                  in any public market, his right to sell his Shares may
                  be subject to
                  some limitations,
                  as
                  set forth by the Company’s underwriters. In such
                  event, the Holder will unconditionally
                  agree to any such limitations.

              

      

       

      
        
          
            
              
                	10.	
                        ASSIGNABILITY
                          AND SALE OF
                          OPTIONS

                      

              

            

          

        

      

       

      
        
          
            	
                  	10.1.	
                    No
                      Option, whether fully paid or not, shall be assignable, transferable
                      or
                      given as collateral, and no right with respect to them shall
                      be given
                      to
                      any third party
                      whatsoever,
                      and during the lifetime of the Holder, each
                      and all of the Holder’s rights to purchase Shares hereunder shall
                      be
                      exercisable only by
                      him.

                  

          

        

      

       

      
        	
              	10.2.	
                As
                  long as the Shares, or any part thereof are held by the Trustee
                  for
                  the
                  benefit of the Holder, all rights the Holder possesses over
                  the Shares
                  shall be personal, can not be transferred, assigned, pledged or
                  mortgaged,
                  other than by Will or laws of descent and distribution, and no
                  right to purchase the Options may be transferred by the Holder
                  other
                  than
                  by Will or laws of descent and
                  distribution.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          
            	11.	
                    TERM
                      OF THE OPTION
                      CERTIFICATE

                  

          

        

      

       

      This
        Option Certificate shall be effective as of the day it was adopted by the
        Board
        and shall terminate when all the Options are exercised into Shares or
        expired
        in accordance with the provisions above.

       

      
        	12.	
                AMENDMENTS

              

      

       

      The
        Board
        may, at any time and from time to time, subject to the written
        consent of the Trustee, amend, alter or discontinue the Option Certificate.

       

      
        	13.	
                GOVERNMENT
                  REGULATIONS AND OTHER RESTRICTIONS 

              

      

       

      This
        Option Certificate, the allocation
        and exercise of Options herender,
        the
        obligation of the Company to sell
        and
        deliver Shares under
        such Options, and any other act
        or
        obligation of the Company or the
        Trustee in connection with this Option Certificate are all subject to
the
        Company’s Articles of Association, to the provisions of Section 102 and all
        applicable laws, rules and regulations, whether of the State of
        Israel
        or of the United States or any other State having jurisdiction over
        the
        Company and any Holder.

       

      
        
          	14.	
                  CONTINUANCE
                    OF EMPLOYMENT

                

        

      

       

      The
        Option Certificate shall not be construed to impose any obligation on
        the
        Company or a subsidiary thereof, to continue the Holder’s employment
        with it, and nothing in
        the
        Option Certificate shall
        confer
        upon the Holder any right to continue in the employment with the Company
        or a
        subsidiary thereof or restrict the right of
        the
        Company or a
        subsidiary thereof to terminate such employment at any time.

       

      
        	15.	
                GOVERNING
                  LAW & JURISDICTION

              

      

       

      This
        Option Certificate shall
        be
        governed by, construed and enforced in accordance
        with the laws of the State of Israel applicable to contracts made
        and
        to be performed therein, without giving effect
        to
the
        principles
        of conflict of laws. The competent courts of Tel-Aviv, Israel shall
        have sole jurisdiction in any matter pertaining to this Option
        Certificate.

       

      
        	16.	
                TAX
                  CONSEQUENCES, INDEMNIFICATION

              

      

       

      
        	
              	16.1.	
                Any
                  tax consequences (pursuant to Israeli or any other applicable law),
                  including tax consequences due to adjustments, made in accordance
                  with
                  Section 8 above, arising from the allocation or exercise of any
                  Option,
                  the payment for Shares covered thereby or any other event or act
                  (of the
                  Company, the Trustee or the Holder) relating to this Option
                  Certificate, shall be borne solely by the Holder. The Company
                  and/or
                  the Trustee shall withhold taxes according to the requirements
                  under
                  the applicable laws, rules and regulations, including withholding
                  taxes at source. 

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
              	16.2.	
                The
                  Company and/or the Board and/or the Committee and/or the Trustee
                  shall
                  not be required to release any Share certificate or transfer any
                  Shares to the Holder until all required payments have been fully
                  made.

              

      

       

      

      
        	 	 	 
	 	Tadiran
                Scopus Ltd.
	 
 	 
 	 
 
	 	By:  	/s/                                      
                 
	 	
              
	 	 

      

       

      

      

      Confirmation

      
 

      I,
        the
        undersigned, Mr David Mahlab, hereby
        declare and agree that I have read the provision
        of this Option
        Certificate and that I am bound by and shall follow
        all of the provisions
        thereof.

       

       

       

       

      /s/  
        David Mahlab 
        
          

        

      

      David
        MahlabExecution
        Copy

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      THIS
        REGISTRATION RIGHTS AGREEMENT (this “Agreement”)is
        made
        as of the 4 day of August 2003, by and among Scopus Network Technologies
        Ltd.,
        an Israeli company (the “Company”)and
        the
        individuals and entities identified in Schedule
        1 attached
        hereto (collectively, the “Shareholders”),

       

      WITNESSETH:

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Series
        A
        Preferred Shares of the Company, nominal value NIS 0.50 (the “Preferred
        A Shares”);and

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Series
        B
        Preferred Shares of the Company, nominal value NIS 0.50 (the “Preferred
        B Shares”which
        together with the Preferred A shares are referred to herein as the “Preferred
        Shares”);and

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Ordinary
        Shares of the Company, nominal value NIS 0.50 each (the “Ordinary
        Shares”);and

       

      WHEREAS,
        the Shareholders and the Company desire to set forth certain matters regarding
        the ownership of the shares of the Company;

       

      NOW,
        THEREFORE, in consideration of the mutual promises and covenants set forth
        herein, the parties hereby agree as follows:

       

      
        	
                1.

              	
                Definitions.

              

      

       

      As
        used
        in this Agreement, the following terms have the following meanings:

       

      
        	 	
                1.1.

              	
                “Commission”
                  or “SEC”
                  means the U.S. Securities and Exchange Commission, or any other
                  federal
                  agency at the time administering the Securities Act and the Exchange
                  Act.

              

      

       

      
        	 	
                1.2.

              	
                “Exchange
                  Act”
                  means the Securities Exchange Act of 1934, as amended, or any similar
                  federal statute, and the rules and regulations of the Commission
                  thereunder, all as the same shall be in effect at the
                  time.

              

      

       

      
        	 	
                1.3.

              	
                “Existing
                  Shareholders”
                  means Koor Corporate Venture Capital L.P. and Koor Holdings Ltd.
                  (collectively, “Koor”)
                  and Sadot Research and Development
                  Fund Ltd. (“Sadot”)and
                  their Permitted Transferees, as defined in the Articles of Association
                  of
                  the Company.

              

      

       

      
        	 	
                1.4.

              	
                “Form
                  S-3”
                  means Form S-3 or Form F-3 under the Securities Act, as in effect
                  on the
                  date hereof or any registration form under the Securities Act subsequently
                  adopted by SEC which permits inclusion or incorporation of substantial
                  information by reference to other documents filed by the Company
                  with the
                  SEC.

              

      

       

      
        	 	
                1.5.

              	
                “Holder”
                  means any holder of outstanding Registrable Securities or shares
                  convertible into Registrable Securities, who acquired such Registrable
                  Securities or shares convertible into Registrable Securities in
                  a
                  transaction or series of transactions not involving any registered
                  public
                  offering.

              

      

       

       

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          
            

          

        

        
          
          

        

      

       

      
        	 	
                1.6.

              	
                “Initiating
                  Holders”
                  means Holders holding more than a majority of the Registrable Securities,
                  assuming
                  for purposes of such determination the conversion of all shares
                  convertible into Registrable
                  Securities.

              

      

       

      
        	 	
                1.7.

              	
                “IPO”means
                  an
                  initial
                  underwritten public offering by the Company of its
                  securities.

              

      

       

      
        	 	
                1.8.

              	
                “Ordinary
                  Shares”means
                  Ordinary Shares of the Company, par value NIS 0.50 each.

              

      

       

      
        	 	
                1.9.

              	
                “Preferred
                  A
                  Shares”
                  means Series A Preferred Convertible Shares of the Company, par
                  value
                  NIS 0.50 each.

              

      

       

      
        	 	
                1.10.

              	
                “Preferred
                  B
                  Shares”
                  means Series B Preferred Convertible Shares of the Company,
                  par value NIS 0.50 each.

              

      

       

      
        	 	
                1.11.

              	
                “Preferred
                  Shares”means
                  the Preferred
                  A Shares and the Preferred B
                  Shares.

              

      

       

      
        	 	
                1.12.

              	
                “Register,” 
                  “registered”
                  and “registration”
                  refer to a registration effected by filing a registration
                  statement in compliance with the Securities Act and the declaration
                  or
                  ordering by the Commission of effectiveness of such registration
                  statement, or the equivalent
                  actions under the laws of another
                  jurisdiction.

              

      

       

      
        	 	
                1.13.

              	
                “Registrable
                  Securities” means all of the following to the extent the same have not
                  been sold to the public: (i) any and all Ordinary Shares of the
                  Company
                  issuable upon conversion of the Preferred Shares including without
                  limitation any shares that the holders of the Preferred Shares
                  (the
                  “Preferred Holders”) may hereafter purchase pursuant to
                  their preemptive rights, rights of first refusal or otherwise and
                  all
                  Ordinary Shares issued on conversion or exercise of other securities
                  purchased or granted to the Preferred Holders by virtue of the
                  Preferred
                  Shares; and (ii) any and all Ordinary Shares held by the Existing
                  Shareholders on the date of January 15, 2001; and (iii) shares
                  issued in
                  respect of shares referred to in (i) or (ii) above in any reorganization;
                  and (iv) shares issued in respect of the shares referred to in
                  (i), (ii)
                  or (iii) as a result of a share split, share dividend, recapitalization
                  or
                  combination. Notwithstanding the foregoing, Registrable Securities
                  shall
                  not include Registrable Securities (i) sold by a person in a transaction
                  in which his rights under this Agreement are not properly assigned;
                  or
                  (ii) the registration rights associated with such securities have
                  been
                  terminated pursuant to this
                  Agreement.

              

      

       

      
        	 	
                1.14.

              	
                “Securities
                  Act”
                  means the Securities Act of 1933, as amended, or any similar federal
                  statute, and the rules and regulations of the Commission thereunder,
                  or a government or any agency or political subdivision
                  thereof.

              

      

      
         

      

      
        	
                2.

              	
                Incidental
                  Registration.

              

      

       

      
        	 	
                2.1.

              	
                If
                  the Company at any time or from time to time proposes to register
                  any of
                  its securities, including
                  at
                  the IPO, other than in a demand registration under Section 3 of
                  this
                  Agreement, it shall give notice to the Holders of such intention.
                  Upon the
                  written request of any Holder given within twenty (20) days after
                  receipt
                  of any such notice, the Company shall include in such registration
                  all
                  of
                  the shares indicated in such request, so as to permit the disposition
                  of
                  the shares so registered.

              

      

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                2.2.

              	
                Notwithstanding
                  any other provision of this Section 2, if the managing underwriter
                  advises
                  the Company in writing that marketing factors require a limitation
                  of the
                  number of shares to be underwritten, then there shall be excluded
                  from
                  such registration and underwriting to the extent necessary to satisfy
                  such
                  limitation, shares held by the Holders, pro
                  rata to
                  the respective total number of shares held by each of the Holders;
                  provided
                  however, that
                  the Preferred Holders shall
                  have
                  preference over all other shareholders of the Company (including
                  the
                  Existing Shareholders) to register and to sell up to 80% (eighty
                  percent)
                  of the shares to be registered within such
                  registration.

              

      

       

      
        	 	
                2.3.

              	
                The
                  Holders shall be entitled to participate in an unlimited number
                  of
                  registrations under this Section 2.

              

      

       

      
        	
                3.

              	
                Demand
                  Registration.

              

      

       

      
        	 	
                3.1.

              	
                At
                  any time beginning six (6) months following the IPO, the Initiating
                  Holders may request in writing that all or part of their Registrable
                  Securities shall be registered for trading on any securities exchange
                  on
                  which the Company’s shares are otherwise traded, if at all. Within twenty
                  (20) days after receipt of any such request, the Company shall
                  give
                  written notice of such request to the other Holders and shall include
                  in
                  such registration all Registrable Securities held by all such Holders
                  who
                  wish to participate in such demand registration and provide the
                  Company
                  with written requests for inclusion therein within fifteen (15)
                  days after
                  the receipt of the Company’s notice. Thereupon, the Company shall effect
                  the registration of all Registrable Securities as to which it has
                  received
                  requests for registration for trading on the securities exchange
                  specified
                  in the request for registration. Notwithstanding any other provision
                  of
                  this Section 3, if the managing underwriter advises the Company
                  in writing
                  that marketing factors require a limitation of the number of shares
                  to be
                  underwritten, then there shall be excluded from such registration
                  and
                  underwriting to the extent necessary to satisfy such limitation,
                  first, shares other than Registrable Securities and other than
                  shares to be issued by the Company, on a pro rata basis, second,
                  shares which the Company may wish to register for its own
                  account,
                  and third, to the extent necessary, Registrable Securities
                  (pro rata to the number of such shares sought to be included by
                  each Holder in the offering), provided, however, that
                  the Preferred Holders shall have preference over all other shareholders
                  of
                  the Company (including the Existing Shareholders) to register and
                  to sell
                  up to 80% (eighty percent) of the shares to be registered within
                  such
                  registration and further provided that in any event all Registrable
                  Securities shall be included in such registration prior to any
                  other
                  shares of the Company.

              

      

       

      
        	 	
                3.2.

              	
                The
                  Company shall not be required to effect more than two (2) registrations
                  at
                  the request of the Initiating Holders under this Section
                  3.

              

      

       

      
        	 	
                3.3.

              	
                In
                  the event that an exclusion of Registrable Securities is required,
                  the
                  majority of the Initiating Holders shall be entitled to elect that
                  all
                  Registrable Securities will be withdrawn from the registration,
                  by written
                  notice to the Company and the underwriter, in which case such registration
                  shall
                  not
                  be counted under Section 3.2.

              

      

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                4.

              	
                Form
                  S-3.

              

      

       

      If
        the
        Company becomes eligible to use Form S-3, the Company shall use its best
        efforts
        to continue to qualify at all times for registration on such form. If and
        when
        the Company becomes entitled to use Form S-3, Holders who wish to register
        shares having a reasonable anticipated aggregate selling price of at least
        $750,000, shall have the right to request and have effected an unlimited
        number
        of registrations on such form. Such requests shall be in writing and shall
        state
        the number of shares of Registrable Securities to be disposed of and the
        intended method of disposition of such shares by such Holder or Holders.
        The
        Company shall give notice to the other Holders of the receipt of a request
        for
        registration pursuant to this Section 4 and shall provide a reasonable
        opportunity for such Holders to participate in the registration.

       

      
        	 	
                4.2.

              	
                Subject
                  to the foregoing, the Company will effect the registration of all
                  Registrable Securities on Form S-3 to the extent requested by the
                  Holder
                  or Holders thereof for purposes of disposition. If the Company
                  shall
                  furnish Holders requesting a registration pursuant to this Section
                  4 a
                  certificate signed by the Company’s Chief Executive Officer and Chairman
                  of the Board stating that in the good faith judgment of the Board
                  of
                  Directors of the Company, it would be seriously detrimental to
                  the Company
                  and its shareholders for such registration to be effected at such
                  time,
                  the Company shall have the right to defer such filing for a period
                  of not
                  more than sixty (60) days after receipt of the request of the requesting
                  Holders, provided that such a right to delay a request shall be
                  exercised
                  by the Company not more than once in any twelve (12) month
                  period.

              

      

       

      
        	 	
                4.3.

              	
                Notwithstanding
                  any other provision of this Section 4, if the managing underwriter
                  advises
                  the Company in writing that marketing factors require a limitation
                  of the
                  number of shares to be underwritten, then there shall be excluded
                  from
                  such registration and underwriting to the extent necessary to satisfy
                  such
                  limitation, first, shares other than Registrable Securities and
                  other than shares to be issued by the Company, on a pro rata
                  basis, second, shares which the Company may wish to register
                  for its own account, and third, to the extent necessary,
                  Registrable Securities (pro rata to the number of such shares
                  sought to be included by each Holder in the offering),
                  provided, however, that the Preferred Holders shall
                  have preference over all other shareholders of the Company (including
                  the
                  Existing Shareholders) to register and to sell up to 80% (eighty
                  percent)
                  of the shares to be registered within such registration and further
                  provided that that in any event all Registrable Securities shall
                  be
                  included in such registration prior to any other shares of the
                  Company.

              

      

       

      
        	 	
                4.4.

              	
                The
                  Holders shall be entitled to participate in an unlimited
                  number of registrations under this Section
                  4.

              

      

       

      
        	
                5.

              	
                Designation
                  of Underwriter.

              

      

       

      
        	 	
                5.1.

              	
                In
                  the case of any registration effected pursuant to Sections 3 and
                  4, (i)
                  the majority of the Holders participating therein shall have the
                  right to
                  designate the managing underwriter(s) in any underwritten offering,
                  who
                  shall be a prominent and reputable underwriter, with the approval
                  of the
                  Company, which may not be unreasonably withheld, and (ii) the Company
                  and
                  all Holders participating in such underwritten registration shall
                  enter
                  into an underwriting agreement in customary form with the underwriter
                  or
                  underwriters selected for such
                  underwriting.

              

      

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                5.2.

              	
                In
                  the case of any registration initiated by the Company, the Company
                  shall
                  have the right to designate the managing underwriter(s) in any
                  underwritten offering, and any Holders participating in such underwritten
                  registration shall enter into an underwriting agreement in customary
                  form
                  with the underwriter or underwriters selected for such
                  underwriting.

              

      

       

      
        	
                6.

              	
                Registration
                  Expenses.

              

      

       

      In
        the
        event of a registration described in Sections 2, 3, and 4, all reasonable
        expenses of registration and offering of the Holders participating in the
        offering including, but not limited to, printing expenses, filing and
        qualifications costs, fees and disbursements of counsel for the Holders,
        and
        independent public accountants, fees and expenses (including counsel fees
        incurred in connection with complying with state securities or “blue sky” laws,
        fees of the NASDAQ and fees of transfer
        agents
        and registrars), shall be borne by the Company, except that the Holders shall
        bear their pro rata underwriting commissions and fees and discounts attributable
        to their Registrable Securities being registered.

       

      
        	
                7.

              	
                Indemnification.

              

      

       

      In
        the
        event any shares are included in a registration statement in accordance
        herewith:

       

      
        	 	
                7.1.

              	
                To
                  the extent permitted by law, the Company will indemnify and hold
                  harmless
                  each one of the Holders, the partners, officers, directors and
                  shareholders of each one of the Holders, , any underwriter (as
                  defined in
                  the Securities Act) for such Holder and each person, if any, who
                  controls
                  such Holder or underwriter within the meaning of the Securities
                  Act or the
                  Exchange Act against any losses, expenses, claims, damages, or
                  liabilities
                  to which they become subject under the Securities Act, the Exchange
                  Act or
                  other United States federal or state laws, insofar as such losses,
                  expenses, claims, damages, or liabilities (or actions in respect
                  thereof)
                  arise out of or are based upon any of the following statements,
                  omissions
                  or violations (collectively a “Violation”):(i) any untrue statement of
                  a material fact contained in such
                  registration statement, final prospectus or any amendments or supplements
                  thereto; (ii) the omission or alleged omission to state therein
                  a material
                  fact required to be stated therein, or necessary to make the statements
                  therein not misleading in light of the circumstances under which
                  they were
                  made, or (iii) any violation or alleged violation by the Company
                  of the
                  Securities Act, the Exchange Act, any Federal or state securities
                  law or
                  any rule or regulation promulgated under the Securities Act, the
                  Exchange
                  Act or any federal or state securities law, or any rule or regulation
                  thereunder; and the Company will reimburse each such Holder, partner,
                  officer, director, shareholder, underwriter or controlling person
                  for any
                  legal or other expenses reasonably incurred by them in connection
                  with
                  investigating or defending any such loss, claim, damage, liability,
                  or
                  action, as such expenses are incurred;
                  provided, however, that the indemnity agreement
                  contained in this Section 7.1, shall not apply to amounts paid
                  in
                  settlement of any such loss, claim, damage, liability, or action
                  if such
                  settlement is effected without the consent of the Company (which
                  consent
                  shall not be unreasonably withheld), nor shall the Company be liable
                  to
                  each such Holder, partner, officer, director, shareholder, underwriter
                  or
                  controlling person in any such case for any such loss, claim, damage,
                  liability, or action to the extent that it arises out of or is
                  based upon
                  a Violation which occurs in reliance upon and in conformity with
                  written
                  information furnished to the Company expressly for use in connection
                  with
                  such registration by any such Holder, partner, officer, director,
                  shareholder, underwriter or controlling
                  person.

              

      

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                7.2.

              	
                To
                  the extent permitted by law, each selling Holder will indemnify
                  and hold
                  harmless the Company, each of its directors, each of its officers
                  who have
                  signed the registration statement, each person, if any, who controls
                  the
                  Company within the meaning of the Securities Act, any underwriter
                  (within
                  the meaning of the Securities Act) for the Company, any person
                  who
                  controls such underwriter, and any Holder selling securities in
                  such
                  registration statement or any directors or officers or any persons
                  controlling such parties, against any losses, claims, expenses,
                  damages
                  (including any amounts paid in any settlement effected with the
                  consent of
                  all of the selling shareholders), or liabilities to which any of
                  the
                  forgoing persons become subject under the Securities Act, the Exchange
                  Act
                  or other United States federal or state securities law, insofar
                  as such
                  losses, expenses, claims, damages, liabilities (or actions in respect
                  thereto) arise out of or are based upon any Violation (including
                  any
                  alleged Violation) in each case to the extent (and only to the
                  extent)
                  that such Violation occurs in reliance upon and in conformity with
                  written
                  information furnished to the Company by such Holder expressly for
                  use in
                  connection with such registration; and each such Holder will reimburse
                  any
                  persons intended to be indemnified pursuant to this Section 7.2
                  for any
                  legal or other expenses reasonably incurred by such person in connection
                  with investigating or defending any such loss, claim, damage, liability
                  or
                  action; provided, however, that the indemnity agreement
                  contained in this Section 7.2 shall not apply to amounts paid in
                  settlement of any such loss, claim, damage, liability or action
                  if such
                  settlement is effected without the consent of the relevant indemnifying
                  Holder(s), which consent shall not be unreasonably withheld; and
                  further provided, that in no event shall any indemnity by any Holder
                  under this Section 7.2 exceed the gross proceeds from the offering
                  received by such Holder; and provided further, that this
                  indemnity shall not relieve any underwriter any of its due diligence
                  obligations.

              

      

       

      
        	 	
                7.3.

              	
                Promptly
                  after receipt by an indemnified party under this Section 7.3 of
                  notice of
                  the commencement of any action (including any governmental action),
                  such
                  indemnified party will, if a claim in respect thereof is to be
                  made
                  against any indemnifying party under this Section 7, notify the
                  indemnifying party in writing of the commencement thereof and the
                  indemnifying party shall have the right to participate in, and,
                  to the
                  extent the indemnifying party so desires, jointly with any other
                  indemnifying party similarly noticed, to assume the defense thereof
                  with
                  counsel mutually satisfactory to the parties;
                  provided, however, that an indemnified party (together
                  with all other indemnified parties that may be represented without
                  conflict by one counsel) shall have the right to retain its one
                  separate
                  counsel, with the reasonable fees and expenses to be paid by the
                  indemnifying party, if representation of such indemnified party
                  by the
                  counsel retained by the indemnifying party would be inappropriate
                  due to
                  actual or potential differing interests between such indemnified
                  party and
                  any other party represented by such counsel in such proceeding.
                  The
                  failure to notify an indemnifying party in writing within a reasonable
                  time of the commencement of any such action, if materially prejudicial
                  to
                  its ability to defend such action, shall relieve such indemnifying
                  party
                  of any liability to the indemnifying party under this Section 7,
                  but the
                  omission to so deliver written notice to the indemnifying party
                  will not
                  relieve it of any liability that it may have to any indemnified
                  party
                  otherwise than under this Section
                  7.

              

      

      
        
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                7.4.

              	
                If
                  the indemnification provided for in this Section 7 is held by a
                  court of
                  competent jurisdiction to be unavailable to an indemnified party
                  with
                  respect to any loss, liability, claim, damage or expense referred
                  to
                  herein, then the indemnifying party, in lieu of indemnifying such
                  indemnified party hereunder, shall contribute to the reasonable
                  amount
                  paid or payable by such indemnified party as a result of such loss,
                  liability, claim, damage or expense in such proportion as is appropriate
                  to reflect the relative fault of the indemnifying party on the
                  one hand
                  and of the indemnified party on the other in connection with the
                  statements or omissions that resulted in such loss, liability,
                  claim,
                  damage or expense, as well as any other relevant equitable considerations.
                  The relative fault of the indemnifying party and of the indemnified
                  party
                  shall be determined by reference to, among other things, whether
                  the
                  untrue or alleged untrue statement of a material fact or the omission
                  to
                  state a material fact relates to information supplied by the indemnifying
                  party or by the indemnified party and the parties’ relative intent,
                  knowledge, access to information, and opportunity to correct or
                  prevent
                  such statement or omission.

              

      

       

      
        	 	
                7.5.

              	
                Notwithstanding
                  the foregoing, to the extent that the provisions relating to
                  indemnification and contribution contained in the underwriting
                  agreement
                  entered into in connection with the underwritten public offering
                  are in
                  conflict with the foregoing provisions, the provisions in the underwriting
                  agreement shall control.

              

      

       

      
        	 	
                7.6.

              	
                The
                  obligations of the Company and the Holders under this Section 7
                  shall
                  survive the completion of any offering of Registrable Shares in
                  a
                  registration statement under this
                  Agreement.

              

      

       

      
        	
                8.

              	
                Obligations
                  of the Company.

              

      

       

      Whenever
        required under this Agreement to effect the registration of any Registrable
        Securities, the Company shall, as expeditiously as possible:

       

      
        	 	
                8.1.1.

              	
                prepare
                  and file with the SEC a registration statement with respect to
                  such
                  Registrable Securities and shall use its best efforts to cause
                  such
                  registration statement to become effective, and, upon the request
                  of the
                  holders of a majority of the Registrable Securities registered
                  thereunder,
                  keep such registration statement effective for a period of up to
                  nine (9)
                  months or, if sooner, until the distribution contemplated in the
                  registration statement has been
                  completed.

              

      

       

      
        	 	
                8.1.2.

              	
                prepare
                  and file with the SEC such amendments and supplements to such registration
                  statement and the prospectus used in connection with such registration
                  statement as may be necessary to comply with the provisions of
                  the
                  Securities Act with respect to the disposition of all Registrable
                  Securities covered by such registration
                  statement.

              

      

       

      
        	 	
                8.1.3.

              	
                furnish
                  to the Holders, such numbers of copies of a prospectus, including
                  a
                  preliminary prospectus, in conformity with the requirements of
                  the
                  Securities Act, and such other documents as they may reasonably
                  request in
                  order to facilitate the disposition of Registrable Securities owned
                  by
                  them.

              

      

      
        
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                8.1.4.

              	
                use
                  all reasonable efforts to register and qualify the securities covered
                  by
                  such registration statement under such other securities or Blue
                  Sky laws
                  of such jurisdictions as shall be reasonably requested by the Holders,
                  provided that the Company shall not be required in connection therewith
                  or
                  as a condition thereto to qualify to do business or to file a general
                  consent to service of process in any such states or
                  jurisdictions.

              

      

       

      
        	 	
                8.1.5.

              	
                in
                  the event of any underwritten public offering, enter into and perform
                  its
                  obligations under an underwriting agreement, in usual and customary
                  form,
                  with the managing underwriter of such offering. Each Holder, participating
                  in such underwriting shall also enter into and perform its obligations
                  under such an agreement.

              

      

       

      
        	 	
                8.1.6.

              	
                notify
                  each Holder covered by such registration statement at any time
                  when a
                  prospectus relating thereto is required to be delivered under the
                  Securities Act of the happening of any event as a result of which
                  the
                  prospectus included in such registration statement, as then in
                  effect,
                  includes an untrue statement of a material fact or omits to state
                  a
                  material fact required to be stated therein or necessary to make
                  the
                  statements therein not misleading in the light of the circumstances
                  then
                  existing.

              

      

       

      
        	 	
                8.1.7.

              	
                cause
                  all Registrable Securities registered pursuant thereunder to be
                  listed on
                  each securities exchange on which similar securities issued by
                  the Company
                  are then listed.

              

      

       

      
        	 	
                8.1.8.

              	
                provide
                  a transfer agent and registrar for all Registrable Securities registered
                  pursuant hereunder and a CUSIP number for all such Registrable
                  Securities,
                  in each case not later than the effective date of such
                  registration.

              

      

       

      
        	 	
                8.1.9.

              	
                furnish,
                  at the request of any Holder requesting registration of Registrable
                  Securities pursuant to this Agreement, on the date that such Registrable
                  Securities are delivered to the underwriters for sale in connection
                  with a
                  registration pursuant to this Agreement, if such securities are
                  being sold
                  through underwriters, or, if such securities are not being sold
                  through
                  underwriters, on the date that the registration statement with
                  respect to
                  such securities becomes effective, (i) an opinion, dated such date,
                  of the
                  counsel representing the Company for the purposes of such registration,
                  in
                  form and substance as is customarily given to underwriters in an
                  underwritten public offering, addressed to the Holder and to the
                  underwriters, if any, and (ii) a letter dated such date, from the
                  independent certified public accountant of the Company, in form
                  and
                  substance as is customarily given by independent certified public
                  accountants to underwriters in an underwritten public offering,
                  addressed
                  to the Holder and to the underwriters, if
                  any.

              

      

      
        
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                9.

              	
                Rule
                  144 Reporting.

              

      

       

      With
        a
        view to making available to the Holders the benefits of SEC Rule 144 promulgated
        under the Securities Act and any other rule or regulation of the SEC that
        may at
        any time permit a Holder to sell securities of the Company to the public
        without
        registration or pursuant to a registration on Form S-3 (for purposes hereof,
        collectively, “Rule
        144”),the
        Company agrees to:

       

      
        	 	
                9.1.

              	
                use
                  its best efforts to make and keep public information available,
                  as those
                  terms are understood and defined in Rule 144, at all times after
                  the
                  effective date of the IPO;

              

      

       

      
        	 	
                9.2.

              	
                use
                  its best efforts to file with the SEC in a timely manner all reports
                  and
                  other documents required by the Company under the Securities Act
                  and the
                  Exchange Act; and

              

      

       

      
        	 	
                9.3.

              	
                furnish
                  to any Holder, so long as the Holder owns any Registrable Securities,
                  forthwith upon request: (i) a written statement by the Company
                  that it has
                  complied with the foregoing subsections 9.1 and 9.2, and with any
                  other
                  reporting requirements of the 1934 Act which may apply; (ii) a
                  copy of the
                  most recent annual or quarterly report of the Company and such
                  other
                  reports and documents so filed by the Company, and (iii) such other
                  information as may be reasonably requested in availing any Holder
                  of any
                  rule or regulation of the SEC permitting the selling of any such
                  securities without registration or pursuant to such
                  form.

              

      

       

      
        	
                10.

              	
                Assignment
                  of Registration Rights.

              

      

       

      Any
        of
        the Holders may assign its rights
        to
        cause
        the Company to register shares pursuant to this Agreement to a transferee
        or
        transferees of all or any part of its Registrable Securities, and such
        transferor shall use its best efforts to furnish the Company within twenty
        (20)
        days after such transfer with written notice of the name and address of such
        transferee and the securities with respect to which such registration rights
        are
        being assigned, and the transferee’s written agreement to be bound by this
        Agreement.

       

      
        	
                11.

              	
                Subsequent
                  Grants of Rights.

              

      

       

      The
        Company shall not grant registration rights that are more favorable than
        the
        registration rights granted herein, to any shareholder of the Company (excluding
        the rights granted to the Holders herein), unless such grant of registration
        rights was approved in accordance with the provisions of Section 16.2 below
        relating to amendment termination or waiver of any term of this
        Agreement.

      
        
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                12.

              	
                Lock-Up.

              

      

       

      In
        any
        registration of the Company’s shares, the Holders agree that any sales of shares
        held by them may be subject to a “lock-up” period restricting such sales for up
        to six (6) months following the IPO or 3 months for any other registration
        and
        the Holders will agree to abide by such customary “lock-up” period within the
        foregoing time limits as is required by the underwriter in such registration
        and
        to execute such customary form of “lock-up” agreement as may be requested by the
        underwriter, provided
        that all
        directors and officers of the Company also agree to be abide by such “lock up”.
        Any discretionary release from the lock-up shall be allocated to the holders
        of
        Registrable Securities on a pro-rata basis.

       

      
        	
                13.

              	
                Registrations
                  outside the US.

              

      

       

      The
        provisions of this Agreement shall also apply in connection with any
        registration, listing or public offering of the Company’s securities outside of
        the U.S., mutatis
        mutandis.

       

      
        	
                14.

              	
                Governing
                  Law and Jurisdiction; Remedies.

              

      

       

      
        	 	
                14.1.

              	
                This
                  Agreement shall be governed by and interpreted in accordance with
                  the laws
                  of the State of Israel, without giving effect to the rules respecting
                  conflict of law.

              

      

       

      
        	 	
                14.2.

              	
                In
                  the event of any controversy or claim arising under, out of, or
                  in
                  connection with this Agreement, its validity, its interpretation,
                  its
                  execution or any breach or claimed breach thereof (a “Claim”),the
                  Company and the Holders undertake to attempt to amicably resolve
                  the Claim
                  internally. In the event such attempt does not succeed within 30
                  days, as
                  determined by the Company or any of the Holders, the Company or
                  any of the
                  Holders shall be entitled to exercise any available remedy under
                  law.

              

      

       

      
        	 	
                14.3.

              	
                Any
                  Claim shall be settled by a single arbitrator, selected by mutual
                  consent
                  and, failing such consent, the arbitrator shall be Yigal Arnon,
                  Adv., and
                  if he shall not accept the appointment, Ram Caspi, Adv., and if
                  he shall
                  not accept the appointment, Ya’akov Ne’eman, Adv. (the “Arbitrator”).
                  The Arbitrator shall confirm that he is not related to a party
                  to the
                  Claim. The arbitration shall take place in Tel Aviv, Israel, in
                  the Hebrew
                  language. The Arbitrator shall be exempt from the civil procedure
                  rules
                  and the rules of evidence, but shall be bound by substantive law
                  and by
                  the duty of citing grounds for his ruling, and he shall have to
                  hand down
                  his decision with respect to the dispute within ninety (90) days
                  of the
                  date on which the dispute was submitted to him. The Arbitrator
                  shall
                  be
                  authorized to issue injunctions and interim orders. The execution
                  of this
                  Agreement by the parties shall
                  be
                  deemed the execution of an arbitration agreement as required by
                  the
                  Israeli Arbitration Law, 5728-1968.

              

      

       

      
        	 	
                14.4.

              	
                In
                  the event that none of the aforesaid persons shall accept the appointment
                  as Arbitrator, the competent courts in Tel Aviv shall have sole
                  and
                  exclusive jurisdiction over any dispute between the parties, as
                  set forth
                  above.

              

      

       

      
        	 	
                14.5.

              	
                In
                  case any one or more of the covenants and/or agreements set forth
                  in this
                  Agreement shall have been breached by any party hereto, the other
                  parties
                  may proceed to protect and enforce their rights either by suit
                  in equity,
                  including an action for specific performance, injunctive relief
                  and other
                  forms of equitable relief (without posting any bond and without
                  proving
                  that damages would be inadequate) of any such covenant or agreement
                  contained in this Agreement. All remedies hereunder shall be cumulative
                  and the election of any one remedy shall not preclude any other
                  remedy.

              

      

      
        
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                15.

              	
                Notices.
                  Any notice, declaration or other communication required or authorized
                  to
                  be given by any party under this Agreement to any other party shall
                  be in
                  writing and shall be personally delivered, sent by facsimile transmission
                  (with telephone confirmation) or dispatched by courier addressed
                  to the
                  other party at the address stated below or such other address as
                  shall be
                  specified by the parties hereto by notice in accordance with the
                  provisions of this Section. Any notice shall operate and be deemed
                  to have
                  been served, if personally delivered or sent by fax on the next
                  following
                  business day, and if by courier, on the fifth following business
                  day:

              

      

       

      
        	 	
                15.1.

              	
                The
                  Company’s address for the purposes of this Section 15 shall be the address
                  set forth in the preamble hereto, with a copy
                  to:

              

      

       

      Zysman,
        Aharoni, Gayer & Co. Advocates

      52A
        Hayarkon St., Tel Aviv

      63432,
        Israel

      Fax:
        +972-3-7955550

      Attn:
        Shy
        Baranov, Adv.

       

      
        	 	
                15.2.

              	
                The
                  Holders’ addresses for the purposes of this Section 11 shall be the
                  addresses set
                  forth in Schedule 1 hereto, with a copy
                  to:

              

      

       

      Danziger,
        Klagsbald, Rosen & Co.

      28
        Bezalel Street

      Ramat
        Gan
        52521, Israel

      Fax:
        972+3-611-0707

      Attn:
        Joeri Kreisberg, Adv.

       

      
        	
                16.

              	
                Miscellaneous.

              

      

       

      
        	 	
                16.1.

              	
                This
                  Agreement constitutes the entire agreement between the parties
                  with regard
                  to the subject matter hereof and supersedes any previous agreement
                  among
                  the parties with respect to such subject matter, including without
                  limitation, Exhibit 12 to that certain Shareholders Agreement,
                  dated January 15, 2001.

              

      

       

      
        	 	
                16.2.

              	
                Any
                  term of this Agreement may be amended, terminated or waived only
                  with the
                  consent of the holders of a majority of 75% (seventy five percent)
                  of the
                  Preferred Shares (for purposes of this sub-clause 16.2, and only
                  for
                  purposes
                  hereof, the term “Preferred Shares” shall also include the holdings of
                  Koor and Sadot (and their Permitted Transferees), so that Koor
                  and Sadot
                  shall be considered as part of the holders of Preferred Shares),
                  and the
                  Company and evidenced by a document in writing specifically referring
                  to
                  this Agreement.

              

      

       

      
        	 	
                16.3.

              	
                The
                  failure or delay of either party hereto at any time or times to
                  require
                  performance
                  of
                  any provisions hereof shall in no manner affect this right at a
                  later
                  time. No waiver by any party hereto of a breach of any term contained
                  in
                  this Agreement, in any one or more instance, shall be deemed or
                  construed
                  as a further or continuing waiver of any such breach or a waiver
                  of a
                  breach of any other form.

              

      

      
        
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                16.4.

              	
                The
                  rights and duties of each Holder as set forth herein may be freely
                  assigned, in whole or in part, by such shareholder subject only
                  to any
                  limitations applying to the transfer of shares by such shareholder,
                  as set
                  forth herein or in the Articles of Association of the
                  Company.

              

      

       

      
        	 	
                16.5.

              	
                If
                  any provision of this Agreement is held by a court of competent
                  jurisdiction to be unenforceable under applicable law, then such
                  provision
                  shall be excluded from this Agreement and the remainder of this
                  Agreement
                  shall be interpreted as if such provision were so excluded and
                  shall be
                  enforceable in accordance with its terms; provided, however,
                  that in such event this Agreement shall be interpreted so as to
                  give
                  effect, to the greatest extent consistent with and permitted by
                  applicable
                  law, to the meaning and intention of the excluded provision as
                  determined
                  by such court of competent
                  jurisdiction.

              

      

       

      
        	 	
                16.6.

              	
                For
                  purposes of computing any minimum shareholding required for any
                  purposes
                  under this Agreement, each Preferred Holder and its Permitted Transferees
                  (as such term is defined in the Articles of Association of the
                  Company)
                  shall be entitled to aggregate their holdings in order to be considered
                  one shareholder.

              

      

       

      
        	 	
                16.7.

              	
                Each
                  of the parties shall take such actions, including the execution
                  and
                  delivery of further instruments and voting its shares in the Company,
                  as
                  may be necessary to give full effect to the provisions hereof and
                  to the
                  intent of the parties hereto.

              

      

       

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      Schedule
        1

       

      

      
        	
                Investor

                 

              	
                Address

              
	
                Koor
                  Holdings

              	
                14
                  Hamelacha Street, Rosh Ha’Ayin 48091, Israel

              
	 	 
	
                Koor
                  Corporate Venture Capital
                  L.P.

              	
                14
                  Hamelacha Street, Rosh Ha’Ayin 48091, Israel

              
	 	 
	
                Sadot
                  Research and Development

                Fund
                  Ltd

              	
                Moshe
                  Aviv Tower, 7 Jabotinsky St. Ramat Gan

                52117,
                  Israel

              
	 	 
	
                David
                  Mahlab

              	
                10
                  Ha’amal Street, Rosh Ha’Ayin, Israel

              
	 	 
	
                Formula
                  Venture II L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Formula
                  Ventures Israel II L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Formula
                  Ventures II (A.I.) L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Shrem,
                  Fudim, Kelner Trust Co. Ltd

              	
                21
                  Haarbaa St., Tel Aviv 64739

              
	 	 
	
                Yossi
                  Vardi

              	
                12
                  Shamir St., Tel Aviv 69693

              
	 	 
	
                Catalyst
                  Investments L.P.

              	
                3
                  Daniel Frish St., Tel Aviv 64731

              
	 	 
	
                Vertex
                  Israel II (A) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (CI) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (B) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II Discount fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (C.I.) Executive Fund

                L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Sub) LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Sub) Non-Q LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Investors) LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Principals Fund III (Israel)

                LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                Trusts
                  2000 Ltd.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  JP Morgan Fund III (Israel)

                LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Genesis
                  Partners II L.D.C.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Genesis
                  Partners II (Israel) L.P.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Zohar
                  Zisapel

              	
                24
                  Raul Wallenberg St., Tel Aviv

              

      

       

      

      
        
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