Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is mad and entered into as of
July 1, 2001 by and among (i) Lumenis Inc., with its principal offices at 375
Park Avenue, New York, NY, U.S.A., and MR. SAGI GENGER (the "Executive"), of the
second party.

     WHEREAS, the Companies desire to employ and secure for themselves the
services of the Executive upon the terms and subject to the conditions specified
herein, and

     WHEREAS, the Executive will provide his services pursuant to this Agreement
to the company,

     WHEREAS, the Executive desires to accept employment with the Company upon
the terms and subject to the conditions specified herein.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants,
terms and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt of which is hereby specifically acknowledged, the
parties hereto agree as follows:

     1. EMPLOYMENT. Each of the Companies hereby employs the Executive in the
capacity of the Chief Operating Officer of the Company, upon the terms and
subject to the conditions set forth below. The Executive hereby accepts
employment with each Company in such capacity upon the terms and subject to the
conditions set forth below.

     2. DUTIES. (a) The Executive agrees to devote his full business time
(except for certain exceptions as approved from time to time by the CEO),
attention, best efforts and ability to the affairs of the Companies, as set
forth in the preamble of this Agreement. He shall report to the Chief Executive
Officer of Lumenis (the "CEO). The Executive shall have responsibility for the
business affairs of the Companies and the other group companies, with the powers
and duties as customarily assigned to such office and/or as otherwise may be
defined by the CEO from time to time.

          (b) The Executive acknowledges that his capacity is fiduciary position
     and requires a special degree of trust, his duties and responsibilities may
     entail irregular work hours and extensive traveling and relocation, for
     which he is adequately rewarded by the compensations provided for in this
     Agreement, and that accordingly any U.S. federal or state labor law will
     not apply to his employment with the Company.

          (c) When the Executive performs services for the Companies, the
     Executive shall be, at all times, an employee of the Company. While
     performing such services, the Executive shall not engage in any activities
     that may interfere or conflict with the proper discharge of his duties.

     3. TERMS AND TERMINATION. The term of this Agreement shall commence on July
1, 2001 and shall continue in full force and effect until terminated pursuant to
the terms hereof.

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          (a) The Agreement and the Executive's employment may be terminated (A)
     at any time at the option of either the Executive or both Companies
     jointly, and subject to a ninety (90) days prior written notice ("Prior
     Notice"); (B) upon the death of the Executive; (C) in the event of the
     inability of the Executive to perform his duties hereunder, whether by
     reason of injury (mental or physical), illness or otherwise, incapacitating
     the Executive for a continuous period exceeding 45 days or non-consecutive
     45 days in any six month period; or (D) for cause. For purposes of this
     Agreement, an event or occurrence consisting "cause" includes, but is not
     limited to:

              (i)   The Executive's failure or refusal to perform specific
                    directives of his superior;

              (ii)  Dishonesty of the Executive affecting the Companies;

              (iii) The Executive's conviction of a felony or any crime
                    involving moral turpitude, fraud or misrepresentation;

              (iv)  Any gross negligence or willful conduct of the Executive
                    resulting in material loss to the Companies or any of its
                    affiliates or material damage to the reputation of the
                    Companies or any of its affiliates;

              (v)   Any material breach of any of the provisions of this
                    Agreement.

          (b) In the event of a termination of this Agreement and the
     Executive's employment by the Companies pursuant to a Prior Notice, the
     Companies shall only be obligated to pay (i) Executive's base salary and
     benefits through the Prior Notice period specified above, provided that the
     Executive continues his employment obligations through such period, and
     (ii) the lump sum severance payment to which the Executive shall be
     entitled pursuant to any applicable law, but in not event less than the
     last month's base salary per each 12-month period f the Executive's
     employment with the Company and a pro-rata portion for any shorter period
     since the last anniversary of the Executive's employment prior to the
     effective date of such termination ("Severance Payment"). Such payments
     shall be less deductions for all applicable taxes and withholdings. The
     Companies shall have no further obligation to make any salary payments or
     provide any benefits to the Executive after the expiration of such Prior
     Notice period, except as required by applicable law. Notwithstanding the
     foregoing, either company may, in its sole discretion, elect not to require
     the services of the Executive during the Prior Notice period, but shall
     continue to pay the Executive's base salary and benefits through such
     period.

     4. BASE SALAARY. As compensation for services rendered hereunder, the
Company shall pay the Executive, in allocation between them as set forth in the
preamble of this Agreement an annual base salary of U.S. $250,000 (two hundred
and fifty thousand United States Dollars), less deductions for all applicable
taxes and withholdings, payable in twelve equal monthly installments in
conformance with the regular payroll dates and practices for salaried personnel
f the Company during the term of the Agreement. The Executive's salary level
shall be reviewed by the CEO annually or at such other times as the CEO shall
determine. The Company and the Executive shall reconcile any difference between
all advances on account of salary made to the Executive prior to the date of
this Agreement and any balance, if in the

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Executive's favor, shall be paid to the Executive, and if in the Company's
favor, shall be credited against future salaries.

     5. BENEFITS. In addition to the compensation set forth in paragraph 5
above, the Executive shall receive the following benefits, and only such
benefits, from the Companies (less deduction for all applicable taxes and
withholdings), it being understood that any wage-based benefits shall be
calculated exclusively on the basis of the base salary (without consideration to
any other benefit);

          (a) VACATION. The executive shall be entitled to twenty (20) business
     days of vacation per year in accordance with Company's policy. The specific
     dates of such vacations shall be coordinated in advance with the CEO. The
     Executive shall not be entitled to accumulate or to redeem any unused
     vacation days in excess of an aggregate of forty days.

          (b) CERTAIN SOCIAL BENEFITS. The Companies shall grant the Executive
     with all social benefits, such as pension, life insurance, health
     insurance, disability insurance, certain saving programs and others as are
     granted to the Company's senior executives in the Executive's rank and
     under their usual terms pursuant to the Company's current policy (including
     the employees' participation therein).

     Such benefits shall include, but not be limited to, 401(k) participation
plan.

          (c) PERFORMANCE BONUS. As an Executive Officer of the Company you will
     be eligible to participate in the Company Bonus Plan for Executive Officers
     at a 100% base participation rate for meeting 100% targets such as revenue,
     profit and other targets as will be set by the CEO. For extraordinary
     performance, bonus may reach up to 200% participation rate. The Plan is
     specifically designed to reward participants based upon the attainment of
     Corporate and personal performance.

          (d) SPECIAL INTEGRATION BONUS. Upon achievement of corporate
     integration objectives as set up by Lumenis management, the following
     bonuses will apply:

     $450,000 paid within 10 business days of announcement of the FY 2002
results based upon the EBITDA schedule for 2002:

             EBTDA 2002:        $80 mm      $100 mm     $120

             Percentage:        70%         100%        160%

      A grant of 35,000, 10 year options, to fully vest on 12/31/2007,
irrespective of performance.

      The exercise price of such options will be $24.90.
However vesting of the grant or a portion thereof will accelerate to the
following vesting dates based upon the following schedule:

      EBITDA FY 2002:        $80.mm      $100mm     $120mm

      12/31/2003:            30%         50%        50%

      12/31/2004:            30%         50%        50%

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          (e) CERTAIN REIMBURSEMENTS. The Executive shall be entitled to full
     reimbursement from the Company for expenses incurred during the performance
     of his duties upon submission of substantiating documents, according to the
     Company's standard policy. Without limiting the above, the Company shall,
     during the term of this Agreement reimburse the Executive for all payments
     actually made by him in leasing a car for his personal use together with
     all reasonable expenses of maintaining and operating such car and (ii) in
     the use of his home and mobile telephones.

     6. CONFIDENTIAL INFORMATION. The executive agrees not to divulge or use,
except in furtherance of the Companies' business an any time during his
employment or after the termination of his employment with the Companies, any
confidential and other proprietary information ("Confidential Information")
obtained at any time, disclosed to the Executive or developed by the Executive
in the course of the Executive's employment with the Companies or regarding the
business of either the Companies, its subsidiaries, affiliates, or any of its
customers, except that the Executive may disclose certain necessary information
to co-workers employed at the Companies and to third parties when required to do
so in connection with the performance of his duties hereunder. "Confidential
Information" shall mean information which is not known to the public and shall
include, but not be limited to, trade secrets, know-how, data, technical or
non-technical, whether written, graphic or oral, the names and addresses of
prospective or existing investors, customers, supply sources, ideas, financial
information, operations policies, marketing strategies, business development
plans, corporate assets, financial forecasts, and historical financial results.

     7. COVENANT NOT TO SOLICIT BUSINESS. (a) Upon termination of this Agreement
the Executive agrees that for a period of two (2) years he will not directly or
indirectly solicit any business from individuals or entities that are customers
at the time of the termination of this Agreement of the Companies, any of its
subsidiaries or affiliates, without the prior written consent of the Board.

          (a) For a period of two (2) years from the ate of termination of this
     Agreement without the prior written consent of the board, the Executive
     shall not employ, offer to employ, or in any way directly or indirectly
     solicit or see to obtain or achieve the employment of any person employed
     by either the Companies, its subsidiaries, affiliates, or any successors,
     or assigns thereof now or during a two (2) year period from the date of the
     Executive's termination of employment, except for those executives who have
     left the Companies, its subsidiaries, affiliates, or any successors or
     assigns thereof more than one (1) year prior to the date of the Executive's
     termination of employment with the Companies.

          (b) For a period of two (2) years from the date of termination of this
     Agreement, without the prior written consent of the Board of the Committee,
     the Executive shall not participate, directly or indirectly (whether as
     advisor, principal, agent, partner, officer, director, employee,
     stockholder, associate or consultant of), in any Business Entity (except
     for an interest of less than 5% in any entity whose securities are traded
     in any exchange). For purposes of this paragraph 7(c), the term "Business
     Entity" shall mean any person, partnership,

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     corporation or other business entity that at the time of the Executive's
     involvement with the Companies is involved in any competition with any
     business carried on by the Companies or its affiliates or subsidiaries
     prior to the date of this Agreement or hereafter conducted by the
     Companies or its affiliates or subsidiaries during the term of this
     Agreement anywhere in the world.

          (c) The parties hereto agree that the duration and area for which the
     covenant not to compete set forth in paragraph 7(c) above is to b effective
     and reasonable in terms of their geographical and temporal scope. In the
     event that any court determines that the time period and/or area are
     unreasonable and that such covenant is to that extent unenforceable, the
     parties hereto agree that such covenant shall remain in full force and
     effect for the greatest period of time and in the greatest geographical
     area that would not render it unenforceable. In addition, the Executive
     acknowledges and agrees that a breach of paragraph 6 or sections (1), (b)
     or (c)of this paragraph 7 shall cause irreparable harm to the Companies,
     its subsidiaries, and/or its affiliates and that the Companies shall be
     entitled to specific performance of this Agreement or an injunction without
     proof of special damages, together with the costs and reasonable attorney's
     fees and disbursements incurred by the Companies in enforcing their rights
     under paragraph 6 and this paragraph 7.

     8. INTELLECTUAL PROPERTY ASSIGNMENT. Any invention or know-how which shall
occur to the Executive during the period of his employment relating to the
business of the Companies or the use of any of its technologies, notwithstanding
that it is perfected or reduced to specific form at any time thereafter provided
that its conception arose during such period, including all rights therein and
in any patent or other form of legal protection with respect thereto, shall
become the sole property of the Companies, without need for any specific action
or notice or any consideration to the Executive other than as provided for by
this Agreement.

     9. DEDUCTIONS AND WITHHOLDINGS. The Company shall be entitled to deduct and
withhold from any amount payable to the Executive, whether pursuant to this
Agreement or otherwise, any and all taxes, withholdings or other payments as
required under any applicable law.

     10. NO ASSIGNMENT BY EXECUTIVE. The Executive shall have no right to assign
any of the rights or to delegate any of the duties created by this Agreement and
any assignment or attempted assignment of the Executive's rights, and any
delegation or attempted delegation of the Executive's duties, shall be null and
void. The Companies retain the right at any time to assign any of its rights or
delegate any of its duties under this Agreement.

     11. CONDITIONS. The Executive represents that he has full authority to
enter into this Agreement and that the performance of his duties under this
Agreement will not interfere with or violate the terms of any other agreement,
arrangement or understanding.

     12. BENEFIT. Except as otherwise expressly provided herein, this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, beneficiaries, personal representatives, successors and
assigns.

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     13. NOTICES. All notices hereunder shall be in writing and delivered by
hand or faxed or mailed to the address stated below of the party to which such
notice is given, or to such changed address as such party shall have given to
the other party by written notice provided, however, that any notice of change
of address shall be effective only upon receipt by the other party.

         To the Company:

         Lumenis Inc.
         375 Park Avenue
         New York, NY  10019
         Attention:  Chief Executive Officer

         To Executive:

         c/o Trans-Resources, Inc.
         375 Park Avenue
         New York, NY  10019

     14. SEVERABILITY OF PROVISIONS. If any of the provisions of this Agreement
is held invalid, such provisions shall be severed and the remainder of the
Agreement shall remain in force and shall not be affected thereby.

     15. NO ORAL CHANGES. This instrument constitutes and contains the entire
Agreement between the parties except as otherwise expressly stated herein. This
Agreement may be changed only in writing, and must be signed by the party
against whom enforcement of any waiver, modification, discharge or other change
is sought.

     16. WAIVER. Neither party's failure to insist upon strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.

     17. ENTIRE AGREEMENT. The Agreement contained in this instrument supersedes
and cancels any and all prior agreements between the parties hereto, express or
implied, written or oral, relating to the subject matter hereof. This Agreement
sets forth the entire agreement between the parties hereto with respect to the
subject matter hereof.

     18. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Israel.
Any litigation concerning any claims under or breach of this Agreement shall be
brought exclusively in the competent courts of the Tel-Aviv-Jaffa District.

     19. DESCRIPTIVE HEADINGS. The paragraph headings contained herein are for
reference purposes only and shall not in any way affect th3e meaning or
interpretation of this Agreement.

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     20. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all such counterparts shall constitute
one and the same instrument.

     IN WITNESS WHEREOF, the Company and the Executive have executed this
Employment Agreement, as of the day and year first above written.

                                    Lumenis Ltd.

                                    By: /s/ Yacha Sutton
                                        --------------------------------
                                        Yacha Sutton
                                        Chief Executive Officer

                                    /s/ Sagi Genger
                                    --------------------------------
                                    Sagi Genger

                                     - 7 -Exhibit 10.2

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT made as of, June 1, 2002 by and between LUMENIS LTD. (the
"Pledgee") and its officer SAGI AVI GENGER (the "Pledgor") (the "Agreement"),

                              W I T N E S S E T H :

     WHEREAS, Pledgee guaranteed a loan of $2,000,000 (Two Million US dollars)
made to Pledgor by Signature Bank (respectively the "Loan" and the "Bank"), as
evidenced by a Loan Agreement dated May 21, 2001, in connection with the
relocation of the Pledgor to the US and the Pledgor's acquisition of his
residential premises situated in New York, NY and has delivered to the Bank its
guarantee in the form of a Standby Letter of Credit, attached hereto as Exhibit
A (the "Guarantee");

     WHEREAS, Pledgee conditioned the extension of the Guarantee on the pledge
by Pledgor to Pledgee of certain shares of stock of Pledgee as security for
amounts payable pursuant to the Guarantee;

     NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as hereinafter set forth:

     SECTION 1. Definitions.

          (a) "Pledged Stock" shall mean the shares described in Schedule 1
     hereto, together with all certificates, options, rights, or other
     distributions issued as an addition to, in substitution or in exchange for,
     or on account of, any such shares, and all proceeds of all of the
     foregoing, now or hereafter owned or acquired by the Pledgor, including,
     without limitation, all dividend thereon or distribution in respect
     thereof.

          (b) "Indebtedness" shall mean such obligations as Pledgor shall have
     to Pledgee for all amounts paid or payable pursuant to the Guarantee.

     SECTION 2. Pledge.

          (a) As security for the prompt satisfaction of the Indebtedness, the
     Pledgor hereby pledges and delivers as security to the Pledgee the Pledged
     Stock with attendant stock powers endorsed in blank (with signature
     guaranteed) and grants the Pledgee a first priority lien thereon and
     security interest therein.

          (b) Upon the occurrence of any event as a result of which any amount
     is paid pursuant to the Guarantee ("Guarantee Payment Event"), which amount
     shall not have been returned to Pledgee within 15 business days, the
     Pledgee may, without demand of performance or other demand, advertisement,
     or notice of any kind to or upon the Pledgor or any other person (all of
     which are hereby expressly waived by the Pledgor) forthwith realize upon
     the Pledged Stock or any part thereof, and may forthwith (i) retain

<PAGE>

     the Pledged Stock for its own account or (ii) subject to compliance with
     applicable securities laws, sell or otherwise dispose of and deliver the
     Pledged Stock or any part thereof or interest therein, or agree to do so,
     in one or more parcels at public or private sale or sales, at such prices
     and on such terms as it may deem best, for cash or on credit, or for future
     delivery without assumption of any credit risk, with the right to the
     Pledgee or any purchaser to purchase upon any such sale the whole or any
     part of the Pledged Stock free of any right or equity of redemption in the
     Pledgor, which right or equity is hereby expressly waived and released; and
     apply such Pledged Stock or the proceeds of any such sale to make itself
     whole for amounts paid pursuant to the Guarantee and all costs and expenses
     (including reasonable counsel fees) incurred in any such realization upon
     the Pledged Stock.

     Notwithstanding anything to the contrary it is hereby agreed that in the
event (1) Pledgee terminates Pledgor's employment for any reason or (2) a Change
in Control event (as such term is defined in the Article VI of the Pledgee's
2000 Share Option Plan) occurs, the Pledged Stock shall serve as the only
recourse available to the Pledgee to compensate it for any losses or liability
it incurs as a result of the Guarantee and the Pledgee shall have no or recourse
to any of the other assets or interests of the Pledgor.

     SECTION 3. Representations of Pledgor.

     The Pledgor represents and warrants that:

          (a) He is the legal and beneficial owner of all of the Pledged Stock;

          (b) all of the shares of the Pledged Stock are owned by the Pledgor
     free and clear of any pledge, mortgage, hypothecation, lien, charge,
     encumbrance, or security interest in such shares or the proceeds thereof
     except such as are granted hereunder;

          (c) the execution and delivery of this Agreement, and the performance
     of its terms, will not violate or constitute a default under any agreement,
     indenture, or other instrument, license, judgment, decree, order, law,
     statute, ordinance, or other governmental rule or regulation applicable to
     the Pledgor or any of his property; and

          (d) upon delivery of the Pledged Stock to the Pledgee or his agent and
     the continued possession thereof, this Agreement shall create a valid first
     priority lien upon, and perfected security interest in, the Pledged Stock
     and the proceeds thereof, subject to no prior security interest, lien,
     charge, encumbrance, or agreement purporting to grant to any third party a
     security interest in the property or assets of the Pledgor which would
     include the Pledged Stock.

     SECTION 4. Covenants of Pledgor.

          (a) The Pledgor hereby covenants that, so long as the Guarantee is in
     effect, he will not sell, convey, or otherwise dispose of any of the
     Pledged Stock or any interest therein or create, incur, or permit to exist
     any pledge, mortgage, hypothecation,

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<PAGE>

     lien, charge, encumbrance, or security interest in, or with respect to, any
     of the Pledged Stock or the proceeds thereof except such as are granted
     hereby; and

          (b) The Pledgor hereby warrants and covenants that he will, at his own
     expense, defend the Pledgee's right, title, and security interest in and to
     the Pledged Stock against the claims of any person.

     SECTION 5. Delivery of Notices.

     The Pledgor shall promptly deliver to the Pledgee all written notices and
will promptly give the Pledgee written notice of any other notices received by
Pledgor with respect to the Pledged Stock.

     SECTION 6. Further Action.

     The Pledgor shall at any time, and from time to time, upon the written
request of Pledgee, execute and deliver such further documents and do such
further acts and things as the Pledgee may reasonably request to effect the
purposes of this Agreement, including, without limitation, delivering to the
Pledgee upon the occurrence of a Guarantee Payment Event irrevocable proxies
with respect to the Pledged Stock in form satisfactory to the Pledgee. Until
receipt thereof, this Agreement shall constitute the Pledgor's proxy to the
Pledgee or its nominee to vote all shares of the Pledged Stock then registered
in the Pledgor's name subsequent to the occurrence of a Guarantee Payment Event.
Such power of attorney granted hereby is coupled with an interest and is
irrevocable. Prior to any Guarantee Payment Event, the Pledgor shall have the
right to vote the Pledged Shares and the right to all cash dividends on and
distributions in respect of the Pledged Shares.

     SECTION 7. Expenses of Enforcement; Termination of Pledge.

          (a) Upon demand, the Pledgor will pay to the Pledgee the amount of any
     and all reasonable expenses, including the reasonable fees and
     disbursements of its counsel and of any experts and agents, which the
     Pledgee may incur in connection with the enforcement of this Agreement.

          (b) Upon the earlier of (i) termination of the Guarantee, and (ii) the
     satisfaction in full of all of the Indebtedness and the satisfaction of all
     additional costs and expenses of the Pledgee as provided herein, this
     Agreement shall terminate, and the Pledgee shall deliver to the Pledgor, at
     the Pledgor's expense, such of the Pledged Stock as shall not have been
     sold or otherwise disposed of pursuant to this Agreement.

     SECTION 8. Governing Law.

     This Agreement and all transactions pursuant thereto shall be governed by
and construed in accordance with the laws of the State of New York.

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     SECTION 9. Notices.

     Any notice, payment, demand or other communication required or permitted to
be given by any provision of this Agreement shall be deemed to have been
delivered and given for all purposes (a) if delivered personally to the party or
to an officer of the party to whom the same is directed, or (b) if delivered by
telecopy or facsimile to the party with acknowledgment of good transmission, or
(c) whether or not the same is actually received, if sent by overnight carrier
or registered or certified mail, return receipt requested, postage and charges
prepaid addressed as follows: if to the Pledgor, 375 Park Avenue, New York, NY
USA, telecopier number: 1-212-750-3336 or to such other address or telecopier
number as the Pledgor may from time to time specify by written notice to
Pledgee; and if to Pledgee, at Pledgee's address Yokneam Industrial Center, P.O.
240, Yokneam Israel or telecopier number 972-4-9599-060, or to such other
address or telecopier number as the Pledgee may from time to time specify by
written notice to the Pledgor; shall be deemed to be effective as of the date so
delivered if delivered personally (which shall include delivery by overnight
courier or by telecopy or facsimile), or as of the third business day after the
date on which the same was deposited in a regularly maintained receptacle for
the deposit of United States mail, addressed and sent as aforesaid.

     SECTION 10. Miscellaneous.

          (a) Beyond the exercise of reasonable care to assure the safe custody
     of the Pledged Stock while held hereunder, the Pledgee shall have no duty
     or liability to preserve rights pertaining thereto and shall be relieved of
     all responsibility for the Pledged Stock upon surrendering it or tendering
     surrender of it to the Pledgor.

          (b) The rights and remedies provided herein and in all other
     agreements, instruments, and documents relating to the Indebtedness are
     cumulative and are in addition to, and not exclusive of, any rights or
     remedies provided by law, including, without limitation, the rights and
     remedies of a secured party under the Uniform Commercial Code.

          (c) This Agreement, the Guarantee, the Loan Agreement and all Exhibits
     and Schedules attached hereto and thereto, and all agreements and
     instruments to be delivered by the parties hereto and thereto, constitute
     the entire agreement among the parties hereto pertaining to the subject
     matter hereof and thereof and supersede all negotiations, preliminary
     agreements and all prior or contemporaneous discussions and understandings
     of the parties hereto in connection with the subject matter hereof, whether
     oral or written, and except as aforesaid, are intended as a complete and
     exclusive statement of the terms of the agreement among the parties.

          (d) Except as otherwise provided in this Agreement, every covenant,
     term, and provision of this Agreement shall be binding upon and inure to
     the benefit of the parties hereto and their respective legal
     representatives, successors, transferees, heirs and permitted assigns.

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          (e) Neither this Agreement nor any part hereof may be amended, waived,
     changed or in any way modified except in a writing executed by the parties
     hereto with the same formality as this Agreement.

          (f) If any term or other provision of this Agreement is invalid,
     illegal or incapable of being enforced by any rule of law or public policy,
     all other conditions and provisions of this Agreement shall nevertheless
     remain in full force and effect so long as the economic or legal substance
     of the transactions contemplated hereby is not affected in any manner
     adverse to any party hereto. Upon such determination that any term or other
     provision is invalid, illegal or incapable of being enforced, the parties
     hereto shall negotiate in good faith to modify this Agreement so as to
     effect the original intent of the parties as closely as possible in an
     acceptable manner to the end that the transactions contemplated hereby are
     fulfilled to the extent possible.

          (g) Section and other headings contained in this Agreement are for
     reference purposes only and are not intended to describe, interpret,
     define, or limit the scope, extent, or intent of this Agreement or any
     provision hereof, and shall not affect in any way the meaning or
     interpretation of this Agreement.

          (h) Where the context and circumstances so require, the use of the
     singular form of a word shall be deemed to include the plural form thereof
     (and vice versa) and the masculine gender shall be deemed to include the
     feminine and neuter genders thereof (and vice versa).

          (i) Every covenant, term, and provision of this Agreement shall be
     construed simply according to its fair meaning and not strictly for or
     against any party.

     IN WITNESS WHEREOF, the undersigned parties have executed this Agreement as
of the day and year first above written.

                                             PLEDGOR:

                                             SAGI AVI GENGER

                                             /s/ Sagi Avi Genger
                                             -----------------------------------

                                             PLEDGEE:

                                             LUMENIS LTD.

                                             By: /s/ Yacha Sutton
                                                --------------------------------
                                                Name:  Yacha Sutton
                                                Title: Chief Executive Officer

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                                   Schedule 1

                                  Pledged Stock

The capital stock issued by Lumenis Ltd. listed below:

One Hundred Forty Nine Thousand Five Hundred (149,500) ordinary shares NIS 0.10
par value per share.

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                                   STOCK POWER

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto
____________________ ___________________ (____________) issued shares of the
common stock of ____________________ standing in the name of the undersigned on
the books of said company, represented by Certificate No. _____________, and
does hereby irrevocably constitute and appoint ____________________ as agent to
transfer the said shares on the books of said company, with full power of
substitution in the premises.

Dated: ______________

                                          ______________________________

                                      - 7 -
<PAGE>

                                    EXHIBIT A

                           [Bank Hapoalim letterhead]

                          Deal Number: 700-02-000001-0

Att:       Mr. Jim Forie
           Tel:  822-1466
           Fax:  822-1401

Attn:      Standby L/C Dept.

From:      Bank Hapoalim B.M., Foreign Trade Operations Center
           Tel Aviv

Our Ref.:  700-02-000001/0

Ref:       Standby Letter of Credit No. 700-02-000001/0

We hereby issue our irrevocable standby letter of credit No. 700-02-000001/0 for
up to US$2,000,000 (US Dollars Two Million) in favour of Signature Bank, to
secure general banking facilities by way of loans, overdrafts, credits,
guarantees, indemnities, payment obligations, letters of credit and any other
banking services whatsoever (hereinafter: "General Banking Facilities") granted
or to be granted by Signature Bank to Sagi A. Genger.

This standby letter of credit is available to you by sight payment against your
first demand by tested telex/authenticated swift bearing the clause "Claimed
Under Standby Letter of Credit No. 700-02-000001/0" and stating that:

          "1. We hereby claim payment of US$__________ under standby letter of
          credit No. 700-02-000001/0 issued by Bank Hapoalim B.M., Tel Aviv.

          "2. The amount claimed represents sums due, owing and unpaid under
          banking facilities granted by us to Sagi A. Genger.

          "3. We hereby certify that a prior written notice has been sent by us
          to Sagi A. Genger at least 30 days prior to the date of this demand."

Partial drawings are permitted.

We undertake that your demands by tested telex/authenticated swift made in
compliance with the terms of this standby L/C will be duly honoured if said
demands are received at this office on or before June 1, 2003.

<PAGE>

We shall credit your account as instructed in your demand 7 (seven) days after
receipt of your demand in the manner mentioned above.

This standby letter of credit is subject to the uniform customs and practice for
documentary credits (1993 revisions) ICC Publication Nr. 500.

This message is the operative instrument -- No mail confirmation will follow.

                                            Best Regards,

                                            Bank Hapoalim B.M.
                                            Foreign Trade Operations Center

                                      - 2 -

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