Document:

<PAGE>   1

                                                                  EXHIBIT 10.9

[IN CIRCLE LETTER L ]

(For new Premises)
(Regular quarterly payment)
(Version 7.97)

                           UNPROTECTED LEASE AGREEMENT

TABLE OF CONTENTS

1.  INTRODUCTION                                      20. CANCELING THE LEASE
                                                          AND THE AGREEMENT

2.  DEFINITIONS                                       21. VACATING THE PREMISES

3.  NON APPLICABILITY OF PROTECTED TENANT LAW         22. GUARANTEES

4.  THE LEASE                                         23. CUSTOMARY OWNERSHIP

5.  COMPLIANCE OF  THE PREMISES                       24. LIABILITIES TO BANK

6.  TRANSFER DATE AND COMPLETION OF CONSTRUCTION      25. MISCELLANEOUS

7.  PARKING

8.  THE PURPOSE OF THE LEASE

9.  THE PERIOD OF THE LEASE

10. LEASE PAYMENTS

11. PAYMENT OF LEASE FEES

12. OTHER PAYMENTS

13. VALUE ADDED TAX

14. ALTERATIONS TO THE PREMISES AFTER TRANSFER DATE

15. THE USE OF THE PREMISES

16. MAINTENANCE AND REPAIRS

17. INSURANCE AND LIABILITY

18. TRANSFER AND ASSIGNMENT OF RIGHTS

19. FUNDAMENTAL PROVISIONS AND PRE-APPROVED COMPENSATION

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For new Premises)
(Regular quarterly payment)
(Version 7.97)
                              UNPROTECTED LEASE AGREEMENT

          Drawn up and signed in______ , on the 11th day of March, 1998

                                 BY AND BETWEEN

                           KAPS-PHARMA LTD.
                           8 HANECHOSHET ST., TEL AVIV
                           (HEREINAFTER, "THE LESSOR")

                                                 PARTY OF THE FIRST PART

                                       AND

                           JOLT LTD.
                           PRIVATE COMPANY:  511573594
                           FROM:  19 YAD HARUTZIM, JERUSALEM
                           (HEREINAFTER, "THE LESSEE")

                                                  PARTY OF THE SECOND PART

Whereas           The Lessor declares that it is entitled to be listed as the
                  legitimate owner of the leasing rights for the land known as
                  block 30243, section 62, lot 5 in accordance with Jerusalem
                  Municipal Building Plan 2787 constituting a lot of some 7,863
                  sq. m. located in the Har Hahotzvim Industrial Zone in
                  Jerusalem (Hereinafter, "the Lot"), upon which is "the
                  Building" as defined below;

Whereas           The Lessee wishes to lease from the Lessor and the Lessor
                  declares its desire to lease the areas of the Building defined
                  herein under, described and designated as "the Premises," and
                  pursuant and subject to the terms of this Agreement;

THEREFORE, IT IS DECLARED, STIPULATED AND AGREED BETWEEN THE PARTIES AS FOLLOWS:

1.       The Introduction to this Agreement constitutes an integral part hereof.

2.       DEFINITIONS

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[Page 2 continued]

         In this Agreement, the terms specified below shall have the meaning
         set forth beside them.

         "The Agreement":         This Agreement in its entirety including all
                                  appendices.

         "The Building":          The Building with 9 floors for light industry
                                  and for offices and 2 underground parking on
                                  the Lot.

         "The Premises"           The office and warehouse space of 562 sq. m.
                                  and warehouses in a space of 52 m2 on floor
                                  11.20 of the Building, as delineated
                                  and indicated in red on the plan attached as
                                  Appendix A to this Agreement and parking space
                                  as detailed in paragraph 7 herein under.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   4
[Page 3]

         "The  Project Manager"   Ehud Tayar or anyone authorized by him in
                                  writing.

         "Index"                  The Consumer Price Index (including fruit and
                                  vegetables) published by the Central Bureau of
                                  Statistics.

         "Base Index"             The index in effect on the ninetieth
                                  (90) day after the date this Agreement is
                                  signed, i.e. 155.3 points.

         "Interest on Arrears"    The total interest on arrears at the highest
                                  acceptable rate prevailing in the period of
                                  arrears in question at the Israel Discount
                                  Bank Ltd. for unauthorized overdrafts in
                                  debitory accounts. Written confirmation by a
                                  branch manager of the Bank regarding the
                                  interest rate as above shall serve as absolute
                                  evidence for the interest rate.

3.       NON-APPLICABILITY OF THE TENANTS PROTECTION LAW

         A.       It is hereby declared that the Premises are located in a
                  building, the construction of which was completed after August
                  20, 1968, and that this lease is instituted upon the express
                  condition that the Tenants Protection Law (Combined Version)
                  5732 - 1972 and other tenant protection legislation according
                  to their regulations and stipulations ( hereinafter:
                  "Tenants Protection Law"), and any other law that shall grant
                  the Lessee the status of protected Tenant shall not apply to
                  this lease.

         B.       The Lessee hereby declares that it neither paid, nor shall pay
                  the Lessor "key money" or any other such consideration for the
                  lease which is not a rental payment, and that the Lessee and
                  any proxy acting on its behalf shall not be a protected tenant
                  in the Premises according to the law.

         C.       The Lessee hereby declares that any investment it makes in the
                  Premises, including equipment and installations, shall be made
                  for its needs only, and it shall be precluded from claiming
                  that these investments represent "key money" or payment in
                  accordance with Section 82 of the Tenants Protection Law
                  (Combined Version) 5732 - 1972, or any payment granting the
                  Lessee any right to the Premises, and shall be precluded from
                  requesting any total or partial participation or refund by the
                  Lessor for the aforementioned investments.

         D.       The Lessee is aware that the Premises are leased to the Lessee
                  inter alia based on its declarations as above, and it shall be
                  precluded from raising

<PAGE>   5
[continued - p. 3]

                  any demands or claims with respect to its being a protected
                  tenant or that it has any rights in the Premises other than
                  those specifically conferred by this Agreement.

         E.       The provisions of sub-clauses A - D above are principal and
                  fundamental provisions of this Agreement.

4.       THE LEASE

         A.       Under a lease that is not protected by the Tenants Protection
                  Law the Lessor hereby leases to the Lessee, and the Lessee
                  hereby leases from the Lessor, the Premises solely for the
                  purpose of the Lease for the period and under the terms
                  stipulated herein.

         B.       The Tenant hereby declares that it has seen the Premises
                  and/or the plans and/or the specifications and/or the diagrams
                  of the Premises, that it examined its legal status, found it
                  commensurate with the declarations of the Lessor as to its
                  needs, and that it hereby waives any claim related to the
                  suitability of the Premises to its needs and/or to the
                  declarations of the Lessor and/or the quality of the Premises
                  and/or any other claim.

         C.       The rental is conditional upon the Lessee maintaining an
                  approved enterprise in the Premises as defined in the Capital
                  Investment Act. In any case where the Lessee shall cease to
                  maintain an approved enterprise as stated, such action shall
                  constitute a fundamental breach of this Agreement.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   6
[Page 4]

         D.       The provisions of sub-clauses A - C above are principal and
                  fundamental provisions of this Agreement.

5.       COMPLIANCE OF THE PREMISES

         The Lessee shall take possession of the Premises as follows: Storage
         space - as is without any alterations. Office space, commensurate with
         the plans, drawing and the technical specifications attached to this
         Agreement as APPENDIX B and APPENDIX B-1, which were prepared by the
         architect on behalf of the Lessor, and the public areas in the building
         complying with the technical specifications attached to this Agreement
         as APPENDIX C, including alteration work on the Premises to meet the
         needs of the Lessee (hereinafter: "Adjustment Work"), as specified in
         the above appendices.

6.       DATE OF TRANSFER AND COMPLETION OF CONSTRUCTION

         A.       After the Lessee has transferred to the Lessor the lease
                  payments as detailed in Clause 11 C hereinafter and the
                  guarantees pursuant to Clause 22, the Lessor shall complete
                  the Premises and transfer possession to the Lessee by
                  [handwritten:] 8/16/98 that it determines 30 days after
                  the date this Agreement is signed. (hereinafter, "the
                  Transfer Date).

                  "Completion" means the ability to use and benefit from the
                  Premises in reasonable fashion and subject to the provisions
                  of this Clause below.

         B.       Without derogating from the aforementioned, a delay of up to
                  21 days in the Transfer Date shall not be considered a breach
                  of the Agreement, and shall not entitle the Lessee to any
                  relief. The lease termination date shall be postponed in
                  accordance with the delay in transfer.

         C.       Without derogating from the aforementioned Clause B, it is
                  hereby agreed that the Transfer Date shall be delayed in the
                  event of an Act of God, including, but not be limited to,
                  strikes or boycotts in the construction industry that shall
                  affect the pace of construction of the Building, states of war
                  or mobilization of reserves, unexpected shortages of materials
                  or labor, non-provision of electricity and/or non-connection
                  of the Premises to the electrical grid, provided the liability
                  thereof is not exclusively that of the Lessor, or any other
                  reason or cause which is beyond the control or reasonable
                  anticipation of the Lessor. According to its exclusive
                  discretion the Project Manager shall determine the time period
                  the event or Act of God is in effect, and the Transfer Date
                  shall be delayed accordingly. Such a delay shall not be
                  considered a breach of the

[illegible signature]

Kaps - Pharma Ltd.
<PAGE>   7
Kaps-Pharma Ltd.

[Page 4 continued]

                  Agreement and shall not entitle the Lessee to any relief. The
                  termination of the Lease Date shall be postponed in accordance
                  with the transfer delay.

         D.       The Transfer Date or the Delayed Transfer Date pursuant to
                  Clauses B or C above shall hereinafter be called the "Transfer
                  Date."

         E.       The Lessee shall take possession of the Premises on the
                  Transfer Date and the Lessor shall deliver the Premises with
                  the participation of a representative of the Lessee, if
                  present, after receiving advance notice. They shall prepare
                  Minutes recording the comments of the Lessee's representative,
                  if any. The Lessor shall repair anything requiring repair in
                  accordance with the stipulations of the Project Manager within
                  45 days of the Transfer Date.

         F.       To remove any ambiguity, it is hereby stated that the Lessor
                  shall have the right, even after completion of the building,
                  to perform construction and other work in areas of the
                  building which do not constitute the Premises, including, but
                  not limited to, development work provided that such work shall
                  not derogate from the reasonable use of the Premises by the
                  Lessee.

                  Furthermore, the addition of stories and/or partial stories,
                  and/or expansion of the usable areas of the building, and/or
                  alteration of the permitted intention of certain areas in the
                  building shall not be considered a violation of the
                  aforementioned obligations of the Lessor as long as this does
                  not derogate from the reasonable use of the Premises or of its
                  rights by the Lessee pursuant to this Agreement.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   8
[Page 5]

                  The Lessor shall have the right to make alterations in the
                  building plans and/or in the Premises if required to do so by
                  any competent authority, and as long as such alterations shall
                  not detract from the reasonable use of the Premises by the
                  Lessee.

         G.       The Project Manager shall determine, at its discretion, as
                  expert and not as arbitrator, whether the Premises are ready
                  for transfer in accordance with the aforementioned terms,
                  whether it is built pursuant to the specifications, whether
                  deviations from or alterations in the specifications
                  constitute significant or minor deviations and/or whether they
                  and/or the works and/or alterations and/or additions as stated
                  above constitute an impediment to the Lessee's reasonable use
                  of the Premises.

         H.       The provisions of sub-clauses A - G above are principal and
                  fundamental provisions of this Agreement.

7.       PARKING

         The building parking plan is attached to this Agreement as APPENDIX D
         (hereinafter: "Parking Plan"). Five parking spaces marked on the
         Parking Plan in red shall be at the Lessee's disposal throughout the
         lease period, for the sole use of the Lessee.

         In consideration of the use of the parking spaces, the Lessee shall pay
         the Lessor the lease payments as detailed in Clause 10 below.

         In any case where the lease is terminated or cancelled, according to
         the circumstances, the right to use the parking spaces as stated above
         shall be automatically cancelled. The provisions of this Agreement
         regarding the Premises shall also apply to the parking spaces.

[illegible signature]
Kaps-Pharma Ltd.
<PAGE>   9
         [Page 5 continued]

8.       THE PURPOSE OF THE LEASE

         A.       Without derogating from the foregoing, the purpose of the
                  Lease is the management of a business for the [handwritten:
                  development, production, and sale of wireless electronic
                  communications products], and on condition that no disturbance
                  is caused to the other tenants of the building and that the
                  usage shall not deviate from the building's building permit.

                  The Lessee shall be responsible for acquiring all necessary
                  licenses for managing its businesses on the Premises, if
                  necessary. Failure to acquire them shall not be a pretext for
                  shortening the Lease or delaying or reducing leasing fees,
                  even if the business shall close as a result of losing its
                  license.

         B.       Notwithstanding the aforesaid in sub-Clause A above, if the
                  Lessee does not obtain a license to conduct its business in
                  the building due to the building not being constructed in
                  accordance with the building permit, or due to the fact that
                  the building's designation, according to the building permit
                  and/or city building plans, does not allow the Premises to be
                  used for the purposes set forth in this Agreement, then the
                  Lessor shall have the right and the choice either to arrange a
                  building permit that is commensurate with the purposes for
                  managing the Premises as set forth in this Agreement at the
                  Lessee's expense, or to complete the building as required by
                  the permit, as the case may be , or to cancel this Agreement,
                  all at the Lessee's choice, within 120 days of the Lessee's
                  written demand.

                  In any case mentioned in the foregoing sub-Clause, the Lessee
                  shall have no claim of any kind on any grounds against the
                  Lessor, and by signing this Agreement it hereby waives such
                  right in advance including but not limited to the Lessee's
                  investment in the Premises.

                  None of the aforementioned shall be considered as the Lessor's
                  permission for the Lessee to use the Premises and/or to manage
                  a business in the Premises without a permit and/or in
                  deviation therefrom.

[illegible signature]
Kaps-Pharma Ltd.
<PAGE>   10
[Page 6]

         C.       To avoid any ambiguity, and without derogating from the
                  foregoing, the parties hereby agree that liability for
                  conducting the Lessee's business without the necessary legal
                  permits shall apply solely to the Lessee, and it agrees to
                  indemnify the Lessor for any claim and/or charge imposed on
                  him for conducting a business without a legal permit and/or
                  not acquiring the legal permits immediately upon first request
                  of the Lessor.

         D.       The provisions of sub-clauses A - C above are principal and
                  fundamental provisions of this Agreement.

9.       THE TERM OF THE LEASE

         A.       Subject to the fulfillment by the Lessee of all its
                  obligations pursuant to this Agreement, the Lessor hereby
                  leases to the Lessee, and the Lessee hereby leases from the
                  Lessor, the Premises under an unprotected Lease for a period
                  of sixty (60) months (hereinafter, "the Basic Lease Period")
                  from the beginning of the transfer.

         B.       Subject to the fulfillment by the Lessee of all its
                  obligations pursuant to this Agreement, the approval of the
                  Parties, and provision of notification as set forth below, the
                  Lessee shall have the option of extending the Lease Period for
                  two additional consecutive Lease Periods of 24 months each.

                  Each 24-month period as stated above shall be hereinafter
                  called "the Extended Period."

                  The Lessee's notice to the Lessor regarding the Lessee's
                  exercise of the option for the Extended Period shall be made
                  in writing and be delivered to the Lessor at least 4 months
                  prior to the end of the Basic Lease Period or the previous
                  Extended Period, as the case may be. The Lessee shall attach
                  to the above letter guaranties as specified in Clause 22
                  below.

                  Lease payments during the Extended Period shall be updated per
                  Clause 10 C below.

                  Subject to the above, all the terms of the Lease set forth in
                  this Agreement shall also apply to the Lessee for the Extended
                  Period.

                  In order to avoid ambiguity, it is hereby stated that in any
                  case, the Basic Lease Period and the Extended Terms together
                  shall not exceed 9 years and 11 months altogether.

                  In this Agreement, the Basic Lease Period as well as the
                  Extended Periods shall be called, for the sake of brevity,
                  "the Lease Period."

<PAGE>   11
[Page 6 continued]

         C.       The provisions of sub-clauses A - B above are principal and
                  fundamental provisions of this Agreement.

10.      LEASE PAYMENTS

         A.       For the office space - $9 per square meter, as specified in
                  Clause 2 below, totaling $5,058.

                  For the storage space - $7 per square meter, as specified in
                  Clause 2 below, totaling $364

                  For the parking - 2 parking spaces for $80 per space and 3
                  parking spaces at no charge, totaling $160.

                  Total lease payments - 5,602 [crossed out by hand] $5582
                  [(added by hand] per month (hereinafter: "the Basic Lease
                  Fees").

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   12
[Page 7]

         B.       In addition to and together with the Basic Lease Fees as
                  detailed in paragraph A above, the Lessee shall pay the
                  Lessor, during the Basic Lease Period, additional payments as
                  reimbursement for the adjustment works in the office space of
                  the Premises (as specified in Clause 5 above), at $4.20 per
                  square meter, totaling $2,360.40 per month (hereinafter:
                  "Premises Adjustment Fee").

         C.       At the beginning of each Extended Lease Period, the Lease Fees
                  shall be increased by 10% relative to the Lease Fees at the
                  termination of the previous term (hereinafter: "the Adjusted
                  Lease Fee"). The Basic Lease Fees and the Adjusted Lease Fees
                  shall be called hereinafter, for the sake of brevity, "Lease
                  Fees."

         D.       The Lease Fees and all other payments denominated in dollars
                  in this Agreement shall be converted and paid in New Shekels
                  at the representative exchange rate on the date of actual
                  payment.

         E.       The provisions of sub-clauses A - D above are principal and
                  fundamental provisions of this Agreement.

11.      PAYMENT OF LEASE FEES

         A.       As stated in Clause 10 above, the Lessee shall prepay the
                  Lessor the Lease Fees and, during the Basic Lease Period, the
                  Premises Adjustment Fees for every 3 months of the Lease on
                  the first day of each 3-month period as stipulated herein.

         B.       All the payments by the Lessee pursuant to this Agreement
                  shall be paid by the Lessee on the date set forth in paragraph
                  A above as the date of payment by 11:00 in the morning, by
                  means of a deposit to the account of the Lessor, account
                  number 344966 at the Israel Discount Bank Ltd., Ramat Hasharon
                  Branch (hereinafter: "the Bank"). If the date for payment
                  falls on a non-business day, the payment shall be effected on
                  the next business day thereafter (the provisions of this
                  sub-Clause are secured and cannot be altered without the
                  advance written notice of the Bank).

         C.       On the date this Agreement is signed and prior to the
                  beginning of each Extended Period, as the case may be, and on
                  the date determined by the Lessor, the Lessee shall pay the
                  Lessor the Lease Fees for the first and last quarters of the
                  Lease Period.

                  Payment of the Lease Fees for the last quarter of the Lease
                  Period shall serve the Lessor as specified in Clause 22 C
                  below.

         D.       Payment by check, authorization of bank transfer and/or any
                  other method of payment shall not be considered payment. Only
                  after a check has cleared and/or the payment is actually
                  transferred into the account of the Lessor by the Bank, shall
                  the payment be considered paid.

<PAGE>   13
[Page 7 continued]

         E.       The Lessee shall pay the Lessor the Lease Fees and all other
                  amounts payable by the Lessee under this Agreement for each
                  Lease Period, even due to some reason for which the Lessor is
                  not liable, the Lessee shall use only a portion of the
                  Premises and/or only for a portion of the time, whether
                  voluntarily or involuntarily. Nevertheless, the Lessee has an
                  escape clause from this Agreement whereby the Lessee may
                  vacate the Premises on [handwritten: August 14, 2001] (i.e. at
                  the beginning of the fourth year of the Lease) provided that
                  written notice is furnished four months in advance, and the
                  Lessee shall pay the Lessor, unconditionally, pre-determined
                  and pre-agreed compensation of $ 60,000 (sixty thousand US
                  Dollars). The Lessee shall be exempt from paying the above
                  compensation if and only if the Lessee brings a substitute
                  Lessee who will undertake all the Lessee's obligations
                  pursuant to this Agreement, and who will be approved by the
                  Lessor in advance and in writing, at the Lessor's exclusive
                  discretion.

         F.       Provisions A - E are principal and fundamental provisions of
                  this Agreement.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   14
[Page 8]

         G.       The Lessee hereby waives all present and/or future claim and
                  cause for writing off any amount, whether fixed or outside the
                  Lease payments and/or administrative fees and/or any other
                  payment payable to the Lessor pursuant to this Agreement.

12.      OTHER PAYMENTS

         A.       In addition to all the other payments set forth in this
                  Agreement, the following amounts shall be payable by the
                  Lessee:

                  (1)      All taxes, fees, and levies, municipal and
                           governmental, of any type payable now or in the
                           future by the possessor of the Premises, and/or
                           charged due to the actual use of the Premises,
                           including but not limited to general municipal tax,
                           garbage removal, and other municipal taxes, and/or
                           related to the business to be conducted by the Lessee
                           on the Premises and/or the purpose of the Lease,
                           including business tax, sign tax, fees and licenses
                           for the business and the management thereof.

                  (2)      All fees and payments related to electricity
                           consumption on the Premises.

                           The Lessee shall pay amounts to the Lessor for
                           electricity consumption on the Premises as determined
                           by the internal consumption meters to be installed
                           for the Premises as well as the relative share of
                           public electricity consumption.

                           In addition, the Lessee shall pay the Lessor for
                           electricity consumption for air conditioning in the
                           Premises based on the electricity consumption of the
                           air conditioning unit in the building, the Lessee's
                           share being calculated based on the size of the
                           Premises relative to the overall leased areas in the
                           building. For the removal of doubt, the expenses for
                           electricity for air conditioning are in addition to
                           the Lease Fees and the Maintenance Fees pursuant to
                           this Agreement.

                           If the Lessee does not pay the aforementioned
                           electricity expense within 7 days from the date the
                           Lessor's invoice therefor was delivered to the
                           Lessee, subject to a 72 hour prior warning, the
                           Lessor has the right to disconnect the supply of
                           electricity and/or air conditioning to the Premises,
                           and the contents of this paragraph represent a
                           warning and ongoing advance notice to the Lessee of
                           the aforementioned cut off in the event of failure to
                           pay on time with no need for additional warnings or
                           notices prior to any such disconnection.

<PAGE>   15
[Page 8 continued]

                           The Lessor shall be neither responsible nor liable
                           for any direct, consequential and/or indirect damage
                           that may be caused to the Lessee or any person,
                           organization or corporation as a result of the
                           disconnection of electricity and/or air conditioning
                           to the Premises by the Lessor due to non-payment by
                           the due date.

                  (3)      An appropriate relative share of the expenses and
                           insurance premiums paid by the Lessor for building
                           insurance and all systems thereof, with respect to
                           loss or damage due to fire, explosion, earthquake,
                           storm and tempest, flood, water damage, strikes,
                           riots and wanton damage, as well as for any
                           additional risk which may be required in the Lessor's
                           opinion. This insurance shall not cover the contents
                           of the Premises nor any repairs, alterations and
                           additions thereto which were done by and/or for the
                           Lessee.

                           The aforementioned insurance shall include a Clause
                           regarding waiver of the right to subrogation
                           vis-a-vis other tenants in the building with respect
                           to damage caused by them unintentionally.

                           It is hereby explicitly agreed that the insurance
                           taken out pursuant to this Clause above shall not
                           derogate from the Lessee's liability whether pursuant
                           to this Agreement or under any law, nor shall it
                           impose any liability on the Lessor regarding any loss
                           and/or damage to the building.

                           The aforesaid insurance expenses shall be included in
                           and be a part of the Maintenance Fees.

<PAGE>   16
[Page 9]

                  (4)      Maintenance services at the rate stated in Clause 16
                           below.

                  (5)      The provisions of sub-clauses A - D above are
                           principal and fundamental provisions of this
                           Agreement.

         B. In the event that any of the amounts required to be paid by the
         Lessee to the Lessor pursuant to the foregoing sub-Clause (1) is based
         on a bill pertaining to the entire building, the Lessee shall pay the
         Lessor an appropriate percentage of the entire bill as long as for the
         purpose of calculating the percentage of the Lessee in the said
         payments, then the ratio between the Premises and the rest of the space
         intended to be leased in the building shall be taken into
         consideration.

         C.       The Lessor shall be liable for property tax.

         D.       The Lessee promises to be personally responsible for the
                  cleanliness of the Premises, and at the expense of the Lessee.

         E.       The terms of the foregoing sub-Clauses (1) - (4) are part of
                  the principles and bases of this Agreement.

13.      VALUE ADDED TAX

         A.       The Lessee promises to pay the Lessor VAT in addition to, and
                  together with, the Lease Fees, including linkage adjustments
                  and/or interest on arrears, as well as any other payment which
                  the Lessee is required to pay the Lessor pursuant to this
                  Agreement, and/or which the Lessor paid instead of the Lessee
                  and which Lessee must refund to the Lessor. This must be done
                  against a tax receipt as required by law.

                  The provisions of this Clause shall also be in effect in the
                  event any other tax is imposed and added to, or replaces VAT
                  under conditions whereby the law applies it to Lease Fees or
                  imposes or permits the transfer of the debit to the Lessee.
                  VAT shall be treated as Lease Fees in all respects.

         B.       Subject to the provisions of sub-Clause 13 (A) above, payments
                  of VAT shall be effected by means of checks postdated to the
                  15th of the month following a payment month (check postdated
                  for 45 days), or whatever other day of the month stipulated by
                  the VAT authorities from time to time. For the removal of
                  doubt, the aforementioned checks shall be delivered to the
                  Lessor together with (on the same day as) the Lease Fees (on
                  the first day of the month at the beginning of each quarter)

14.      ALTERATIONS TO THE PREMISES AFTER TRANSFER DATE

<PAGE>   17
[Page 9 continued]

         A.       In addition to the provisions of Clause 5 above, and after
                  Transfer Date, at its own expense and liability, and after
                  obtaining the consent of the Lessor, the Lessee shall have the
                  right to carry out works and alterations in the Premises only
                  (not including public areas, which include restrooms,
                  kitchenettes, and entries) that are required by the Lessee in
                  order to construct and/or move permanent or portable internal
                  walls, to install telephone, air conditioning, electricity
                  and/or communication systems; to connect and install its
                  machines, computers and equipment; and to undertake any other
                  or additional work or changes that the Lessee shall consider
                  necessary for conducting its business on the Premises,
                  excluding alterations likely to damage the building
                  construction, walls, water and electricity systems and/or
                  alterations which might affect the exterior or interior
                  building facade, or the reasonable use thereof by the other
                  users of units in the building, per the following conditions:

                  (1)      The Lessee shall submit construction plans for the
                           above for the prior, written approval of the Lessor.

<PAGE>   18
[Page 10]

                  (2)      The Lessor shall have the right to require changes in
                           the specifications and the details of the work, and
                           the Lessee promises to alter them as required by the
                           Lessor, and to begin the work only after the Lessor
                           has given written approval.

                  (3)      The approval of the Lessor for such work is
                           conditional upon, in addition to the foregoing,
                           delivery by the Lessee to the Lessor of copies of
                           insurance policies as provided in Clause 17 below.

                  (4)      All work shall be carried out by skilled
                           professionals at a standard accepted for similar Hi
                           Tech buildings in the area of the Premises, pursuant
                           to Israeli regulations, and subject to the guidelines
                           issued by the project manager.

                  (5)      The Lessee shall carry out the work on the Premises
                           in a manner and form that will not interfere with
                           operations in any area of the building and/or other
                           lessees, and the Lessee hereby agrees to strictly
                           carry out all the stipulations of the Lessor, and to
                           take all precautions to prevent the aforementioned
                           disturbances.

                  (6)      The Lessee shall be liable for any damage caused
                           during and following work on the Premises, to any
                           person and property, including the building and/or to
                           the Premises and/or to other lessees and/or to other
                           leased premises and/or to the Lessor or its
                           representatives, whether the work was carried out by
                           the Lessee or by someone else acting on its behalf.

                  (7)      The Lessee agrees and affirms that any sum that it
                           spends in carrying out alterations in order to adapt
                           the Premises for its needs, as stated above, shall
                           not grant the Lessee vis-a-vis the Lessor any right
                           to a refund or payment for the sums and/or changes it
                           made as stated above - neither during the Lease
                           Period, while vacating the Premises or thereafter.

                  (8)      The Lessee shall acquire and pay for all the
                           necessary licenses, certificates, and permits for
                           carrying out the alterations from the competent
                           institutions and authorities, should such be
                           required.

         B.       The provisions of sub-clause A above are principal and
                  fundamental provisions of this Agreement.

<PAGE>   19
[Page 10 continued]

15.      THE USE OF THE PREMISES

         Without derogating from the validity of the other terms of the
         Agreement, the Lessee promises as follows:

         A.       To manage the work only within the boundaries of the Premises,
                  and to use the Premises only for the purpose set forth in the
                  Lease and for no other purpose.

         B.       To maintain the cleanliness of the Premises and its
                  surroundings, and not to place and/or keep any equipment,
                  inventory or any movable property and/or any other objects in
                  the yard and/or on the balconies of the Premises and/or the
                  building and/or any other area outside of the Premises, and
                  not to use any area of the building, except for the Premises,
                  for any purpose whatsoever, except for use for the purpose of
                  access to the Premises.

                  It is hereby clarified that the Lessee has no right to install
                  in the Premises dining rooms, kitchens, kitchenettes and the
                  like without obtaining prior written approval from the Lessor.
                  If such approval is obtained, it shall have the right to act
                  only in accordance with the terms, if any, set forth in the
                  said approval.

                  If, in spite of the contents of this Clause, any of the
                  Lessee's movable property is found on the balconies and/or
                  outside of the Premises and if the Lessee does not remove it
                  at first request of the Lessor, the Lessor shall have the
                  right, though not the obligation,

<PAGE>   20
[Page 11]

                  to remove these objects from the building and/or the area, at
                  the Lessee's expense, and shall not be liable for the
                  integrity of such objects.

                  The failure of the Lessor to exercise the aforementioned right
                  shall not constitute its consent to keeping the aforementioned
                  movable property on the balconies and/or outside the Premises,
                  nor shall this confer on the Lessee any right to continue to
                  keep objects there, nor shall this prevent the Lessor from
                  taking any action to which it is entitled under law and/or
                  this Agreement.

         C.       To refrain from creating any disturbance, nuisance or
                  discomfort to people in or visiting the area around the
                  Premises, including the neighbors and/or environs.

                  The Lessee hereby promises not to introduce waste that does
                  not comply with the directives of the Ministry of Health, nor
                  to allow such waste to flow into the sewage system.

                  The Lessor shall have the right to charge the Lessee special
                  fees to cover the additional expense of removing garbage from
                  the building in which the Premises is located, if, in the
                  opinion of the Lessor, the amount of garbage and/or refuse
                  produced by the Lessee on a current basis is excessive,

         D.       To fulfill all laws, regulations and by-laws in force, and/or
                  that shall be imposed upon the Premises during the Lease
                  Period regarding the use thereof and the business, work and
                  activities carried out therein by the Lessee, and to be held
                  liable by government and municipal institutions for the
                  payment of any fines due to non-fulfillment of the
                  stipulations of this Clause.

         E.       To access the Premises only via the access ways marked on the
                  approved plan and those that will exist in the future, to park
                  cars and other vehicles in spaces designated for same, and not
                  to use any motor or other vehicle likely to damage the access
                  or the parking areas, and to comply with the stipulations
                  issued by the Lessor from time to time relating to the access
                  and parking arrangements within the boundaries of the lot.

         F.       To pay any specific amounts that the Lessee owes the Lessor
                  and/or the appropriate authorities on the due dates for such
                  payments.

         G.       To allow the Lessor and/or the representative of the Lessor to
                  visit the Premises at any reasonable time and to check its
                  condition and use made thereof in order to maintain the
                  performance of the provisions of this

<PAGE>   21
[Page 11 continued]

                  Agreement, and/or to take the action and exercise the means
                  set forth in this Agreement or in any law requiring entry into
                  the Premises, including:

                  (1)      To make any repairs within the Premises, necessary
                           for the building or any portion thereof.

                  (2)      To carry out any construction and/or demolition work
                           which the Lessor has the right to do pursuant to this
                           Agreement.

                  (3)      To show the Premises to potential buyers and/or
                           lessees.

         H.       To fulfill the stipulations of the Lessor and of the competent
                  authorities in regards to fire fighting and prevention
                  procedures, civil defense, safety and security, and to
                  purchase at its own expense per the instructions of the
                  aforementioned authorities, all the necessary prevention and
                  safety equipment for the application and execution of the
                  aforementioned stipulations, and to connect it to the panel on
                  that floor of the building.

         I.       At the request of the Lessor, and at the Lessee's expense, to
                  demolish and/or to change any addition or alteration made by
                  the Lessee to the Premises and/or the building not constructed
                  in compliance with the terms of this Agreement, and to restore
                  the Premises and the building to its original state.

<PAGE>   22
[Page 12]

         J.       The Lessee hereby promises not to hang or install any signs
                  and/or other means of advertising in the area and/or in any
                  portion of the building. The signs and the placement, type,
                  size and shape thereof shall be determined by the Lessor, at
                  the sole discretion of the Lessor, and shall be installed by
                  the Lessor at the Lessee's expense.

         K.       In order to remove all ambiguity, it is hereby explicitly
                  clarified that the Lessee shall have no right to install air
                  conditioners in the walls and/or windows of the Premises.

         L.       The provisions of sub-clauses A - K above are principal and
                  fundamental provisions of this Agreement.

16.      MAINTENANCE AND REPAIRS

         A.       The Lessee promises to use the Premises in a cautious and
                  reasonable manner, and to pay close attention throughout the
                  entire Lease Period that the Premises and all of the
                  installations related thereto are in working condition,
                  operational, clean and orderly.

         B.       In exchange for payment of the sums set forth in Clause D
                  below, the Lessor hereby promises to supply the maintenance
                  services listed in Clause C below, as per the terms set forth
                  therein.

         C.       Maintenance Services to be provided by the Lessor shall be of
                  the type, scope and per the conditions set forth below:

                  (1)      Structural maintenance, maintenance of mechanical
                           systems, public plumbing, public sewage, public
                           electricity, elevator maintenance, landscaping, sign
                           maintenance, and cleanliness of public areas.

                  (2)      Air conditioning services, including central air
                           conditioning services, excluding servicing and
                           maintenance of air conditioning equipment in the
                           Premises during normal working days and hours.
                           Heating shall be installed in the end units.

                           The Lessor shall also provide air conditioning
                           services during the winter to the Lessee, in the
                           scope and under the conditions that the parties shall
                           agree upon.

                           In order to remove any ambiguity, it is hereby
                           explicitly clarified that subject to the obligations
                           of the Lessor to perform repairs on any malfunctions
                           in the air conditioning system, if any, the
                           provisions of this Agreement do not make him liable
                           regarding

<PAGE>   23
[Page 12 continued]

                           potential disruptions in the air conditioning system,
                           whether as a result of breakdown or due to
                           maintenance work or for any other reason, without
                           exception. The Lessee shall have no right to demand
                           and/or receive from the Lessor any compensation,
                           and/or damages and/or payment for any reason
                           whatsoever.

                           The Lessee shall have no right to touch the air
                           conditioning units on the Premises, and/or service,
                           and/or maintain, and/or repair them, and/or perform
                           maintenance and/or any operation on them and/or to
                           allow others (even air conditioning professionals or
                           specialists) to do any of the above to the units.
                           Should the Lessee violate the terms of this paragraph
                           and, as a result, should any damage be caused to the
                           air conditioning units, the Lessee shall bear the
                           full cost of the repair of the damage, plus interest
                           on arrears. In order to remove any ambiguity, the
                           Lessee shall be liable for all servicing and
                           maintenance costs of the air conditioning units in
                           the Premises.

                  (3)      Preserving the environment - in a scope to be
                           determined from time to time by the Lessor, at the
                           exclusive and sole discretion of the Lessor.

                  (hereinafter, "Maintenance Services").

         D.       In exchange for the Maintenance Services, the Lessee shall pay
                  the Lessor, in addition to the Lease Fees stipulated in Clause
                  10 above and the Lease fees stipulated in Clause 12 above, the
                  sum of $2.50 per month per square meter of the Premises, i.e.
                  $1,535 per month for the entire Premises (hereinafter,
                  "Maintenance Fees").

<PAGE>   24
[Page 13]

                  The Maintenance Fees shall be converted into Shekels on the
                  date this Agreement is signed, shall constitute the basis for
                  payment of Maintenance Fee ("the Principal"), and shall be
                  paid to the Lessor plus linkage adjustments in the consumer
                  price index to be added to the Principal. The linkage
                  adjustments shall be calculated based on the increase in the
                  new index published at the time of actual payment, compared
                  with the basic index.

                  The Lessee shall pay the Lessor the Maintenance Fees in
                  advance for each 3 months of the Lease Period, as specified in
                  Clause 11 above.

         E.       Subject to the provisions of Clause 13 (B) above, the Lessee
                  shall pay the Lessor, together with the Maintenance Fees, the
                  Value Added Tax applicable to these payments.

         F.       To remove any ambiguity, it is hereby agreed that the Lessor
                  shall not be considered the trustee of the Premises and/or the
                  contents thereof for the purpose of the Trustee Act 5727 -
                  1967.

         G.       The Lessee promises to notify the Lessor, as the case may be,
                  immediately and without delay, of any loss, degradation, or
                  damage caused to the Premises or any portion thereof.

         H.       Without derogating from the foregoing, the Lessee promises to
                  repair immediately and at its own expense, any damage or
                  degradation for which the Lessee is responsible as provided in
                  Clause 17 A above within seven (7) days of the occurrence.

         I.       In the event that the Lessee does not completely fulfill the
                  obligation stipulated in Paragraphs A and H above, the Lessor
                  shall have the right (but is not obligated) to carry out the
                  maintenance and repairs required of the Lessee, and the Lessee
                  shall refund to the Lessor the monies spent immediately upon
                  first request of the Lessor, and pursuant to the terms of such
                  request. Nothing in this Clause shall derogate from the
                  Lessee's duty to perform the repairs in the Premises himself.

         J.       The provisions of sub-clauses A - I above are principal and
                  fundamental provisions of this Agreement.

17.      INSURANCE AND LIABILITY

         A.       In the relationship between the parties, and without
                  derogating from the Lessee's liability under any law, the
                  Lessee shall be solely liable for any damage caused to any
                  person and/or object and/or property during and as a result of
                  the performance of work on the Premises by the Lessee and/or

<PAGE>   25
[Page 13 continued]

                  any representative thereof, as well as for any damage caused
                  to any person, object and/or property connected with the
                  Lessee's possession of and/or use of the Premises. The Lessee
                  promises to indemnify the Lessor for any damage or financial
                  expense caused to the Lessor as a result of any suit or demand
                  filed against the Lessor as a result of events within the
                  limits of the liability of the Lessee.

                  In any event, the Lessee shall be responsible for returning
                  the Premises to the condition in which it was on the Transfer
                  Date.

         B.       Without derogating the aforementioned in Paragraph A above,
                  and without reducing the Lessee's liability and obligations
                  per this Agreement and in accordance with and in addition to
                  the provisions of any law, the Lessee undertakes to purchase
                  and maintain, at its expense, throughout the Term of the
                  lease, the insurance policies set forth below, and in the
                  scope and coverages as defined below.

                  The policies shall be issued by authorized insurance companies
                  in Israel, and the Lessee shall be responsible for paying the
                  premiums in full and on the due date for the entire Lease
                  Period and to meet all its obligations and declarations as
                  follows:

                  (1)      Employers Liability - the Lessee shall insure the
                           Lessee's liability to its employees, under any law,
                           with respect to bodily harm to an employee in
                           connection with its work, and as the usual limit at
                           the time the policy is written.

<PAGE>   26
[Page 14]

                  (2)      Third Party Liability - to insure the Lessee's
                           liability vis-a-vis any third party, including the
                           Lessee's guests, invitees, customers, the Lessor, and
                           anyone representing the aforementioned. This policy
                           shall provide coverage within appropriate limits of
                           liability to the satisfaction of the Lessor's
                           insurance consultants, liability for injury, loss or
                           damage to body and/or property caused to a third
                           party by the Lessee, the Lessee's property or
                           property under the Lessee's supervision or
                           responsibility, or by any action of the Lessee, its
                           employees and anyone acting under the authority of or
                           for the Lessee within the limits of its legal
                           liability.

                  (3)      Property Insurance - insurance of the contents of the
                           Premises, including improvements and investments made
                           therein of any type or kind whatsoever, of equal
                           value. This is to be against the usual risks,
                           including fire, explosion, earthquakes, water damage,
                           aircraft, collisions, strikes, riots, intentional
                           damage, burglary, and glass breakage.

                  (4)      For the removal of doubt, regarding the relationship
                           between the Lessee and the Lessor, the Lessee alone
                           shall be liable for any damage or loss to the
                           contents of the Premises and/or the equipment and the
                           installations installed therein by the Lessee. The
                           Lessee shall take out appropriate insurance for the
                           aforesaid contents, the equipment and installations
                           as it shall see fit, to include Property Insurance as
                           stated in Paragraph B 3 above.

                  (5)      The Lessee undertakes to present to the Lessor,
                           within 7 days of the latter's demand, confirmations
                           that the aforementioned insurance is in force,
                           without such presentation derogating from the
                           Lessee's liability and obligation, and without
                           imposing on the Lessor any liability or obligation
                           whatsoever.

                  (6)      Should the Lessee not fulfill its obligations per
                           this Clause, the Lessor shall have the right, but
                           shall not be obligated, to take out the insurance
                           policies or any portion thereof instead of the Lessee
                           and at the Lessee's expense, and/or to pay any sum in
                           the Lessee's place, without derogating from the
                           Lessor's right to any other relief under any law
                           and/or this Agreement, and the provisions of Clause
                           19 B of this Agreement shall apply.

                  The Lessee's taking out the aforementioned insurance policies
                  shall not in any way reduce or limit its obligations pursuant
                  to this Agreement, nor release the Lessee from its duty to
                  compensate the Lessor and/or any other person for any damage
                  incurred by them, whether directly or indirectly,

<PAGE>   27
[Page 14 continued]

                  related to the property for which the Lessee is responsible
                  and/or as a result of the Lessee's actions and/or use of the
                  Premises and/or as a result of the Lessee's failure to fulfill
                  the provisions of this Agreement and/or as a result of work
                  done on the Premises by the Lessee. Payment of any insurance
                  compensation to the Lessor shall be used only to reduce the
                  indemnification and/or compensation to which the Lessor shall
                  be entitled, as the case may be, for damage or loss.

         C.       Without derogating from the generality of the aforesaid in
                  sub-Clause A above, the Lessee shall be liable for any claims
                  by which the Lessor may be charged as a result of the breach
                  or failure to fulfill the provisions of any law or license by
                  the Lessee or as a result of the Lessee breaching any of its
                  obligations set forth in this Agreement and the Lessee shall
                  indemnify the Lessor for any expense or damage, if any, in
                  that respect.

         D.       If at all possible all insurance policies should state that
                  after any payment of compensation by the insurer, the limits
                  of liability shall automatically return to their former state.
                  The Lessee shall be responsible for payment of any additional
                  premium deriving therefrom.

         E.       The provisions of sub-clauses A - D above are principal and
                  fundamental provisions of this Agreement.

18.      Transfer and Assignment of Rights

         A.       The Lessee shall be entitled to transfer rights and
                  liabilities under this Agreement, or to permit anyone to use
                  the Premises or any part thereof (hereinafter: "the
                  Sublessee"), whether for consideration or not, conditional
                  upon receipt of the Lessor's prior written consent thereto and
                  the advance identification of any Sublessee and subject to the
                  Lessee's continuing to fulfill all of its obligations under
                  this

<PAGE>   28
[Page 15]

                  Agreement, in respect of the entire Premises, including making
                  all of the payments specified in this Agreement regarding the
                  Premises, and the Sublessee shall perform all of the terms of
                  this Agreement that apply to the Lessee, unless the Lessor has
                  given written consent in advance. The Lessor shall not
                  unreasonably withhold its consent.

         B.       The Lessor shall be entitled to sell or transfer its rights to
                  the Lot and/or the Building or in any of the units therein,
                  including the Premises and/or its rights under this Agreement,
                  or to transfer or mortgage them without giving prior notice to
                  the Lessee, provided that such does not harm the rights of the
                  Lessee under the provisions of this Agreement and/or any law.

         C.       Without derogating from the aforementioned, the Lessor shall
                  be entitled to transfer, assign, alienate and mortgage all of
                  its rights to Lease Fees under this Agreement to any other
                  person and the Lessee shall act in accordance with the written
                  instructions of the Lessor.

         D.       The provisions of sub-clauses A - C above are fundamental
                  provisions of this Agreement.

19.      Fundamental Provisions and Liquidated Damages

         A.       It is hereby agreed that the provisions of Clauses 6, 9, 10,
                  11, 12, 13, 14, 15, 16, 17, 18, 21, 22 are fundamental
                  provisions of this Agreement pursuant to the definition of
                  that term in the Contracts (Remedies for Breach of Contract)
                  Law, 5731-1970. A breach of any one of these provisions shall
                  be considered a fundamental breach of contract pursuant to the
                  definition of that term in the Contracts (Remedies for Breach
                  of Contract) Law 5731-1970.

         B.       In the event of a breach of the provisions of Sections 9, 10,
                  11, 12, 14, 16, 17, 21 of this Agreement, the Lessor shall be
                  entitled, in addition to any other relief or remedy available
                  to it, to compensation which the parties hereby agree upon and
                  set in advance in the sum of the equivalent of 6 months Lease
                  Fees (hereinafter: "Agreed Indemnification"). The Agreed
                  Indemnification shall be linked to the index calculated from
                  the basic index through to the index known on the date of
                  actual payment. The parties hereby declare that the amount of
                  Liquidated Damages was determined by them according to the
                  damage anticipated in the event of a fundamental breach of the
                  Agreement.

         C.       Without derogating from the Lessee's obligations under this
                  Agreement, it is hereby agreed that any delay in the payment
                  of Lease Fees and/or any other payment set out in this
                  Agreement shall bear interest for delay in the rate defined in
                  this Agreement, in addition to and without derogating from any
                  other relief or remedy available to the Lessor under this
                  Agreement and/or pursuant to any law.

<PAGE>   29
[Page 15 continued]

20.      Cancelation of Lease and Agreement

         The Lessee hereby agrees and promises that, notwithstanding the
         provisions of this Agreement regarding the Lease Period, the Lessor
         shall be entitled, without obligation, to cancel this Agreement, and to
         evict the Lessee from the Premises with unilateral 14-day advance
         written notice, provided that the Lessee is granted a seven day
         opportunity (in addition to the aforementioned 14 days) to remedy the
         breach in each of the following circumstances:

         A.       If the Lessee or anyone acting on its behalf has breached
                  and/or has not fulfilled one of the terms and/or obligations
                  set out in the Fundamental Provisions on time.

         B.       If a receiver and/or liquidator (including a temporary
                  receiver and/or liquidator) is appointed over the Lessee
                  and/or its assets, in whole or in part, and/or the Lessee is
                  declared bankrupt, as the case may be, and such appointment
                  and/or declaration is not withdrawn within 30 days of being
                  made.

         C.       If one or all of the guarantors is declared bankrupt and/or
                  has left the country and/or liquidators have been appointed to
                  them and/or their assets and the Lessee has not provided
                  another guarantor to the Lessor's satisfaction within 14 days
                  of the occurrence of one of the above events on the Lessee's
                  initiative.

<PAGE>   30
[Page 16]

         D.       If the Lessor and/or any of the guarantors is a corporate
                  entity and there is a change in the ownership of the Lessee
                  and/or any of the guarantors, as the case may be, which the
                  Lessor believes will harm its interests under this Agreement
                  and the Lessor has not consented to such in writing within 14
                  days of being notified of the change. The Lessee undertakes to
                  notify the Lessor of any such change within 7 days of the
                  occurrence of such a change. A "change in ownership," for the
                  purposes of this Clause, shall be a change in ownership of
                  more than 51% of the paid up and issued capital of such
                  corporation.

21.      Vacating the Premises

         A.       The Lessee hereby undertakes to vacate the Premises at the end
                  of the Lease Period or upon rescission this Agreement,
                  whichever is the earlier, and as the case may be, and to
                  return the Premises to the Lessor's exclusive possession in
                  the condition that it was in on the Delivery Date, subject to
                  reasonable and acceptable wear and tear.

         B.       In addition, and without derogating from the relief and
                  remedies available to the Lessor under the provisions of this
                  Agreement and/or the provisions of any law, the Lessee hereby
                  promises that should it fail to vacate the Premises as stated
                  in sub-Clause A above, it shall pay the Lessor usage fees
                  agreed upon and set in advance in the sum equivalent of three
                  times the daily Lease Fee). This sum shall be linked to the
                  index from the basic index through to the index published on
                  the date the Premises must be vacated pursuant to sub-clause
                  A. above, until the index published on the date of actual
                  payment.

         C.       Upon vacating the Premises, the Lessee may take with it all
                  movable appliances, excluding permanent systems, that it
                  placed in the Premises at its expense and which are able to be
                  disassembled (hereinafter: "the Appliances"), provided that
                  the Lessee bears the expense of any repair required due to the
                  aforementioned disassembly in order to restore the Premises to
                  the condition it was in on the Delivery Date as set out in
                  sub-Clause A above. Such repairs shall be completed prior to
                  the end of the Lease Period or prior to cancelation thereof
                  pursuant to this Agreement. If the Lessee fails to disassemble
                  the fixtures or any part thereof as set out above, the Lessor
                  shall be entitled, at its discretion, to demand the
                  disassembly and removal thereof, or, alternatively, to receive
                  title to them without any obligation to pay any
                  indemnification and/or refund. Should the Lessor demand the
                  removal of such fixtures within 7 days of the termination or
                  cancelation of the Lease Period, then, for the purposes of the
                  payment of usage fees as set out in sub-Clause B above, the
                  Lessee shall be deemed not to have vacated the Premises for so
                  long as the Lessee does not disassemble and remove the
                  Fixtures from the Premises

<PAGE>   31
[Page 16 continued]

                  and does not return the Premises to the condition that it was
                  in on the Delivery Date.

         D.       The provisions of sub-clauses A - C above are fundamental
                  provisions of this Agreement.

22.      Guaranties

         In guarantee of the performance of all of its obligations under this
         Agreement, the Lessee shall deposit the following guaranties upon
         signing this Agreement, as a pre-condition for taking possession of the
         Premises:

         A.       An option to be granted to Rotem Local Communications Networks
                  Ltd. (hereinafter: "Rotem"), or to such person as Rotem may
                  instruct, for the purchase of 456 preference shares of NIS
                  1.00 par value each in the Lessee, at an exercise price of
                  1.00 NIS each. The Lessee undertakes that, in the event that
                  an investment is made in the Lessee or shares in the Lessee
                  (excluding options) are allotted at a share price of less than
                  $160 per share, the number of shares as stated above shall be
                  adjusted in such a way as the total value of the shares shall
                  be at least $72,900.

                  A condition of the said deed of option shall be that, upon
                  receipt of notice from the Lessor that one of the events
                  detailed in sub-Clause C below allowing the Lessor to exercise
                  the Guaranties has occurred, the Lessor shall be entitled,
                  immediately and without condition, to exercise the option at
                  the price set forth above. The Lessee undertakes immediately
                  to allot to Rotem or such person as it may instruct in
                  writing, such number of preference shares the total value of
                  which is at least $72,900, or at least 456 shares (even if
                  their value is greater than $72,900).

                  The value of the shares shall be determined in accordance with
                  the share price in the most recent allotment of shares in the
                  Lessee.

<PAGE>   32
[Page 17]

                  The Lessor shall be authorized to review the Lessee's books
                  once every three months. The Lessee shall transfer current
                  reports setting out all investments made in the Lessee, for
                  review by the Lessor.

                  On the date of signing this Agreement, the Lessee shall
                  provide the Lessor with minutes of a meeting of the board of
                  directors of the Lessee approving the issue of the option and
                  the option certificate.

                  The Lessee promises to ensure the maintenance of the rights of
                  the Lessor and of Rotem, or of any person acting on their
                  behalf, under this sub-Clause, at all times and that such
                  shall be mentioned and affirmed in any agreement to which the
                  Lessee is a party and that such shall not be harmed for any
                  reason. In the event of a purchase of more than 50% of the
                  Lessee's assets and/or a merger of the Lessee with another
                  company, the Lessee undertakes to (1) provide a bank guarantee
                  to the Lessor as detailed below, or alternatively, at the
                  Lessee's discretion, (2) to cause the option for the purchase
                  of shares referred to in this Clause above to set out and deal
                  with shares in the company that were purchased or merged with
                  the Lessee as stated above, maintaining the monetary value of
                  the option, viz. $72,900.

                  The Lessee shall be entitled to convert its obligations under
                  the aforementioned Clause, at any time, and in any event shall
                  be required to do so immediately at the end of 3 years from
                  the date of signing of this Agreement, into an unconditional
                  bank guarantee, the form of which shall be approved by the
                  Lessor in writing in advance, and in the NIS equivalent of
                  $72,900 for up to 3 months following the termination of the
                  Lease Term.

                  The Lessor shall return the deed of option to the Lessee in
                  exchange for the bank guaranty as stated, or 3 months after
                  the termination of the Lease Term, whichever is the earlier.

         B.       A promissory note, in the NIS equivalent of the Lease Fees for
                  6 months, viz. NIS [handwritten number: 171,990] (hereinafter:
                  "Promissory Note").

                  The Promissory Note shall be to the order of the Lessor and
                  shall be negotiable. The sum of the Promissory Note shall be
                  linked to the index, from the basic index through to the index
                  known at the time of exercise of the Promissory Note.

                  The date of payment of any Promissory Note shall be left blank
                  and the Lessor may fill in the date of payment at its
                  discretion, in accordance with the terms of this Agreement.
                  The Lessor may also write in any details not set out therein,
                  so as to present it for payment. The Lessee's signature on
                  this Agreement shall constitute its irrevocable permission to
                  fill in the date of payment and any other detail as stated.

                  All Promissory Notes shall be guaranteed by Air Optics Inc.

                  The Promissory Note shall be in the form set out in Appendix E
                  to this Agreement.

<PAGE>   33
 [Page 17 continued]

                  Should the Lessee exercise its right to extend the Lease, the
                  Lessee shall provide the Lessor with a new Promissory Note, on
                  the terms set out above in respect of the extended Lease Term
                  together with notice of exercise of such right, as a
                  precondition of the validity of such notice of exercise, or
                  shall extend the validity of the Promissory Notes already
                  provided to the Lessor. The replacement Promissory Notes or
                  the existing Promissory Note with an attached extension
                  document shall be known hereinafter as "Promissory Notes."

         C.       Without derogating from the other provisions of this
                  Agreement, the Lessor shall be authorized to exercise the
                  Promissory Note and/or the Option (hereinafter: "the
                  Guaranties"), in whole or in part, at its election, and upon
                  the giving of 7 days' advance notice, as follows:

                  (1)      In the event that the Premises are not vacated on the
                           appointed date, the Lessor shall be authorized to
                           exercise the Guaranties in whole or in part, in such
                           a way that the monies so paid shall be deemed, inter
                           alia, to be Liquidated Damages, as set out in this
                           Agreement.

<PAGE>   34
[Page 18]

                  (2)      Should the Lessee fail to make a payment under this
                           Agreement, the Lessor shall be entitled to exercise
                           the Guaranties up to the equivalent sum of the
                           payment owed together with linkage differentials,
                           fines, interest for delay and any other expense
                           incurred by the Lessor.

                           If non-payment constitutes a fundamental breach of
                           this Agreement, the Lessor shall be entitled to
                           exercise the Guaranties in the equivalent sum of the
                           payment owed or the sum of the Agreed Indemnification
                           under this Agreement, whichever is greater.

                  (3)      In the event of damage or loss caused to the Premises
                           and/or the contents thereof for which the Lessee is
                           liable, the Lessor shall be entitled to exercise the
                           Guaranties in the sum equivalent to the repair of
                           such. "Repair" may include replacement.

                  Should the Lessee fail to pay the Lease Fees for a particular
                  quarter on time, or does not pay any other sum which it owes
                  under the provisions of this Agreement, on time, the Lessor
                  shall be entitled, but not obligated, to offset any sum paid
                  to it as stated above or any portion thereof, against the sum
                  not paid on time, without derogating from any other relief or
                  remedy available to the Lessor under this Agreement and/or any
                  law.

                  If the Lessee paid the Lease Fees and other payments for which
                  it is liable under this Agreement as required, such payments
                  shall be deemed to have been full, complete and final for the
                  final quarter of the Lease Term (whatever the Lease Fees may
                  be at such time).

         D.       The provision of the Security under this Clause shall not
                  constitute a waiver by the Lessor of its right to other relief
                  against the Lessee, whether such relief is set out in the body
                  of this Agreement or is available to the Lessor under any law.

         E.       The provisions of sub-clauses A - D above are fundamental
                  provisions of this Agreement.

23.      Customary Ownership - Possession of the Premises by the Lessor

         Without derogating from the validity of the provisions of this
         Agreement, and in addition to the relief and remedies afforded to the
         Lessor under this Agreement and/or any law, it is hereby agreed as
         follows:

         A.       At the end of the Lease Period and/or in any event of the
                  expiry or cancelation of this Agreement, whichever is the
                  earlier, the Lessor shall be authorized to treat the Premises
                  or any part thereof in accordance with customary ownership.

<PAGE>   35
[Page 18 continued]

         B.       If the Lessee does not vacate the Premises at the end of the
                  Lease Period and/or upon expiration and/or cancelation of this
                  Agreement, whichever is earlier, it shall be deemed to be
                  trespassing on the Premises and any part thereof, from the
                  date on which the Lessee is required to vacate the Premises as
                  aforesaid until it is actually vacated. In such an event, the
                  Lessor shall be entitled and may prevent the Lessee or any
                  person acting on behalf of and/or representing the Lessee from
                  entering the Premises, and may make use of the Premises or any
                  part thereof. For this purpose, the Lessor shall be entitled
                  to and may, inter alia, use reasonable force, change the locks
                  on the Premises, disconnect and/or order the disconnection of
                  electricity, water, telephone, gas, air conditioning, and
                  prevent the Lessee from access and entry, including access and
                  entry to the Building.

24.     Liabilities to Discount Bank (Secured Clause, Unalterable without the
        Bank's Consent as Specified Below)

         A.       Pursuant to the Assignment of Debts Law, the Lessor assigns by
                  way of charge to the Israel Discount Bank Ltd. (hereinafter:
                  "the Bank") all of its rights to the Lessee for Lease Fees
                  under to the Lease Agreement and gives an irrevocable order to
                  the Lessee to pay all monies and make all payments owed to the
                  Lessor under the Lease Agreement to account number 344966 at
                  the Ramat Hasharon branch of the Bank only.

<PAGE>   36
[Page 19]

         B.       The Lessee is aware that a duplicate or copy of the Lease
                  Agreement shall be delivered to the Bank and that such
                  delivery represents an obligation on its part towards the Bank
                  regarding the rights granted to the Bank as stated in
                  sub-Clause A.

         C.       The Lessee is aware that the Bank's rights in the project have
                  preference and priority and no possession and/or other rights
                  in the project and/or the Premises may be transferred without
                  prior written authorization from the Bank.

         D.       The Lessee hereby forfeits any existing and/or future right to
                  file caveats in respect of the land on which the Premises is
                  situated in respect of its rights under this Agreement, in
                  whole or in part.

         E.       The Lessee declares that it is aware that the Bank holds a
                  first mortgage over the land (subject to the Bank's right of
                  industrial development as specified in the Agreement between
                  the Lessor and the Bank dated July 3, 1995) and that the
                  Bank's right shall prevail over all other, subsequent rights,
                  subject to the provisions of sub-Clause 27A2 of the aforesaid
                  Agreement above between the Lessor and the Bank.

         F.       The Lessee undertakes to sign a deed of authorization and
                  agreement to the assignment of the Lessor's rights under this
                  Agreement, in the form required by the Bank.

25.      Option to Purchase Shares in the Lessee

         On the date this Agreement is signed, the Lessee shall provide the
         Lessor with an Option Note for the purchase of 750 regular shares of
         the Lessee of NIS 1.00 par value each at an exercise price of $175 per
         share. This option shall be valid for at least three years from the
         date this Agreement is signed.

         The Option Note shall stipulate that immediately upon receipt of notice
         from the Lessor (even after the termination of the Agreement for any
         reason, and in any event no more than 3 years (subject to the
         following) from the date of signing of this Agreement), and in return
         for receipt of payment from the Lessor ($175 for each share), the
         Lessee, without any further condition, promises to allot to Rotem, or
         to such person as Rotem may appoint in writing, up to 750 shares of the
         Lessee pursuant to the amount transferred, at the discretion of Rotem
         or of such person as Rotem instructs. The payment shall be made in NIS
         at the representative exchange rate of the US Dollar on the date of
         payment. In addition, the deed of option shall state that in the event
         that the Lessee does not take advantage of the provision in sub-Clause
         11(E) above allowing it to exit the Agreement, pursuant to the
         provisions of such Clause, and the Lease Term is extended for more than
         3 years, the term of the option to purchase the shares as specified
         shall be extended for an additional two years. In such a case, the
         value of the shares shall be 15%

<PAGE>   37
[Page 19 continued]

         less than the share price at the last allotment effected in the Lessee
         (Last Trading Value), but in any event shall not be less than $175.

         At the time this Agreement is signed, the Lessee shall present the
         Lessor with minutes of a meeting of the board of directors of the
         Lessee approving the allotment of the option as aforesaid and the deed
         of option.

         The Lessee promises to ensure the maintenance of the rights of the
         Lessor and of Rotem, or of any person acting on their behalf, under
         this sub-Clause, at all times and that such shall be stated and
         affirmed in any agreement to which the Lessee is a party and that such
         shall not be harmed for any reason.

         In any case where a majority of the assets of the Lessee are purchased
         by any party, or by a merger between the Lessee and any party, or prior
         to a public offering of the stock of the company, in which the option
         set out in this Clause has yet to be exercised, the Lessor shall be
         given prior notice of such events and the Lessor shall be entitled to
         exercise the Option prior to executing the aforementioned actions.

26.      Miscellaneous

         A.       The headings in this Agreement have been inserted for the sake
                  of convenience only and shall not serve for the interpretation
                  of the Agreement.

         B.       The Appendices attached to this Agreement constitute an
                  integral part of this Agreement.

<PAGE>   38
    [Page20 - NOTE THAT THE ORIGINAL DOCUMENTS HAD TWO COPIES OF PAGE 20, ONE
         COPY STARTS WITH CLAUSE C AND THE OTHER WITH CLAUSE F]

         C.       If either of the Parties to this Agreement has paid any sum to
                  the other Party for which the other Party is liable pursuant
                  the provisions of any law or the provisions of this Agreement,
                  after providing advance written notice of 7 days, the owing
                  Party shall refund the sum so paid to the paying Party,
                  together with interest for delay, from the date of payment by
                  the paying Party through to the date of actual refund by the
                  owing Party.

         D.       The Parties elect that Tel Aviv-Jaffa shall be the place of
                  exclusive jurisdiction for the purposes of the provisions of
                  this Agreement.

         E.       Any alteration or amendment or alteration to this Agreement or
                  to any of the terms and conditions hereof shall be in writing
                  and signed by both Parties.

         F.       The consent of the Lessor to a deviation from any of the
                  conditions of this Agreement shall not constitute a precedent
                  and/or shall not represent a waiver and shall not be deemed a
                  precedent for any similar occurrence.

         G.       The Lessee hereby declares that it has been expressly made
                  aware that attorneys Yael Langer and/or Amit Vengrovich and/or
                  Dena Dotan and/or Sharon Rosenzweig represent the Lessor only
                  in this Agreement and this transaction and that the Lessee has
                  the right to be represented by another attorney.

         H.       Stamp fees for this Agreement shall be borne by the Lessee.

         I.       The addresses of the Parties for the purposes of this
                  Agreement shall be as set out in the Introduction, and any
                  notice to be delivered pursuant to or in connection with this
                  Agreement shall be in writing and shall be delivered by hand
                  or by registered mail to these addresses. Notwithstanding the
                  foregoing, after this Agreement is signed, the address of the
                  Lessee shall be the address of the Premises. If a notice is
                  sent by registered mail, it shall be deemed to have been
                  received and to be in the possession of the receiving party
                  within 72 hours it is sent to him.

         J.       This Agreement is a true reflection of the agreement between
                  the Parties. No representation and/or obligation not expressed
                  in this Agreement shall have any force or effect. Any
                  representation and/or agreement and/or obligation prior to
                  this Agreement is hereby nullified.

         In witness whereof, we have signed hereunder:

         Kaps Pharma Ltd.                       Jolt, Ltd.
         [Illegible Signature]                  [David Medved]
         Kaps Pharma Ltd.                       Jolt, Ltd.

<PAGE>   39
[Page 20 continued]

                           Certification of Attorney

As attorney for Jolt Ltd., Company no. 511573594 (the Lessee), I, the
undersigned, Attorney ___________, confirm that Mr. __________ signed this
Agreement on behalf of the Lessee, and that such person is authorized by the
Lessee to sign this Agreement, and that its signature shall bind the Lessee in
respect of every matter connected with this Agreement.

              Attorney:  ________________   Date: _________
              Signature:  _______________

<PAGE>   40
[Page 21]

As the attorney for Kaps-Pharma Ltd., Company no. 510945355 (the Lessor), I, the
undersigned, advocate Amit Vengrovich, confirm that Ms. Dalit Brown and Mr.
Yiphtach Yifhar signed this Agreement on behalf of the Lessor, and that they are
authorized by the Lessor to sign this Agreement, and that their signatures,
jointly, shall bind the Lessor in respect of every matter connected with this
Agreement.

              Attorney:  Amit Vengrovich             Date: _________
              Signature:  __________________

<PAGE>   41
[Page 22]

                               LIST OF APPENDICES

1.  Appendix A: Drawing of Premises

2.  Appendix B: Premises Technical Specifications

3.  Appendix B1: Specifications of Adjustment Work

3.  Appendix C: Technical Areas of Public Areas

4.  Appendix D: Drawing of Parking Spaces

6.  Appendix E: Insurance Certificate for Premises

<PAGE>   42
[PAGE 23]

APPENDIX B

TECHNICAL SPECIFICATIONS FOR THE PREMISES

1.   Central Air Conditioning - Energy Center (cooling via chillers) and
     preparations for connection to storied air-conditioning.

2.   Working capacity of the floor on each level 500 Kg/m2.

3.   Smooth finished concrete floor.

4.   Plaster covered walls.

5.   Wall color Emulsion Plastic PVA white on the exterior shell.

6.   Double Draycape windows with zylon interior.

7.   Ceramic tiling in the bathrooms to a height of 2.0 meters.

8.   Electrical panels and meters for each floor connected to the Energy Center.

9.   Exterior walls finished with hewn stone.

10.  Three bathroom areas - screen wall finish

11.  Two transparent passenger elevators (connecting the parking area with the
     roof).

12.  Two transparent goods elevators (connecting the parking area with the
     roof).

13.  Open rooftop balconies finished with granolite.

<PAGE>   43
[Page 24]

Name of Company            JOLT, LTD.                     Acc't: 51-157359-4
                -------------------------------------------------------------

                                     MINUTES

                            FROM ANNUAL MEETING HELD
                             ON 12/7/92 IN JERUSALEM

                                       Attending:

                     David Medved                       Yael Medved

                                         Agenda

Elected Meeting Chairman:  Mr. David Medved

a.  Manager's Report

b.  Approval of Financial Report as of 12/31/1991

c.  Election of Managers and determination of their remuneration.

d.  Appointment of Accountant and determination of his remuneration.

e.  Miscellaneous

                                    Decisions

Following the agreement of those attending the Meeting lawfully called and
assembled, it has been decided that:

a. to approve the Manager's Report  APPROVED

b. to approve the Financial Report  APPROVED

c. No changes to the composition of the management was made, and their
remuneration shall be determined from time to time.   No Changes

d. Renewal of appointments of Amos Katz & Co, as company accountants
Appointment renewed

                                                     David Medved
                                                     Chairman<PAGE>   1

                                                                  EXHIBIT 10.10

[IN CIRCLE LETTER K]

[handwritten: New - Structure - Agreement - Y2K]

(Adjustments according to Specifications, Version 1.99

                           UNPROTECTED LEASE AGREEMENT

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S>                                                       <C>
1.  INTRODUCTION                                          20.  CANCELING THE LEASE
                                                               AND THE AGREEMENT
2.  DEFINITIONS                                           21.  VACATING THE PREMISES

3.  NON APPLICABILITY OF PROTECTED TENANT LAW             22.  GUARANTEES

4.  THE LEASE                                             23.  CUSTOMARY OWNERSHIP

5.  COMPLIANCE OF  THE PREMISES                           24.  LIABILITIES TO BANK

6.  TRANSFER DATE AND COMPLETION OF CONSTRUCTION          25.  YEAR 2000

7.  PARKING
                                                          26.  MISCELLANEOUS
8.  THE PURPOSE OF THE LEASE

9.  THE PERIOD OF THE LEASE

10. LEASE PAYMENTS

11. PAYMENT OF LEASE FEES

12. OTHER PAYMENTS

13. VALUE ADDED TAX

14. ALTERATIONS TO THE PREMISES AFTER TRANSFER DATE

15. THE USE OF THE PREMISES

16. MAINTENANCE AND REPAIRS

17. INSURANCE AND LIABILITY

18. TRANSFER AND ASSIGNMENT OF RIGHTS

19. FUNDAMENTAL PROVISIONS AND PRE-APPROVED COMPENSATION
</TABLE>

<PAGE>   2

(Adjustments according to Specifications, Version 1.99)

                           UNPROTECTED LEASE AGREEMENT

        Drawn up and signed in Jerusalem, on the 13th day of April, 2000

                                 BY AND BETWEEN

                  KAPS-PHARMA LTD.
                  8 HANECHOSHET ST., TEL AVIV
                  (HEREINAFTER, "THE LESSOR")
                                                         PARTY OF THE FIRST PART

                                       AND

                  JOLT LTD.
                  PRIVATE COMPANY:  511573594
                  FROM:  19 YAD HARUTZIM, JERUSALEM
                  (HEREINAFTER, "THE LESSEE")

                                                        PARTY OF THE SECOND PART

Whereas        The Lessor declares that it is entitled to be listed as the
               legitimate owner of the leasing rights for the land known as
               block 30243, section 62, lot 5 in accordance with Jerusalem
               Municipal Building Plan 2787 constituting a lot of some 7,863 sq.
               m. located in the Har Hahotzvim Industrial Zone in Jerusalem
               (Hereinafter, "the Lot"), upon which is "the Building" as defined
               below;

Whereas        The Lessee wishes to lease from the Lessor and the Lessor
               declares its desire to lease the areas of the Building defined
               hereinunder, described and designated as "the Premises," and
               pursuant and subject to the terms of this Agreement;

THEREFORE, IT IS DECLARED, STIPULATED AND AGREED BETWEEN THE PARTIES AS FOLLOWS:

1.     The Introduction to this Agreement constitute an integral part hereof.

2.     DEFINITIONS

<PAGE>   3

       [Page 2]

       In this Agreement, the terms specified below shall have the meaning set
       forth beside them.

"The Agreement":              This Agreement in its entirety including all
                              appendices.

"The Building":               The Building with 9 floors for light industry and
                              for offices and 2 underground parking.on the Lot.

"The Premises"                The office and warehouse space of 324 sq. m.
                              (gross) on the 2nd floor of the Building, as
                              delineated and indicated in red on the plan
                              attached as Appendix A to this Agreement and
                              parking space as detailed in paragraph 7
                              hereinunder.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   4

[Page 3]

"The Project Manager"         Ehud Tayar or anyone authorized by him in writing.

"Index"                       The Consumer Price Index (including fruit and
                              vegetables) published by the Central Bureau of
                              Statistics.

"Base Index"                  The index in effect on the day this Agreement is
                              signed, i.e. the index for the month of February
                              that was published on the 15th of March, 2000 and
                              which stood at 105.6 points.

"Interest on Arrears"         The total interest on arrears at the highest
                              acceptable rate prevailing in the period of
                              arrears in question at the Israel Discount Bank
                              Ltd. for unauthorized overdrafts in debitory
                              accounts. Written confirmation by a branch manager
                              of the Bank regarding the interest rate as above
                              shall serve as absolute evidence for the interest
                              rate.

3.     NON-APPLICABILITY OF THE TENANTS PROTECTION LAW

       A.     It is hereby declared that the Premises are located in a building,
              the construction of which was completed after August 20, 1968, and
              that this lease is instituted upon the express condition that the
              Tenants Protection Law (Combined Version) 5732 - 1972 and other
              tenant protection legislation according to their regulations and
              stipulations ( hereinafter: "Tenants Protection Law"), and any
              other law that shall grant the Lessee the status of protected
              Tenant shall not apply to this lease.

       B.     The Lessee hereby declares that it neither paid, nor shall pay the
              Lessor "key money" or any other such consideration for the lease
              which is not a rental payment, and that the Lessee and any proxy
              acting on its behalf shall not be a protected tenant in the
              Premises according to the law.

       C.     The Lessee hereby declares that any investment it makes in the
              Premises, including equipment and installations, shall be made for
              its needs only, and it shall be precluded from claiming that these
              investments represent "key money" or payment in accordance with
              Section 82 of the Tenants Protection Law (Combined Version) 5732 -
              1972, or any payment granting the Lessee any right to the
              Premises, and shall be precluded from requesting any total or
              partial participation or refund by the Lessor for the
              aforementioned investments.

<PAGE>   5
       [continued - p.3]

       D.     The Lessee is aware that the Premises are leased to the Lessee
              inter alia based on its aforementioned declarations, and it shall
              be precluded from raising any demands or claims whatsoever with
              respect to its status as protected tenant, or that it has any
              rights in the Premises other than those it explicitly acquires
              herein.

4.     THE LEASE

       A.     Under a lease that is not protected by the Tenants Protection Law
              the Lessor hereby leases to the Lessee, and the Lessee hereby
              leases from the Lessor, the Premises solely for the purpose of the
              Lease for the period and under the terms stipulated herein.

       B.     The Tenant hereby declares that it has seen the Premises and/or
              the plans and/or the specifications and/or the diagrams of the
              Premises, that it examined its legal status, found it commensurate
              with the Lessor's declarations for its needs, and that it hereby
              waives any claim related to the suitability of the Premises to its
              needs and/or to the declarations of the Lessor and/or the quality
              of the Premises and/or any other claim.

       C.     The rental is conditional upon the Lessee maintaining an approved
              enterprise in the Premises as defined in the Capital Investment
              Act. In any case where the Lessee shall cease to maintain an
              approved enterprise as stated, such action shall constitute a
              fundamental breach of this Agreement.

5.     COMPLIANCE OF THE PREMISES

       A.     The Lessee shall take possession of the Premises as it corresponds
              to the attached technical specifications, APPENDIX B, and the
              public areas in the building complying with the attached technical
              specifications, APPENDIX C.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   6

[page 4]

       B.     The project manager, determined by the Lessor, shall have the
              right of exclusive and final determination in every matter related
              to the condition of the Premises and its compliance with the
              technical specifications, as indicated in the aforementioned
              clause A.

6.     DATE OF TRANSFER AND COMPLETION OF CONSTRUCTION

       A.     After the Lessee has transferred to the Lessor the lease payments
              as detailed in Clause 11 C hereinafter and the guarantees pursuant
              to Clause 22, the Lessor shall complete the Premises and transfer
              possession to the Lessee by [handwritten:] 9/12/00 (hereinafter,
              "the Transfer Date).

              "Completion" means the ability to use and benefit from the
              Premises in reasonable fashion and subject to the provisions of
              this Clause below.

       B.     Without derogating from the aforementioned, a delay of up to 45
              days in the Transfer Date shall not be considered a breach of the
              Agreement, and shall not entitle the Lessee to any relief. The
              lease termination date shall be postponed in accordance with the
              delay in transfer.

       C.     Without derogating from the aforementioned Clause B, it is hereby
              agreed that the Transfer Date shall be delayed in the event of an
              Act of God, including, but not be limited to, strikes or boycotts
              in the construction industry that shall affect the pace of
              construction of the Building, states of war or mobilization of
              reserves, unexpected shortages of materials or labor,
              non-provision of electricity and/or non-connection of the Premises
              to the electrical grid, provided the liability thereof is not
              exclusively that of the Lessor, or any other reason or cause which
              is beyond the control or reasonable anticipation of the Lessor.
              According to its exclusive discretion the Project Manager shall
              determine the time period the event or Act of God is in effect,
              and the Transfer Date shall be delayed accordingly. Such a delay
              shall not be considered a breach of the Agreement and shall not
              entitle the Lessee to any relief. The termination date of the
              lease shall be postponed in accordance with the transfer delay.

       D.     The Transfer Date or the Delayed Transfer Date pursuant to Clauses
              B or C above shall hereinafter be called the "Transfer Date."

       E.     The Lessee shall take possession of the Premises on the Transfer
              Date and the Lessor shall deliver the Premises with the
              participation of a representative of the Lessee, if present, after
              receiving advance notice. They shall prepare Minutes recording the
              comments of the Lessee's representative, if any. The Lessor shall
              repair anything requiring repair in

<PAGE>   7

[P. 4 continued]

              accordance with the stipulations of the Project Manager within 45
              days of the Transfer Date.

       F.     To remove any ambiguity, it is hereby stated that the Lessor shall
              have the right, even after completion of the building, to perform
              construction and other work in areas of the building which do not
              constitute the Premises, including, but not limited to,
              development work provided that such work shall not derogate from
              the reasonable use of the Premises by the Lessee.

              Furthermore, the addition of storeys and/or partial storeys,
              and/or expansion of the usable areas of the building, and/or
              alteration of the permitted intention of certain areas in the
              building shall not be considered a violation of the Lessor's
              obligations above as long as this does not derogate from the
              reasonable use of the Premises or of its rights by the Lessee
              pursuant to this Agreement.

              The Lessor shall have the right to make alterations in the
              building plans and/or in the Premises if required to do so by any
              competent authority, and as long as such alterations shall not
              detract from the reasonable use of the Premises by the Lessee.

       G.     The Project Manager shall determine, at its discretion, as expert
              and not as arbitrator, whether the Premises are ready for transfer
              in accordance with the aforementioned terms, whether it is built
              pursuant to the specifications, whether deviations from or
              alterations in the specifications constitute significant or minor
              deviations and/or whether they and/or the works and/or alterations
              and/or additions as stated above constitute an impediment to the
              Lessee's reasonable use of the Premises.

[illegible signature]
Kaps-Pharma Ltd.

<PAGE>   8

       [Page 5]

       H.     It is hereby agreed that only during the first six month lease of
              the Lessee on the Premises, the Lessee shall have the right of
              first refusal with regard to the lease of additional office space
              on the second floor of the Building up to an additional area of
              322 m2 (hereinafter, "Additional Area") as follows: In any
              situation in which the Lessee is a potential third party for
              additional space, or to any part thereof, the Lessor shall notify
              the Lessee about the lease terms and rate of apartment rental
              offer to the Lessor by the potential Lessee. Within 3 business
              days from the aforementioned notification, the Lessee shall be
              permitted to lease the spaces under discussion under the same
              terms and at the same price offered to the Lessor by the potential
              Lessee. If the Lessee does not exercise this right, and did not
              lease the aforementioned additional space or part thereof, the
              Lessor shall have the right to lease the additional space to any
              other lessee under the terms and at the price offered to the
              Lessor by the potential Lessee. If the Lessor accepts the offer
              the conditions of which differ from the lease on the additional
              space or part thereof, it shall again offer the Lessee to exercise
              its right of first refusal, subject to the terms and
              specifications stipulated in this Clause.

7.     PARKING

              A drawing of the parking spaces of the Building are attached
              hereto as Appendix D (hereinafter, "parking space drawing"). One
              multiple parking space indicated in red on the parking space
              drawing shall be made available to the Lessee during the entire
              lease period for his exclusive use.

              In payment for use of the parking spaces, the Lessee shall pay the
              Lessor lease fees as stipulated in Clause 10 herein under.

              Under any circumstances that the Lease is terminated or cancelled,
              as the case may be, the right of use of the parking spaces shall
              also be cancelled as stated, automatically. As pertains to the
              Premises, the terms of this Agreement shall also apply to the
              parking spaces.

8.     THE PURPOSE OF THE LEASE

       A.     Without derogating from the foregoing, the purpose of the Lease is
              the management of a business for the development, production, and
              sale of electronic communications products, and on condition that
              no disturbance is caused to the other tenants of the building and
              that the usage shall not deviate from the building's building
              permit.

<PAGE>   9

[Page 5 continued]

              The Lessee shall be responsible for acquiring all necessary
              licenses for managing its businesses on the Premises, if
              necessary. Failure to acquire them shall not be a pretext for
              shortening the Lease or delaying or reducing leasing fees, even if
              the business shall close as a result of losing its license.

       B.     In the event the Lessee does not obtain a permit to conduct its
              business and/or business license for any reason whatsoever, the
              Lessee shall have no claim of any kind on any grounds against the
              Lessor, and by signing this Agreement it hereby waives such right
              in advance including but not limited to the Lessee's investment in
              the Premises.

              None of the aforementioned shall be considered as the permission
              of the Lessor for the Lessee to use the Premises and/or to manage
              a business in the Premises without a permit and/or in deviation
              therefrom.

       C.     To avoid any ambiguity, and without derogating from the foregoing,
              the parties hereby agree that liability for conducting the
              Lessee's business without the necessary legal permits shall apply
              solely to the Lessee, and it agrees to indemnify the Lessor for
              any claim and/or charge imposed on him for conducting a business
              without a legal permit and/or not acquiring the legal permits
              immediately upon first demand of the Lessor.

9.     THE TERM OF THE LEASE

       A.     Subject to the fulfillment by the Lessee of all its obligations
              pursuant to this Agreement, the Lessor hereby leases to the
              Lessee, and the Lessee hereby leases from the Lessor, the Premises
              under an unprotected Lease for a period of thirty eight and a half
              months (hereinafter, "the Basic Lease Period") which shall begin
              on the Transfer Date, until 11/27/2003.

<PAGE>   10

[Page 6]

       B.     Subject to the fulfillment by the Lessee of all its obligations
              pursuant to this Agreement, the approval of the Parties, and
              provision of notification as set forth below, the Lessee shall
              have the option of extending the Lease Term for two additional
              consecutive Lease Terms of 24 months each.

              Each 24-month period as stated above shall be hereinafter called
              "the Extended Period."

              The Lessee's notice to the Lessor regarding the Lessee's exercise
              of the option for the Extended Period shall be made in writing and
              be delivered to the Lessor at least 4 months prior to the end of
              the Basic Lease Period or the previous Extended Period, as the
              case may be. The Lessee shall attach to the above letter
              guaranties as specified in Clause 22 below.

              Lease payments during the Extended Period shall be updated per
              Clause 10 B below.

              Subject to the above, all the terms of the Lease set forth in this
              Agreement shall also apply to the Lessee for the Extended Period.

              In this Agreement, the Basic Lease Period as well as the Extended
              Periods shall be called, for the sake of brevity, "the Lease
              Term."

10.    LEASE PAYMENTS

       A.     For the Basic Term of the Lease the Lessee shall pay the Lessor
              monthly lease payments for the Premises as follows: For the office
              space - 11.5 dollars per square meter, as specified in Clause 2
              below, totaling 3,726 dollars per month. For the storage space -
              the Parties agree that 36 square meters of warehouse space leased
              to the Lessee per this Agreement shall be leased at no cost, and
              that for the remaining warehouse space of the Premises per this
              Agreement, the Lessee shall pay an amount of 7 dollars per square
              meters as stipulated in Clause 2 above, i.e. 707 dollars per
              month. For the parking - sum of 110 dollars. Total lease payments
              - 4,543 dollars per month (hereinafter: "the Basic Lease Fees").

       B.     At the beginning of each Extended Lease Term, the Lease Fees shall
              be increased by 5% in relation to the Lease Fees on the date of
              the termination of the previous term (hereinafter, "the Adjusted
              Lease Fee"). The Basic Lease Fees and the Adjusted Lease Fees
              shall be called hereinafter, for the sake of brevity, "Lease
              Fees."

[Page 6 continued]

<PAGE>   11

       C.     The Lease Fees and all other payments denominated in dollars in
              this Agreement shall be converted and paid in New Shekels at the
              exchange rate published on the date of any payment notices sent to
              the Lessee, i.e., at the start of each quarter during the lease
              period, as stipulated in Clause 11 below. Without derogating from
              the provisions of this Clause, in the event that between the date
              of aforementioned payment notice and the date of actual payment,
              there shall be a devaluation of one percent or more in the value
              of the of the Dollar, then within 7 days from the date of the
              payment notice the Lessee shall pay the Lessor for these
              adjustments and the adjustments of the lease fees between the date
              of transfer of the payment to the Lessor and the date of actual
              payment.

11.    PAYMENT OF LEASE FEES

       A.     As stated in Clause 10 above, the Lessee shall prepay the Lessor
              the Lease Fees and, during the Basic Lease Period, the Premises
              Adjustment Fees for every 3 months of the Lease on the first day
              of each 3-month period as stipulated herein.

       B.     All payments payable by the Lessee pursuant to this Agreement
              shall be paid by the Lessee on the payment date established by the
              Lessor by 11:00 in the morning through a deposit to the Lessor's
              account 319120 at the Israel Discount Bank Ltd., Ramat Hasharon
              Branch (hereinafter, "the Bank"). If the payment datefalls on a
              non-business day, the payment shall be made on the next business
              day thereafter (the provisions of this sub-Clause are secured and
              may not be altered without advance written notice from the Bank).

<PAGE>   12

[Page 7]

       C.     On the date this Agreement is signed and prior to the beginning of
              each Extended Period, as the case may be, and on the date
              determined by the Lessor, the Lessee shall pay the Lessor the
              Lease Fees for the first and last quarters of the Lease Term.

              Payment of the Lease Fees for the last quarter of the Lease Term
              shall serve the Lessor as specified in Clause 22 C below.

       D.     Payment by check, authorization of bank transfer and/or any other
              method of payment shall not be considered payment. Only after a
              check has cleared and/or the payment is actually transferred into
              the Lessor's account by the Bank, shall the payment be considered
              paid.

       E.     The Lessee shall pay the Lessor the Lease Fees and all other
              amounts payable by the Lessee under this Agreement for each Lease
              Term, even due to some reason for which the Lessor is not liable,
              the Lessee shall use only a portion of the Premises and/or only
              for a portion of the time, whether voluntarily or involuntarily.

       F.     The Lessee hereby waives all present and/or future claim and cause
              for writing off any amount, whether fixed or outside the Lease
              payments and/or administrative fees and/or any other payment
              payable to the Lessor pursuant to this Agreement.

12.    OTHER PAYMENTS

       A.     In addition to all the other payments set forth in this Agreement,
              the following amounts shall be payable by the Lessee:

              (1)    All taxes, fees, and levies, municipal and governmental, of
                     any type payable now or in the future by the possessor of
                     the Premises, and/or charged due to the actual use of the
                     Premises, including but not limited to general municipal
                     tax, garbage removal, and other municipal taxes, and/or
                     related to the business to be conducted by the Lessee on
                     the Premises and/or the purpose of the Lease, including
                     business tax, sign tax, fees and licenses for the business
                     and the management thereof.

              (2)    All fees and payments related to electricity consumption on
                     the Premises.

                     The Lessee shall pay amounts to the Lessor for electricity
                     consumption on the Premises as determined by the internal
                     consumption meters to be installed for the Premises as well
                     as the relative share of public electricity consumption.

<PAGE>   13

[Page 7 continued]

                     In addition, the Lessee shall pay the Lessor for
                     electricity consumption for air conditioning in the
                     Premises (except for air conditioning in public areas)
                     based on the formula stipulated in Appendix E hereof. To
                     avoid any ambiguity, the expenses for electricity for air
                     conditioning are in addition to the Lease Fees and
                     Maintenance Fees stipulated herein.

                     If the Lessee does not pay the aforementioned electricity
                     expense within 7 days from the date the Lessor's invoice
                     pertaining thereto is delivered, the Lessor has the right
                     to disconnect the supply of electricity and/or air
                     conditioning to the Premises, and stipulations of this
                     Clause constitutes a warning and ongoing advance notice to
                     the Lessee of the aforementioned disconnection in the event
                     of non-payment by the due date with no need for additional
                     warnings or notices prior to any such disconnection.

                     The Lessor shall be neither responsible nor liable for any
                     direct, consequential and/or indirect damage that may be
                     caused to the Lessee or any person, organization or
                     corporation as a result of the disconnection of electricity
                     and/or air conditioning to the Premises by the Lessor due
                     to non-payment by the due date.

              (3)    The cost of current fire protection maintenance in the
                     Premises (undertaken by Lessor).

              (4)    Maintenance services at the rate stated in Clause 16 below.

<PAGE>   14

[Page 8]

              (5)    All payments and expenses related to the provision of gas,
                     water and telephone on the Premises, and any other payable
                     amount for the use and maintenance of the Premises,
                     including its systems, including air conditioners in the
                     Premises.

       B.     In the event that any of the sums payable by the Lessee to the
              Lessor pursuant to sub-Clause A above is based upon an invoice
              relating to the entire building, the Lessee shall pay the Lessor
              an appropriate relative portion of the sum of the entire invoice,
              provided that the calculation of the Lessee's relative share of
              the aforementioned payments takes into account the ratio of the
              Premises to the overall areas for lease in the building.

       C.     The Lessor shall be responsible for property tax.

       D.     The Lessee promises to arrange and pay for cleaning the Premises
              by itself and at its expense.

13.    VALUE ADDED TAX

              The Lessee promises to pay the Lessor VAT in addition to, and
              together with, the Lease Fees, including linkage adjustments
              and/or interest on arrears, as well as any other payment which the
              Lessee is required to pay the Lessor pursuant to this Agreement,
              and/or which the Lessor paid instead of the Lessee and which
              Lessee must refund to the Lessor. This must be done against a tax
              receipt as required by law.

              The provisions of this Clause shall also be in effect in the event
              any other tax is imposed and added to, or replaces VAT under
              conditions whereby the law applies it to Lease Fees or imposes or
              permits the transfer of the debit to the Lessee. V.A.T. shall be
              treated as Lease Fees in all respects.

14.    ALTERATIONS TO THE PREMISES AFTER TRANSFER DATE

              In addition to the provisions of Clause 5 above, and after
              Transfer Date, at its own expense and liability, and after
              obtaining the Lessor's consent, the Lessee shall have the right to
              carry out, works and alterations in the Premises only (not
              including public areas, which include restrooms, kitchenettes, and
              entries) that are required by the Lessee in order to construct
              and/or move permanent or portable internal walls, to install
              telephone, air conditioning, electricity and/or communication
              systems; to connect and install its machines, computers and
              equipment; and to undertake any other or additional work or
              changes that the Lessee shall consider necessary for conducting
              its business on the Premises, excluding

<PAGE>   15

[Page 8 continued]

              alterations likely to damage the building construction, walls,
              water and electricity systems and/or alterations which might
              affect the exterior or interior building facade, or the reasonable
              use thereof by the other users of units in the building, per the
              following conditions:

              (1)    The Lessee shall submit construction plans for the above
                     for the prior, written approval of the Lessor

              (2)    The Lessor shall have the right to require changes in the
                     specifications and the details of the work, and the Lessee
                     promises to alter them as required by the Lessor, and to
                     begin the work only after the Lessor has given written
                     approval.

              (3)    The Lessor's approval for such work is conditional upon, in
                     addition to the foregoing, delivery by the Lessee to the
                     Lessor of copies of insurance policies as provided in
                     Clause 17 below.

              (4)    All work shall be carried out by skilled professionals at a
                     standard accepted for similar Hi Tech buildings in the area
                     of the Premises, pursuant to Israeli regulations, and
                     subject to the guidelines issued by the project manager.

              (5)    The Lessee shall carry out the work on the Premises in a
                     manner and form that will not interfere with operations in
                     any area of the building and/or other lessees, and the
                     Lessee hereby agrees to strictly carry out all the
                     stipulations of the Lessor, and to take all precautions to
                     prevent the aforementioned disturbances.

              (6)    The Lessee shall be liable for any damage caused during and
                     following work on the Premises, to any person and property,
                     including the building and/or to the Premises and/or to
                     other lessees and/or to other leased premises and/or to the
                     Lessor or its representatives, whether the work was carried
                     out by the Lessee or by someone else acting on its behalf.

<PAGE>   16

[Page 9]

              (7)    The Lessee agrees and affirms that any sum that it spends
                     in carrying out alterations in order to adapt the Premises
                     for its needs, as stated above, shall not grant the Lessee
                     vis-a-vis the Lessor any right to a refund or payment for
                     the sums and/or changes it made as stated above - neither
                     during the Lease Term, while vacating the Premises or
                     thereafter.

              (8)    The Lessee shall acquire and pay for all the necessary
                     licenses, certificates, and permits for carrying out the
                     alterations from the competent institutions and
                     authorities, should such be required.

15.    THE USE OF THE PREMISES

       Without derogating from the validity of the other terms of the Agreement,
       the Lessee promises as follows:

       A.     To manage the work only within the boundaries of the Premises, and
              to use the Premises only for the purpose set forth in the Lease
              and for no other purpose.

       B.     To maintain the cleanliness of the Premises and its surroundings,
              and not to place and/or keep any equipment, inventory or any
              movable property and/or any other objects in the yard and/or on
              the balconies of the Premises and/or the building and/or any other
              area outside of the Premises, and not to use any area of the
              building, except for the Premises, for any purpose whatsoever,
              except for use for the purpose of access to the Premises.

              It is hereby clarified that the Lessee has no right to install in
              the Premises dining rooms, kitchens, kitchenettes and the like
              without obtaining prior written approval from the Lessor. If such
              approval is obtained, it shall have the right to act only in
              accordance with the terms, if any, set forth in the said approval.

              If, in spite of the contents of this Clause, any of the Lessee's
              movable property are found on the balconies and/or outside of the
              Premises and if the Lessee does not remove them at first request
              of the Lessor, the Lessor shall have the right, though not the
              obligation, to remove these objects from the building and/or the
              area, at the Lessee's expense, and shall not be liable for the
              integrity of such objects.

              The failure of the Lessor to exercise the aforementioned right
              shall not constitute its consent to keeping the aforementioned
              movable property on the balconies and/or outside the Premises, nor
              shall this confer on the Lessee any right to continue to keep
              objects there, nor shall this prevent

<PAGE>   17

[Page 9 continued]

              the Lessor from taking any action to which it is entitled under
              law and/or this Agreement.

       C.     To refrain from creating any disturbance, nuisance or discomfort
              to people in or visiting the area around the Premises, including
              the neighbors and/or environs.

              The Lessee hereby promises not to introduce waste which does not
              comply with the directives of the Ministry of Health nor to allow
              such waste to flow into the sewage system.

              The Lessor shall have the right to charge the Lessee special fees
              to cover the additional expense of removing garbage from the
              building in which the Premises is located, if in the Lessor's
              opinion the amount of garbage and/or refuse produced by the Lessee
              on a current basis is excessive,

       D.     To fulfill all laws, regulations and by-laws in force, and/or that
              shall be imposed upon the Premises during the Lease Term regarding
              the use thereof and the business, work and activities carried out
              therein by the Lessee, and to be held liable by government and
              municipal institutions for the payment of any fines due to
              non-fulfillment of the stipulations of this Clause.

       E.     To access the Premises only via the access ways marked on the
              approved plan and those that will exist in the future, to park
              cars and other vehicles in spaces designated for same, and not to
              use any motor or other vehicle likely to damage the access or the
              parking areas, and to comply with the stipulations issued by the
              Lessor from time to time relating to the access and parking
              arrangements within the boundaries of the lot.

<PAGE>   18

[page 10]

       F.     To pay any specific amounts that the Lessee owes the Lessor and/or
              the appropriate authorities on the due dates for such payments.

       G.     To allow the Lessor and/or the Lessor's representative to visit
              the Premises at any reasonable time and to check its condition and
              use made thereof in order to maintain the performance of the
              provisions of this Agreement, and/or to take the action and
              exercise the means set forth in this Agreement or in any law
              requiring entry into the Premises, including:

              (1)    To make any repairs within the Premises, necessary for the
                     building or any portion thereof.

              (2)    To carry out any construction and/or demolition work which
                     the Lessor has the right to do pursuant to this Agreement.

              (3)    To show the Premises to potential buyers and/or lessees.

              (4)    If access to building systems is available through the
                     Premises, the Lessee shall permit the Lessor access to
                     those systems at any time for the purpose of repair and
                     examination. For this purpose, the Lessee shall deposit a
                     key with the Lessor that enables the Lessor to have access
                     to carry out the foregoing. The key shall be stored in a
                     locked cabinet that is under the responsibility of the
                     Lessor.

       H.     To fulfill the stipulations of the Lessor and of the competent
              authorities relating to fire fighting and prevention procedures,
              civil defense, safety and security, and to purchase at its own
              expense per the instructions of the aforementioned authorities,
              all the necessary prevention and safety equipment for the
              application and execution of the aforementioned stipulations, and
              to connect it to the panel on that floor of the building.

       I.     At the Lessor's request, and at the Lessee's expense, to demolish
              and/or to change any addition or alteration made by the Lessee to
              the Premises and/or the building not constructed in compliance
              with the terms of this Agreement, and to restore the Premises and
              the building to its original state.

       J.     The Lessee hereby promises not to hang or install any signs and/or
              other means of advertising in the area and/or in any portion of
              the building. The signs and the placement, type, size and shape
              thereof shall be determined by the Lessor, at the Lessor's sole
              discretion, and shall be installed by the Lessor at the Lessee's
              expense.

<PAGE>   19

[Page 10 continued]

       K      In order to remove all ambiguity, it is hereby explicitly
              clarified that the Lessee shall have no right to install air
              conditioners in the walls and/or windows of the Premises.

16.    MAINTENANCE AND REPAIRS

       A.     The Lessee promises to use the Premises in a cautious and
              reasonable manner, and to pay close attention throughout the
              entire Lease Term that the Premises and all of the installations
              related thereto are in working condition, operational, clean and
              orderly.

       B.     In exchange for payment of the sums set forth in Clause D below,
              the Lessor hereby promises to supply the maintenance services
              listed in Clause C below, as per the terms set forth therein.

       C.     Maintenance Services to be provided by the Lessor shall be of the
              type, scope and per the conditions set forth below:

              (1)    Structural maintenance, maintenance of mechanical systems,
                     public plumbing, public sewage, public electricity,
                     elevator maintenance, landscaping, sign maintenance, and
                     cleanliness of public areas.

              (2)    Air conditioning services, including central air
                     conditioning services, excluding servicing and maintenance
                     of air conditioning equipment in the Premises during normal
                     working days and hours. Heating shall be installed in the
                     end units.

                     The Lessor shall also provide air conditioning services
                     during the winter to the Lessee, in the scope and under the
                     conditions that the parties shall agree upon.

<PAGE>   20

[Page 11]

                     In order to remove any ambiguity, it is hereby explicitly
                     clarified that subject to the obligations of the Lessor to
                     perform repairs on any malfunctions in the air conditioning
                     system, if any. The provisions of this Agreement do not
                     make him liable regarding potential disruptions in the air
                     conditioning system, whether as a result of breakdown or
                     due to maintenance work or for any other reason, without
                     exception. The Lessee shall have no right to demand and/or
                     receive from the Lessor any compensation, and/or damages
                     and/or payment for any reason whatsoever.

                     The Lessee shall have no right to touch the air
                     conditioning units on the Premises, and/or service, and/or
                     maintain, and/or repair them, and/or perform maintenance
                     and/or any operation on them and/or to allow others (even
                     air conditioning professionals or specialists) to do any of
                     the above to the units. Should the Lessee violate the terms
                     of this paragraph and, as a result, any damage shall be
                     caused to the air conditioning units, the Lessee shall bear
                     the full cost of the repair of the damage, plus interest on
                     arrears. In order to remove any ambiguity, the Lessee shall
                     be liable for all servicing and maintenance costs of the
                     air conditioning units in the Premises.

              (3)    Preserving the environment - in a scope to be determined
                     from time to time by the Lessor, at the Lessor's exclusive
                     and sole discretion.

              (4)    Insurance - an appropriate relative portion of the expenses
                     and insurance fees that the Lessor shall pay for building
                     insurance on systems for loss or damage due to fire risk,
                     explosions, earthquake, storms and hurricanes, flood, water
                     damage, strikes, disturbances and intentional damage, as
                     well as any additional risk required by the Lessor. This
                     insurance shall not include the contents of the Premises,
                     repairs, changes and additions to the Premises made by
                     and/or for the Lessee.

              It is hereby explicitly agreed that in issuing the insurance as
              stated in this Clause there is nothing making the Lessor liable
              for any loss and/or damage to the Building.

              (hereinafter, "Maintenance Services").

       D.     In exchange for the Maintenance Services, the Lessee shall pay the
              Lessor, in addition to the Lease Fees stipulated in Clause 10
              above and the Lease fees stipulated in Clause 12 above, the sum of
              2.50 dollars per

<PAGE>   21

[Page 11 continued]

              month per square meter of the Premises, i.e. 1,152.50 dollars per
              month for the entire Premises (hereinafter, "Maintenance Fees").

              The Maintenance Fees shall be converted into Shekels on the date
              this Agreement is signed, shall constitute the basis for payment
              of Maintenance Fee ("the Principal"), and shall be paid to the
              Lessor plus linkage adjustments in the consumer price index to be
              added to the Principal. The linkage adjustments shall be
              calculated based on the increase in the new index published at the
              time of actual payment, compared with the basic index.

              The Lessee shall pay the Lessor the Maintenance Fees in advance
              for each 3 months of the Lease Term, as specified in Clause 11
              above.

       E.     Together with the maintenance fees, the Lessee shall pay the
              Lessor VAT that is applicable to these payments on the first day
              of the month.

       F.     To remove any ambiguity, it is hereby agreed that the Lessor shall
              not be considered the trustee of the Premises and/or the contents
              thereof for the purpose of the Trustee Act 5727 - 1967.

       G.     The Lessee promises to notify the Lessor, as the case may be,
              immediately and without delay, of any loss, degradation, or damage
              caused to the Premises or any portion thereof.

       H.     Without derogating from the foregoing, the Lessee promises to
              repair immediately and at its own expense, any damage or
              degradation for which the Lessee is responsible as provided in
              Clause 17 A above within seven (7) days of the occurrence.

<PAGE>   22

[Page 12]

       I.     In the event that the Lessee does not completely fulfill the an
              obligation stipulated in Paragraphs A and H above, the Lessor
              shall have the right (but is not obligated) to carry out the
              maintenance and repairs required of the Lessee, and the Lessee
              shall refund to the Lessor the monies spent immediately upon the
              Lessor's first request, and pursuant to the terms of such request.
              Nothing in this Clause shall derogate from the Lessee's duty to
              perform the repairs in the Premises himself.

17.    INSURANCE AND LIABILITY

       A.     In the relationship between the parties, and without derogating
              from the Lessee's liability under any law, the Lessee shall be
              solely liable for any damage caused to any person and/or object
              and/or property during and as a result of the performance of work
              on the Premises by the Lessee and/or any representative thereof,
              as well as for any damage caused to any person, object and/or
              property connected with the Lessee's possession of and/or use of
              the Premises. The Lessee promises to indemnify the Lessor for any
              damage or financial expense caused to the Lessor as a result of
              any suit or demand filed against the Lessor as a result of events
              which are within the boundaries of the Lessee's liability.

              In any event, the Lessee shall be responsible for returning the
              Premises to the condition in which it was on the Transfer Date.

       B.     (1) Prior to transferring occupancy or , whichever is earlier, and
              without derogating from the terms of sub-clause A above, of the
              obligations of the Lessee pursuant to this Agreement and
              requirement of any law. In addition, the Lessee promises to
              purchase and maintain in effect throughout the period of the
              lease, the following insurance policies in the scope of coverage
              as defined below:

              (a)    Employer's Liability - the Lessee shall insure the Lessee's
                     liability to its employees, under any law, with respect to
                     bodily harm to an employee in connection with its work, and
                     as the usual limit at the time the policy is written.

              (b)    Third Party Liability - to insure the Lessee's liability
                     vis-a-vis the Lessor and any third party. The amount shall
                     not be less that the amount of New Shekels equal to
                     $500,000. The policy shall include a "cross liability"
                     clause. The policy shall be expanded to indemnify the
                     Lessor for its liability as owner and/or manager of the
                     Premises.

<PAGE>   23

[Page 12 continued]

              (c)    Property Insurance - insurance of the contents of the
                     Premises, including improvements and investments made
                     therein of any type or kind whatsoever, of equal value.
                     This is to be against the usual risks, including fire,
                     explosion, earthquakes, water damage, aircraft, collisions,
                     strikes, riots, intentional damage, burglary, and glass
                     breakage.

              (d)    Consequential Damage Insurance - Insurance against
                     consequential damage for a period of not less than 12
                     months as a result of loss or damage to the property of the
                     Lessee, the Premises, and the Building from the risks
                     indicated in Paragraph 17 B(1)(c) above.

       (2)    The following instructions shall apply to the policies indicated
              in the aforementioned Clause 17 B(a):

              a.     The Lessee shall execute the aforementioned guaranties
                     through a recognized and legally authorized insurance
                     company, update the insurance amounts, carefully carry out
                     all the directives of the policies, and pay the premiums on
                     time.

              b.     The Lessee shall arrange for the insurer to waive the right
                     of substitution in relation to the Lessor, other lessees
                     and occupants, managers and their employees, and anyone who
                     represents them. The Lessor shall be added as an insured
                     party in the policy.

              c.     At the request of the Lessor, the Lessee shall present all
                     policies issued to him to the Lessor pursuant to Clause 17
                     herein. it shall also present to the Lessor, and at its
                     request, any renewal or change to the policy, and at the
                     reasonable request of the Lessor,

<PAGE>   24

[Page 13]

                     the Lessee shall be required to add and/or update and/or
                     change the insurance policies to the satisfaction of the
                     Lessor in order that it complies with the criteria
                     stipulated in Clause 17 herein.

              d.     The Lessee promises to use the funds received by the
                     insurance company pursuant to the policies only for the
                     purpose of immediately fixing the damage and/or policies.
                     Nothing stated in the foregoing limits and/or derogates
                     from the right of the Lessor to use its rights pursuant to
                     the policies. The policy shall include a provision that the
                     Lessee and insurance company promise to act pursuant to
                     this Clause.

              e.     The insurance of the Lessee shall be defined as
                     "first-party insurance," and shall include an explicit
                     condition according to which such insurance takes
                     precedence over any other insurance written by the Lessor.
                     This insurance shall award the Lessor with the full
                     indemnification to which it is entitled pursuant to the
                     terms of the insurance, without requiring the insurers of
                     the Lessor to participate in covering damage or liability
                     pertaining to the Lease Agreement. Similarly, the policies
                     shall include a provision according to which they shall not
                     be reduced, cancelled or expire unless the Lessor receives
                     written notification by registered mail 60 days in advance.

              f.     The Lessee declares that it shall make no claim, demand or
                     complaint against the Lessor, the service company or other
                     residents for any damage for which it is entitled to
                     indemnification pursuant to the insurance that it promises
                     to take according to this Clause, and it hereby exempts the
                     Lessor and other lessees and occupants in the Building from
                     any liability for the aforementioned damage.

                     The fact that the Lessee takes out the aforementioned
                     insurance in no way reduces or derogates from the
                     obligations of the Lessee pursuant to this Agreement, and
                     in no way releases him from its obligation to indemnify the
                     Lessor and/or any other person for any damage it causes
                     either directly or indirectly in relation to the property
                     for which it is liable and/or as a result of the activity
                     and/or the use by the Lessee of the Premises and/or as a
                     result of non-fulfillment of the terms of this Agreement by
                     the Lessee and/or as a resulting of the execution of work
                     at the Premises by the Lessee. Payment of any insurance
                     benefits to the Lessor shall in no way be deducted from the
                     indemnification and/or compensation to which the Lessor
                     shall be entitled, as the case may be, for damage or loss.

<PAGE>   25

[Page 13 continued]

                     The provisions of this Clause shall add to, and not
                     derogate from, any other provision of this Agreement
                     pertaining to exemption from liability vis-a-vis the Lessor
                     and the imposition of liability on the Lessee.

                     Without any requirement for a request by the Lessor, the
                     Lessee promises to submit to the Lessor no later than the
                     Transfer Date, or before the delivery date of any property
                     to the Premises, certification of issued insurance for the
                     Premises pursuant to the form "Premises Insurance
                     Certification" appended hereto as Appendix F signed by the
                     insurer. The Lessee declares that it is aware that
                     presentation of the aforementioned Premises Insurance
                     Certification is a starting and pre-condition for the
                     beginning of the activities of the Lessee in the Premises
                     and delivery of any of the aforementioned property to the
                     Premises. The Lessor shall have the right to prevent the
                     Lessee from carrying out its activity in the Premises and
                     delivery of the aforementioned property in the event that
                     the aforementioned certification is not presented to him
                     before the aforementioned date.

              g.     The Lessee promises to fulfill the terms of the policies,
                     to pay the insurance fees in full and on time, and to make
                     sure and ascertain that the insurance policies for the
                     Premises are renewed from time to time as needed, and that
                     they are in effect through the entire lease period.

              h.     If the Lessee does not fulfill its obligation pursuant to
                     this entire Clause 17, the Lessor shall have the right,
                     though not the obligation, to take out insurance or a
                     portion thereof in place of the Lessee at

<PAGE>   26

[Page 14]
                      its own expense, and to pay any sum in its stead without
                      derogating from the right of the Lessor to any other
                      relief. In this event, the Lessor shall be entitled to be
                      reimbursed for its expenses relating thereto, plus arrears
                      interest as stipulated in Clause 2 above.

       (3)    Without derogating from the terms of sub-clause a. above, the
              Lessor shall be liable for any claim that the Lessor may be
              obligated for as a result of the violation of the obligations of
              the Lessee pursuant to the terms of this Agreement, and it shall
              indemnify the Lessor for any expense or damage that may exist
              pertaining thereto.

       (4)    If possible, it should be stated in all insurance that following
              each payment of indemnification by the insurer, the limits of
              liability are to be restored to their former state. The Lessor
              shall be liable for payment of the required additional premium
              resulting therefrom.

18.    Transfer and Assignment of Rights

       A. The Lessee shall not be entitled to transfer rights and liabilities
       under this Agreement, or to permit anyone to use the Premises or any part
       thereof, whether for consideration or not, either directly or indirectly,
       without the prior written consent of the Lessor. The Lessor shall not
       unreasonably withhold its consent.

       B. The Lessor shall be entitled to sell or transfer its rights to the Lot
       and/or the Building or in any of the units therein, including the
       Premises and/or its rights under this Agreement, or to transfer or
       mortgage them without giving prior notice to the Lessee, provided that
       such does not harm the rights of the Lessee under the provisions of this
       Agreement and/or any law.

       C. Without derogating from the aforementioned, the Lessor shall be
       entitled to transfer, assign, alienate and mortgage all of its rights to
       Lease Fees under this Agreement to any other person and the Lessee shall
       act in accordance with the written instructions of the Lessor.

19.    Fundamental Provisions and Liquidated Damages

       A. It is hereby agreed that the provisions of Clauses 6(A), 8(A), 9, 10,
       11, 12(A), 13, 14, 15(A)(B)(H), 16(C)(D)(E), 17, 18(A), 21 and 22 are
       fundamental provisions of this Agreement pursuant to the definition of
       that term in the Contracts (Remedies for Breach of Contract) Law,
       5731-1970. A breach of any one of these provisions shall be considered a
       fundamental breach of contract pursuant to the definition of that term in
       the Contracts (Remedies for Breach of Contract) Law 5731-1970.

<PAGE>   27

[Page 14 continued]

       B. In the event of a breach of the provisions of Sections 9, 10, 11,
       12(A), 14, 16(C)(D)(E), 17 and 21 of this Agreement, the Lessor shall be
       entitled, in addition to any other relief or remedy available to him, to
       compensation which the parties hereby agree upon and set in advance in
       the sum of the equivalent of 6 months Lease Fees plus VAT, as they shall
       be from time to time (hereinafter, "Agreed Indemnification"). The Agreed
       Indemnification shall be linked to the index calculated from the basic
       index through to the index published on the date of actual payment. The
       Parties hereby declare that the amount of Liquidated Damages was
       determined by them according to the damage anticipated in the event of a
       fundamental breach of the Agreement.

       C. Without derogating from the Lessee's obligations under this Agreement,
       it is hereby agreed that any delay in the payment of Lease Fees and/or
       any other payment set out in this Agreement shall bear interest for delay
       in the rate defined in this Agreement, in addition to and without
       derogating from any other relief or remedy available to the Lessor under
       this Agreement and/or pursuant to any law.

       20. Cancelation of Lease and Agreement

              The Lessee hereby agrees and promises that, notwithstanding the
              provisions of this Agreement regarding the Lease Term, the Lessor
              shall be entitled, without obligation, to cancel this Agreement,
              and to evict the Lessee from the Premises with unilateral 14-day
              advance written notice, provided that the Lessee is granted

<PAGE>   28

[Page 15]

       a seven day opportunity to remedy the breach in each of the following
       circumstances:

       A.     If the Lessee or anyone acting on its behalf has breached and/or
              has not fulfilled one of the terms and/or obligations set out in
              the Fundamental Provisions on time.

       B.     If a receiver and/or liquidator (including a temporary receiver
              and/or liquidator) is appointed over the Lessee and/or its assets,
              in whole or in part, and/or the Lessee is declared bankrupt, as
              the case may be, and such appointment and/or declaration is not
              withdrawn within 30 days of being made.

       C.     If the Lessee and/or any of the guarantors is a corporation, and a
              change of ownership of the Lessee and/or one of the guarantors, as
              the case may be, and the Lessor did not agree to same in writing
              within 14 days from the day it learned of the change, the Lessee
              promises to inform the inform the Lessor about any such change
              within 7 days of when the change occurred .

       21. Vacating the Premises

       A.     The Lessee hereby promises to vacate the Premises at the end of
              the Lease Term or upon cancelation of this Agreement, whichever is
              earlier and as the case may be, and to return the Premises to the
              Lessor's exclusive possession in the condition that it was in on
              the Delivery Date, clean and repainted with Tambor Supercryl paint
              (in the color the Premises were received), subject to reasonable
              and acceptable wear and tear.

       B.     In addition, and without derogating from the relief and remedies
              available to the Lessor under the provisions of this Agreement
              and/or the provisions of any law, the Lessee hereby promises that
              should it fail to vacate the Premises as stated in sub-Clause A
              above, it shall pay the Lessor usage fees agreed upon and set in
              advance in the sum $569 ((the equivalent of three times the daily
              Lease Fee). This sum shall be linked to the index from the basic
              index through to the index published on the date the Premises must
              be vacated pursuant to sub-clause A. above, until the index
              published on the date of actual payment.

<PAGE>   29

[Page 15 continued]

       C.     Upon vacating the Premises, the Lessee may take with it all
              movable appliances, excluding permanent systems, that it placed in
              the Premises at its expense and which are able to be disassembled
              (hereinafter: "the Appliances"), provided that the Lessee bears
              the expense of any repair required due to the aforementioned
              disassembly in order to restore the Premises to the condition it
              was in on the Delivery Date as set out in sub-Clause A above. Such
              repairs shall be completed prior to the end of the Lease Term or
              prior to cancelation thereof pursuant to this Agreement. If the
              Lessee fails to disassemble the fixtures or any part thereof as
              set out above, the Lessor shall be entitled, at its discretion, to
              demand the disassembly and removal thereof, or, alternatively, to
              receive title to them without any obligation to pay any
              indemnification and/or refund. Should the Lessor demand the
              removal of such fixtures within 7 days of the termination or
              cancelation of the Lease Term, then, for the purposes of the
              payment of usage fees as set out in sub-Clause B above, the Lessee
              shall be deemed not to have vacated the Premises for so long as
              the Lessee does not disassemble and remove the Fixtures from the
              Premises and does not return the Premises to the condition that it
              was in on the Delivery Date.

       22. Guaranties

              In guarantee of the performance of all of its undertakings under
              this Agreement, the Lessee shall deposit the following guaranties
              upon signing this Agreement, as a pre-condition for taking
              possession of the Premises:

       A.     An unconditional autonomous bank bond payable at first request,
              and without explanation, in the amount in New Shekels equal to
              $26,652 (twenty six thousand six hundred fifty two U.S. dollars)
              (hereinafter, "Bond" or "Security"). The Bond shall be payable to
              Kaps-Pharma Ltd. The Bond shall be unconditional, endorsable and
              forfeitable in full or in installments at any time. The Bond shall
              be linked to the consumer price index. The validity of the Bond
              shall begin when this Agreement is signed and for the entire Lease
              Period plus an additional 3 months. It shall be renewed from time
              to time, one month prior to the date on which it was to expire,
              and until the end of the extended Lease Period, and with 3
              additional months after the end of the Extended Lease Period. The
              Bond shall be stamped as required by law. All the expenses
              pertaining to the issuing of the Bond shall be borne only by the
              Lessee.

<PAGE>   30

[Page  16]

              In the event that the Bond is forfeited pursuant to this
              Agreement, the Lessee promises to deposit an additional Bond in
              the foregoing formula and according to the foregoing terms.

              B. Without derogating from the other provisions of this Agreement,
              the Lessor shall be authorized to exercise the Promissory Note in
              whole or in part, at its election as follows:

              (1)    In the event that the Premises are not vacated on the
                     appointed date, the Lessor shall be authorized to exercise
                     the Bond in whole or in part, in such a way that the monies
                     so paid shall be deemed, inter alia, to be Liquidated
                     Damages, as set out in this Agreement.

              (2)    Should the Lessee fail to make a payment under this
                     Agreement, the Lessor shall be entitled to exercise the
                     Bond up to the equivalent sum of the payment owed together
                     with linkage adjustments, fines, arrears interest and any
                     other expenses incurred by the Lessor.

                     If non-payment constitutes a fundamental breach of this
                     Agreement, the Lessor shall be entitled to exercise the
                     Security in the equivalent sum of the payment owed or the
                     sum of the Agreed Indemnification under this Agreement,
                     whichever is greater.

              (3)    In the event of damage or loss caused to the Premises
                     and/or the contents thereof for which the Lessee is liable,
                     the Lessor shall be entitled to exercise the Security in
                     the required sum for repair, plus 10% service charge.
                     "Repair" may include replacement.

              (3)    [sic] In order to cover its damage and expenses in any
                     event of a fundamental violation.

              (4)    In order to cover its damage and expenses in any event of a
                     violation that is not a fundamental violation, whether this
                     was not remedied within 7 days from the date a written
                     warning was issued for same by the Lessor.

       C.     With the payment of Lease Fees for the first quarter, the Lessee
              shall pay the Lessor Lease fes for the last quarter of the Lease
              Period.

              Should the Lessee fail to pay the Lease Fees for a particular
              quarter on time, or does not pay any other sum which it owes under
              the provisions of this Agreement, on time, the Lessor shall be
              entitled, but without obligation, to offset any sum paid to it as
              stated above or any portion thereof, against the sum not paid on
              time, without derogating from any other relief or remedy available
              to the Lessee disposal under this Agreement and/or any law.

<PAGE>   31

[Page 16 continued]

              If the Lessee pays the Lease Fees and other payments for which it
              is liable under this Agreement as required, such payments shall be
              deemed to have made in full, and complete and final for the final
              quarter of the Lease Term (whatever the Lease Fees may be at such
              time).

       D.     The provision of the Security under this Clause shall not
              constitute a waiver by the Lessor of its right to other relief
              against the Lessee, whether such relief is set out in the body of
              this Agreement or is available to the Lessor under any law.

23.    Customary Ownership - Possession of the Premises by the Lessor

       Without derogating from the validity of the provisions of this Agreement,
       and in addition to the relief and remedies afforded to the Lessor under
       this Agreement and/or any law, it is hereby agreed as follows:

       A.     At the end of the Lease Term and/or in any event of the expiry or
              cancelation of this Agreement, whichever is the earlier, the
              Lessor shall be authorized to treat the Premises or any part
              thereof in accordance with customary ownership.

       B.     If the Lessee does not vacate the Premises at the end of the Lease
              Term and/or upon expiration and/or cancelation of this Agreement,
              whichever is earlier, it shall be deemed to be trespassing on the
              Premises and any part thereof, from the date on which the Lessee
              is required to vacate the Premises as aforesaid until it is
              actually vacated.

<PAGE>   32

[Page 17]

              In such an event, the Lessor shall be entitled and may prevent the
              Lessee or any person acting on behalf of and/or representing the
              Lessee from entering the Premises, and may make use of the
              Premises or any part thereof. For this purpose, the Lessor shall
              be entitled to and may, inter alia, use reasonable force, change
              the locks on the Premises, disconnect and/or order the
              disconnection of electricity, water, telephone, gas, air
              conditioning, and prevent the Lessee from access and entry,
              including access and entry to the Building.

24.    Liabilities to Discount Bank (Secured Clause, Unalterable without the
       Bank's Consent as Specified Below)

       A.     Pursuant to the Assignment of Debts Law, the Lessor assigns by way
              of charge to the Israel Discount Bank Ltd. (hereinafter: "the
              Bank") all of its rights to the Lessee for Lease Fees under to the
              Lease Agreement and gives an irrevocable order to the Lessee to
              pay all monies and make all payments owed to the Lessor under the
              Lease Agreement to account number [crossed out: 344966] 37412 at
              the Ramat Hasharon branch of the Bank only.

       B.     The Lessee is aware that a duplicate or copy of the Lease
              Agreement shall be delivered to the Bank and that such delivery
              represents an undertaking on its part towards the Bank regarding
              the rights granted to the Bank as stated in sub-Clause A.

       C.     The Lessee is aware that the Bank's rights in the project have
              preference and priority and no possession and/or other rights in
              the project and/or the Premises may be transferred without prior
              written authorization from the Bank.

       D.     The Lessee hereby forfeits any existing and/or future right to
              file caveats in respect of the land on which the Premises is
              situated in respect of its rights under this Agreement, in whole
              or in part.

       E.     The Lessee declares that it is aware that the Bank holds a first
              mortgage over the land (subject to the Bank's right of industrial
              development as specified in the Agreement between the Lessor and
              the Bank dated July 3, 1995) and that the Bank's right shall
              prevail over all other, subsequent rights, subject to the
              provisions of sub-Clause 27A2 of the aforesaid Agreement above
              between the Lessor and the Bank.

       F.     The Lessee undertakes to sign a deed of authorization and
              agreement to the assignment of the Lessor's rights under this
              Agreement, in the form required by the Bank.

<PAGE>   33

[Page 17 continued]

25.    Year 2000

       The Lessee declares and promises that Y2K and any mishaps that may be
       caused to the Lessee pertaining to Y2K shall not be considered Acts of
       God, and shall not exempt him from any declaration and/or obligation
       whatsoever stipulated herein. In order to remove all ambiguity, any
       obligation of the Lessee of any kind stipulated herein shall continue to
       be in effect both in the year 2000 and thereafter as written and stated
       with no exception.

26.    Miscellaneous

       A.     The headings in this Agreement have been inserted for the sake of
              convenience only and shall not serve for the interpretation of the
              Agreement.

       B.     The Appendices attached to this Agreement constitute an integral
              part of this Agreement.

       C.     If either of the Parties to this Agreement has paid any sum to the
              other Party for which the other Party is liable pursuant the
              provisions of any law or the provisions of this Agreement, after
              providing advance written notice of 7 days, the owing Party shall
              refund the sum so paid to the paying Party, together with interest
              for delay, from the date of payment by the paying Party through to
              the date of actual refund by the owing Party.

       D.     The Parties elect that Tel Aviv-Jaffa shall be the place of
              exclusive jurisdiction for the purposes of the provisions of this
              Agreement.

       E.     Any alteration or amendment or alteration to this Agreement or to
              any of the terms and conditions hereof shall be in writing and
              signed by both Parties.

<PAGE>   34

[Page 18]

       F.     The Lessor's consent to a deviation from any of the conditions of
              this Agreement shall not constitute a precedent and/or shall not
              represent a waiver and shall not be deemed a precedent for any
              similar occurrence.

       G.     The Lessee hereby declares that it has been expressly made aware
              that attorneys Yael Langer and/or Amit Vengrovich and/or Dena
              Dotan and/or Sharon Rosenzweig represent the Lessor only in this
              Agreement and this transaction and that the Lessee has the right
              to be represented by another attorney.

       H.     Stamp fees for this Agreement shall be borne by the Lessee.

       I.     The addresses of the Parties for the purposes of this Agreement
              shall be as set out in the Introduction, and any notice to be
              delivered pursuant to or in connection with this Agreement shall
              be in writing and shall be delivered by hand or by registered mail
              to these addresses. Notwithstanding the foregoing, after this
              Agreement is signed, the address of the Lessee shall be the
              address of the Premises. If a notice is sent by registered mail,
              it shall be deemed to have been received and to be in the
              possession of the receiving party within 72 hours it is sent to
              him.

       J.     This Agreement is a true reflection of the agreement between the
              Parties. No representation and/or obligation not expressed in this
              Agreement shall have any force or effect. Any representation
              and/or agreement and/or obligation prior to this Agreement is
              hereby nullified.

In witness whereof, we have signed hereunder:

Signature & stamp                           Signature & stamp
[Illegible Signature]                       [Illegible Signature]
--------------------                        ---------------------
Kaps-Pharma Ltd.                            Jolt Ltd.

                                  Certification of Attorney

       As attorney for Jolt Ltd., Company no. 511573594 (the Lessee), I, the
       undersigned, Attorney ___________, confirm that Mr. __________ signed
       this Agreement on behalf of the Lessee, and that such person is
       authorized by the Lessee to sign this Agreement, and that its signature
       shall bind the Lessee in respect of every matter connected with this
       Agreement.

           Attorney:  ________________      Date: _________
           Signature:  __________________

<PAGE>   35

[Page 19]

                               LIST OF APPENDICES

1.     Appendix A: Drawing of Premises

2.     Appendix B: Premises Technical Specifications

3.     Appendix C: Technical Areas of Public Areas

4.     Appendix D: Canceled

5.     Appendix E: Formula for calculation of air conditioning electricity
       consumption in the Premises

6.     Appendix F: Insurance Certificate for Premises

<PAGE>   36

[Page 20]

APPENDIX A

                               DRAWING OF PREMISES

<PAGE>   37

[P. 21]

APPENDIX B

                      TECHNICAL SPECIFICATIONS FOR PREMISES

1.     FINAL WORK

-      Standard carpeting glued onto smooth concrete including cleaning at a
       ratio of 1:1 at $18/m(2) or - Heavy Duty PVC 2m(2) of one color at a cost
       of $18/m(2) including cleaning and gluing

-      For addition to anti-static PVC5x107 with an additional $5/m(2) required

-      Plaster partitionswith monochromes, including 2" acoustic insulation
       (packed at 60 kg/m(2)) at a width of 10 cm2 from floor to ceiling. For
       each 1.7m(2) of floor space, 1 m(2) plaster partitions. Green plaster
       boards and 2" fiberglass insulation will be installed in wet areas, and
       in those areas where fire protection is needed, red plaster boards and 2"
       fiberglass insulation will be installed.

-      Honeycomb face doors with 60% filler including wood frame, covered with
       white decoral and/or tree image. Fire doors to be installed where law
       requires.

-      Paint - Painting of ceilings with polyside, painting of walls with
       supercryl.

-      Acoustic ceilings to be installed according to the architect's plan wit
       variable height, with girders. Ceiling will be mineral with dimensions of
       60/60 cm(2) using Brock or Georgian models.

-      Dreikeep double glass windows and zylon in the interior.

2.     Plumbing

       A kitchenette will be installed that includes:

       Lower and upper kitchen cupboard of total length up to 4 ma.

       The cupboard will be made from sandwich board covered in formica on
       external section according to the choice of the architect.

       Cold water faucet

<PAGE>   38

[P. 21 continued]

       60 liter boiler added (additional 1,000 New Shekels)

       2 meter surface area of sink, including sink and floral faucet.

       Ceramic covering on marble surface at height of 60 cm(2) and length of 2
       meters, according to choice of architect (ceramic at base cost of 60 New
       Shekels/M(2))

3.     Electricity

       Lighting fixtures in rooms/offices to be installed at a lighting level of
       600 locks.

       The lighting fixture models will be florescent 2x36W inside the ceiling,
       including reflector and farbol louver.

       In the corridor lighting fixtures and/or P.L. assembled at a strength of
       400 locks.

<PAGE>   39

[Page 22]

       In the event of the request of the person making the order for additional
       lighting in the rooms, in addition to the specifications, a charge of $10
       per m((2)) will be added for each 100 locks.

       In the event of special lighting fixtures, the price will be determined
       based on the supplier's price list plus 17% head contractor.

       Fuse box will be provided to the tenant, the size of the connection will
       be 0.25 amper per m(2)

       Emergency and fire/smoke alarm according to office standards.

       Electrical outlets and telephone.

       Outlets will be installed in the offices for each 6 m(2) - regular outlet
       and telephone; in open areas/corridors a telephone jack and regular
       outlet at every 12 m(2).

       Computer communication - bases installed only.

In the event of unusual requests beyond what is provided in the general
specifications, a tender of contractor Moshe Sharon & Co. as the basis of
contractor offers for additions.

3.1    Telephony and Combined Communications

       In exchange for consideration in addition to the price to be detailed
       hereinafter - a combined communications and telephony infrastructure
       through a subsidiary of Red-Binat, Binat Applications.

       There are essentially two options to install this infrastructure: Option
       A - STP and Option B - UTP

       For double telephone and computer communications point pursuant to
       attached in the STP option, for each unit an addition of $215 per unit.

       This price includes an accessory communications cabinet, supply and
       installation of a double paired cable including representation of
       telephony.

       For each multiple telephone and computer communications center according
       to the characterization attached hereto as a UTP option. For each unit an
       additional $175 will be charged.

       This price includes an accessory communications cabinet, supply and
       installation of a double paired cable including representation of
       telephony.
<PAGE>   40

[Page 22 continued]

4.     Air Conditioning

       Central water cooling device supplies refrigerated water two a pair of
       pipes to the residents by central pumps. The water serves for cooling
       only. Heating made by electric heating structures connected to a private
       meter.

       Fresh air will be supplied from a central unit on the roof. In air
       filtered and heated by public electricity in the winter. In the summer,
       filtered air only. The quantity of fresh air 4.5-5 cubic millimeters per
       m(2) of floor.

       In air conditioned areas there will be an accordion coil units in sizes
       of 400CFM-2000CFM. For each unit there will be one ON-OFF control only
       (one thermostat per unit).

       The units will serve several rooms in an area of not less than 35 m(2)
       with similar air conditioning capacity. In the event of one unit for
       several rooms, the unit will be located outside of the rooms and
       climatize the rooms using a tin channel, and the thermostat will be
       located in the foyer with an emphasis on recycled air or in a typical
       room.

       For a room of an area not less than 25 m(2) - one On-Off control
       (thermostat).

<PAGE>   41
[Page 23]

Appendix C

                    Technical Specifications for Public Areas

1.     Entrance lobby to the building with marble floor, double space, acoustic
       ceiling and reception desk manned 24 hours a day.

2.     Monitoring system and central control that includes control of all the
       entries and stairways in the building. Computerized parking control,
       closed-circuit telephone systems, intercom, fire and burglar monitoring
       and alarm system.

3.     Central dining room (milk and meat).

4.     Partially paved roof, with access from elevator used for events.

5.     Open roof patios finished with granolite.

6.     Three service nuclei covered with screen walls, two moving transparent
       elevators connecting parking and the roof.

7.     Three bathroom areas.

8.     Kitchenette on each floor including cupboards and sink, ceramic or marble
       decoration on cupboards.

9.     Ceramic or marble covering in bathrooms up to height of 2.0 meters.

10.    Marble finish floor.

11.    Honeycomb ceiling, including bathtubs, lighting for florescent fixtures.

12.    Stone cut external wall finishing covering.

13.    Central air conditioning - energy center (cooling by chillers) and
       capacity ma preparation on each floor.

14.    Use for flooring on each floor - 500 kg/m(2).

15.    Extinguishers on each floor per fire protection requirements.

16.    Parking installed with smooth concrete floor finish.

17.    Central garbage room.

<PAGE>   42

[Page 23 continued]

18.    Area for assembly and disassembly of loads.

19.    Two air raid shelters.

20.    Energy center.

21.    Emergency generator.

<PAGE>   43

[Page 24]

                            DRAWING OF PARKING SPACES

<PAGE>   44

[Page 25]

Appendix E

  Formula for calculating air conditioning electricity consumption in Premises

       1.     The months of summer operation are May to November - seven months.

       2.     System operation hours: S-Th 7 am to 7 pm. On Friday, 7 am to 2
              pm.

       3.     Costs of air conditioning offices per square meter per day: 0.378
              KwH

       4.     Cost of air conditioning production rooms and high spaces per
              meter, 0.4347 KwH.

       5.     Charges per KwH change pursuant to the charge of electric company
              in [illegible] calculations. Following is the [illegible] charge
              as of 10/7/98.

       6.     A company interested in operating air conditioning during winter
              months and nights (December to April) will be charged at the air
              conditioning charge per hour according to the following formula:

                              area
                              ----
                              55 KW + 0.9 X 50

       7.     55 KwH is the cost to operate the spinning pump. In the event that
              there is demand for the air conditioning of more than one company
              the expense will be divided among the countries.

       8.     In addition to the regular air conditioning rate, the
              manufacturing companies that have systems that consume large
              amounts of energy (such as Alam Co.) will also be charged for
              energy consumption of the specific systems that discharge heat.

       9.     The formulae for charged energy consumption were made by an air
              conditioning consultant in response to our request, and according
              to data that we provided him with (the aforementioned charges are
              applicable throughout Israel).

<PAGE>   45

[Page 26]

Appendix F

                             Insurance Certification

To:

Kaps-Pharma, Ltd.
8 Hanechoshet, Tel Aviv

Re: Insurance Certification pursuant to the Lease Agreement between Kaps Pharma
Ltd. and             (hereinafter, "the Lessee") from (date):      (hereinafter,
                                   Agreement")

We, the undersigned hereby certify that we, the insurance company of the Lessee,
and that starting on we issued all the insurance policies indicated in Clause 17
of the Agreement in the name of the Lessee pursuant to the terms indicated
therein.

Signature:
          -------------------------

By:
    -------------------------------

Date:
     ------------------------------

<PAGE>   46

[Page 27]

BANK MIZRACHI

To: Kaps-Pharma, Ltd.        36792

Address: 8 Nechoshet
Town: Jerualem                                     Ref: 428788-698

                             RE: Bond No. 003100785

1. We hereby guarantee payment of any sum upp to 107,580.00 New Shekels (One
hundred and seven thousand five hundred and fifty New Shekels)

Together with index linkage adjustments, as detailed hereinafter, (hereinafter,
"bond amount"), you are due or shall be due from JOLT
LTD.***************************************************** (hereinafter,
"Debtor") pertaining to:
guaranteed payment of apartment rental*******************************

2. The Bond amount shall be linked to the Consumer Price Index (including fruits
and vegetables) (hereinafter, "the index") as follows:

a. The Index means the index published from time to time by the Central Bureau
of Statistics, and includes the same index even if it is published by any entity
or official institution who replaces it, whether or not it is built on the same
data on which the existing index is based. If another index replaces the said
index after it is published by an aforementioned entity or institution. Said
entity or institution shall not determine the relationship between the other
index and the aforementioned replacement index of the Central Bureau of
Statistics. In the event that that relationship is not determined, in
consultation with with economic experts we shall determine the relationship
between the other index and the substitute index.

b. The "basic index" means the index published for the month of 3/2000, i.e.
166.479300 points according to the 1993 base.

c. The "new index" means the recent index published before the payment of the
Bond amount. If at the time of payment of any amount pursuant to this Bond it
becomes clear that the new index is higher than the historical index, then the
amount we pay shall be calculated as it is increased in the amount equal to the
rate of the rise of the new index in comparison to the historical index. In the
event the new index is lower or equal to the historical index, the amount of the
original Bond indicated herein.

3. Within ten days from the days your first written request is received, we
shall pay you any amount indicated in the request as long as it does not surpass
the increased Bond amount, and this will be without charging you any amount to
prove or base your request, or to first request its payment from the debtor.

<PAGE>   47

[Page 27 continued]

4. Our Bond shall remain in effect until 4/10/2003 (inclusive), and any request
based on it must arrive at to the branch offices indicated hereunder no later
from the foregoing date. After that date this Bond shall be nul and void, and
any request arriving after that date shall not be answered.

5. Any amount we make pursuant to this Bond shall be made through an account
credit at a banking institution in Israel, as you inform us in the request
letter.

6. This Bond may not be transferred or assigned in any way whatsoever.

Yours truly,

[illegible signatures]

Bank Hamizrachi Hameuchad
Jerusalem Business Branch
Jerusalem

<TABLE>
<S>                   <C>                  <C>
Aharon Colombos       Eli Perlmutter       This Bond is stamped in the amount of 431.00 New
Shekels
</TABLE>

[in box illegible]

<TABLE>
<S>       <C>         <C>               <C>                 <C>   <C>    <C>      <C>    <C>     <C>
3/2/2000  107,550.00     4/10/2003                           1     10    3/1/2000         9      1
----------------------------------------------------------------------------------------------------
Value       Amount    Date of Payment   Note [illegible]    Link  Index    Link.  Value  Note    B
</TABLE>

1      1      06     30603 D.   Sherman 003100785 698    428788  003
[acr.] [acr.] [acr.] No.   Name Clerk   Bond No.  [acr.] Account Branch Sig.
                                                                        Customer

<PAGE>   48

[Page 28]

                                    OLD JOLT

NEW JOLT
4/13/2000

                     Kaps-Pharma Ltd.

<PAGE>   49

[Page 29]

[some handwriting - illegible]

Kaps-Pharma Ltd.

STAIRS

PARKING

EXIT

                     [Rest of print illegible]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]