Document:

TRANSLATION
      FOR CONVINIENCE 

     

    Second
      Addendum to the Unprotected Rental Agreement Dated July 15,
      2001

    Made
      and
      executed in Raanana, February 7, 2006

    

    Between

    Taya
      Center Ltd., Public Co. 52-002929-9

    Of
      16
      Hecharoshet St., Industrial Zone, Raanana

    Tel:
      09-7481188; Fax: 09-7485588

    (Hereinafter
      - “the
      Lessor”)

     

    First
      Party

    

    And

    Wintegra
      Ltd., Private Co. 51-290107-5

    Of
      14
      Hecharoshet St., Taya Center

    Industrial
      Zone, Raanana

    Tel:
      09-7439998, Fax: 09-7439992

    (Hereinafter
      - “the
      Lessee”)

     

    Second
      Party

    

    
      	
              Whereas

            	
              the
                Lessor and the Lessee are parties to an unprotected rental agreement
                dated
                July 15, 2001, including its various appendices, and an Addendum
                to the
                Agreement dated July 31, 2005, attached to this Addendum and constituting
                an integral part thereof (hereinafter, jointly - “the
                Rental Agreement”).

            
	 	 
	
              And
                whereas

            	
              the
                Lessee is interested in extending the Rental Period in the Premises,
                and
                in renting an additional area (as defined below) from the Lessor,
                all in
                accordance with the conditions of the Rental Agreement and of this
                Addendum.

            
	 	 
	
              And
                whereas 

            	
              the
                Parties are interested in recording these agreements in
                writing.

            
	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Accordingly,
                it has been declared, conditioned, and agreed as
                follows:

            
	 	 
	
              Additional
                Definitions
                -

            	
              In
                this Second Addendum, the following terms shall have the meaning
                recorded
                alongside:

            
	
              “The
                Premises” -

            	
              Offices
                with an area of 1,199.00 sq.m. (one thousand one hundred and ninety
                nine
                sq.m.) situated on the third floor of the Building, defined as unit
                number
                C-3, and as part of unit number C-4, at 6-8 Hamasger St. in Raanana
                (including a proportional part of the public areas and as stated
                in
                Section 2.2 of the Rental Agreement), the net area of which is marked
                in
                red on the diagram (Appendix “A”) (above and hereinafter - “the
                Premises - Area A and Area B”).

            
	 	 
	
              “The
                Additional Premises” -

            	
              Offices
                with an area of 622.00 sq.m. (six hundred twenty two square meters)
                situated on the third floor of the Building, defined as an additional
                part
                of Unit C-4, at 6-8 Hamasger St. in Raanana (including a proportional
                part
                of the public areas and as stated in Section 2.2 of the Rental Agreement),
                the net area of which is marked in red on the diagram (Appendix “A”)
                (above and hereinafter - “the
                Additional Premises - Area C”).

            
	 	 
	
              “The
                Rental Period”-

            	
              The
                rental Period stipulated in Section 4 of this Second
                Addendum.

            
	 	 
	
              “The
                Additional Base Index”
                -

            	
              the
                Index published on January 15, 2006 (for December 2005) - 110.00
                points,
                with the base of the Consumer Price Index for the year
                2000.

            
	 	 
	
              “The
                Dollar Rate”
                -

            	
              The
                representative exchange rate of the dollar as published on February
                6,
                2006 - NIS 4.699 per dollar.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	1.    	
                General

              

      

       

      
        	
              	1.1	
                The
                  Preamble to this Addendum, including the definitions and declarations
                  included therein, as well as the appendices attached thereto, constitute
                  an integral part thereof.

              

      

      

      
        	
              	1.2	
                All
                  terms defined in the Rental Agreement shall have the meaning attributed
                  thereto therein in this Addendum, unless these were amended in
                  this Second
                  Addendum.

              

      

      

      
        	2.    	
                Rental
                  of the Additional Premises

                The
                  Lessee hereby rents from the Lessor the Additional Premises, viz.
                  offices
                  with an area of 622.00 sq.m. (six hundred twenty-two square meters)
                  situated on the third floor of the Building, defined as an additional
                  part
                  of Unit C-4, at 6-8 Hamasger St. in Raanana (including a proportional
                  part
                  of the public areas and as stated in Section 2.2 of the Rental
                  Agreement),
                  the net area of which is marked in red on the diagram (Appendix
“A”)
                  (above and hereinafter - “the
                  Additional Premises - Area C.”)

              

      

      

      
        	3.    	
                Delivery
                  of Possession; Adaptations to the Premises -

                In Section 3 of the Rental
                  Agreement, with
                  respect to the Additional Premises - Area C in accordance with
                  the Second
                  Addendum to the Rental Agreement, the following changes shall be
                  made:

              

      

       

      
        	
              	3.1	
                Section
                  3.3 shall be amended to:

                “The
                  Premises shall be available for the Lessee’s possession “as is,” not later
                  than February 16, 2006, and, if necessary, immediately after the
                  signing
                  of this Addendum by the Parties, and after payment of the Rental
                  Fee as
                  detailed in Section 5.4 below.

                The Lessee declares that it
                  is aware and
                  expressly agrees that, in any case, the Lessor is not liable for
                  the
                  quality of any of the items and adaptations to the Premises, including
                  the
                  quality of carpeting, the quality of the acoustic ceilings, the
                  quality of
                  the lighting or the lack of lights, electricity infrastructure,
                  telephones, communication, etc”.

                
                  Notwithstanding
                    the above, the Lessor hereby undertakes, on the delivery of possession
                    of
                    the Premises on the above-mentioned date, the air-conditioning
                    and
                    electricity systems and the fire detection system installed in
                    the
                    Premises shall function properly.

                  As
                    stated, the Premises shall be delivered to the Lessee “as is,” and with
                    the proper functioning of the systems stated above, and in accordance
                    with
                    the procedure agreed by the Parties and as attached to this Second
                    Addendum as Appendix
                    B-3
                    below.

                

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

      
        	
              	3.2	
                Sections
                  3.5.1 through 3.5.6 in Section 3.5 of the Rental Agreement are
                  hereby
                  nullified with regard to the Additional Premises - Area C in accordance
                  with this Second Addendum.

                The Parties hereby agree that,
                  upon
                  delivery of the possession of the Premises to the Lessee, the liability
                  for all the systems installed in the Premises shall transfer to
                  the
                  Lessee.

              

      

       

      
        	
              	3.3	
                All
                  adaptation works of any type and kind (construction, electricity,
                  air-conditioning, communications, etc.) required in order to attach
                  and
                  connect the Additional Premises to the Premises also serving the
                  Lessee in
                  accordance with the Rental Agreement shall be executed solely by
                  the
                  Lessee and at its expense, through prior coordination with the
                  Lessor, as
                  required in Section 14 of the Rental
                  Agreement.

              

      

      

      
        	4.    	
                Rental
                  Period

              

      

       

      
        	
              	4.1	
                The
                  Lessor hereby lets to the Lessee, and the Lessee hereby rents from
                  the
                  Lessor, the Additional Premises - Area C, for a rental period of
                  twenty
                  two and a half (22.5) months, commencing on February 16, 2006 and
                  ending
                  on December 31, 2007 (hereinafter - “the
                  Rental Period of the Additional Premises - Area C”).

              

      

      

      
        	
              	4.2	
                The
                  Lessee hereby exercises, by its signature below, part of the optional
                  period granted to it in accordance with Section 4.2 of the Rental
                  Agreement, and undertakes to extend the Rental Agreement between
                  the
                  Parties through December 31, 2007, in accordance with all the conditions
                  as detailed in the Rental Agreement, and with the changes detailed
                  below
                  (hereinafter - “the
                  Updated Rental Period of the Three Premises Areas”).

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
              	
                4.3

              	
                At
                  the end of the Updated Rental Period, the Lessor shall have the
                  option to
                  extend the rental in accordance with the Rental Agreement and in
                  accordance with this Second Addendum for an additional rental period
                  -
                  Areas A and B of the Premises together with the Additional Area
                  of the
                  Premises - Area C - by two years, viz. from January 1, 2008 through
                  December 31, 2009 (hereinafter - “the
                  Additional Rental Period”),
                  provided that:

              

      

      
        	
              	(A)	
                through
                  the said date, the Lessee has complied fully and completely with
                  all its
                  obligations in accordance with the rental agreement, and
                  -

              

      

      
        	
              	(B)	
                the
                  Lessee has not informed the Lessor in writing of its desire not
                  to renew
                  and extend this rental agreement for the Additional Period, not
                  later than
                  six (6) months prior to the end of the preceding Rental Period,
                  viz.
                  through June 30, 2007.

              

      

      

      
        	
              	4.4	
                If
                  the validity of this Second Addendum to the Rental Agreement is
                  extended
                  on the basis of the content of Section 4.3 above, the term “Rental
                  Period,” wherever this appears in the Rental Agreement, shall include the
                  Rental Period, the Updated Rental Period, and the Additional Rental
                  Period
                  (if the option on account thereof is exercised), with those changes
                  expressly stated in this Addendum (for example, regarding the
                  determination of the Updated Rental Fee as stated in Section 5
                  below,
                  including its subsections), and with those changes as required
                  in
                  accordance with the matter, and all the provisions of the Rental
                  Agreement
                  and of the Second Addendum to the Rental Agreement (with the exception
                  of
                  the granting of the option - in accordance with Section 4.3 above)
                  shall
                  also apply to the Additional Period as stated, with those changes
                  as
                  required in accordance with the
                  matter.

              

      

      

      
        	
              	4.5	
                Notwithstanding
                  the above, the Parties hereby agree that the Lessee has the option,
                  with
                  prior notice of six (6) months, to shorten the Updated Rental Period
                  by
                  three (3) months, through September 30, 2007, or later, or to extend
                  the
                  Updated Rental Period by a period of up to three (3) months, through
                  March
                  31, 2008, or less.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                5.

              	
                Rental
                  Fee for the Areas of the Premises, and Manner of Payment
                  Thereof

              

      

      
        	
              	5.1	
                The
                  Parties hereby establish that the Rental Fee that shall be paid
                  by the
                  Lessee to the Lessor for the rental of the Additional Premises
                  - Area C
                  for the Updated Rental Period, as stated in Section 4.1 and 4.2
                  of this
                  Second Addendum, shall be in the sum of NIS 46.99 (forty-six new
                  Israeli
                  shekels and 99 agorot) (equivalent to USD 10.- US dollars) per
                  month, for
                  each square meter of the Premises, for the period between February
                  16,
                  2006 and December 31, 2007 (hereinafter - “the
                  Basic Rental Fee”).

              

      

      

      
        	
              	5.2	
                The
                  Parties further establish that the Rental Fee that shall be paid
                  by the
                  Lessee to the Lessor for the rental of Areas A and B of the Premises
                  shall
                  be in the amount of:

              

      

      
        	
              	5.2.1	
                NIS
                  61.09 (sixty one new shekels and 9 agorot) (equivalent to USD 13.-
                  US),
                  per month per square meter of the Premises, for the period between
                  February 16, 2006 and August 31, 2006 (hereinafter “the
                  Basic Rental Fee”)
                  for the period between February 16, 2006 and August 31,
                  2006;

              

      

      
        	
              	5.2.2	
                NIS
                  46.99 (forty-six new shekels and 99 agorot) (equivalent to USD
                  10.- US),
                  per month per square meter of the Premises, for the period between
                  September 1, 2006 and December 31, 2007 (hereinafter “the
                  Basic Rental Fee”)
                  for the period between September 1, 2006, and December 31,
                  2007.

              

      

      

      
        	
              	5.3	
                The
                  sum of NIS 49.34 (forty-nine new shekels and 34 agorot) (equivalent
                  to USD
                  10.50 US dollars- an addition of 5%), for the period between January
                  1,
                  2008 and December 31, 2009 (a period of two years out of the Updated
                  Rental Period), per month, for each square meter of Areas A, B
                  and C of
                  the Premises (hereinafter “the
                  Basic Rental Fee for the Additional Period”),
                  between January 1, 2008 and December 31,
                  2009.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
              	5.4	
                The
                  payments shall continue to be made quarterly, in advance. The first
                  payment, for a period of three months for the Additional Premises
                  - Area
                  C, from February 16, 2006 through May 15, 2006, is made on the
                  occasion of
                  signing this Addendum, and all remaining payments shall be made
                  as
                  aforesaid, once quarterly in advance, as stated in Section 6.5
                  of the
                  Rental Agreement between the
                  Parties.

              

      

      

      
        	
              	5.5	
                The
                  Basic Rental Fee in accordance with the content of Section 5 above
                  (including its subsections) shall be linked to changes in the Index
                  as
                  stated in Section 6.4 of the Rental Agreement. The Base Index for
                  the
                  purposes of the Rental Agreements, with its Addendums, is the Index
                  published on January 15, 2006 (for December 2005) - 110.00 points,
                  for the
                  index base from the year 2000, as stated in the definitions to
                  this Second
                  Addendum.

              

      

      

      
        	
              	5.6	
                Collection
                  of the above Rental Fee, with the addition of the maintenance fee
                  and the
                  remaining payments mentioned in the Rental Agreement, shall be
                  in
                  accordance with the content of Section 6.5 of the Rental Agreement,
                  and
                  the “standing order” for the charging of the Lessor’s account shall also
                  serve for collection of all payments required in accordance with
                  this
                  Second Addendum.

              

      

      

      
        	6.    	
                Maintenance
                  Fee / Maintenance Services Fee

                The maintenance / maintenance
                  services fee
                  and other payments that shall be made by the Lessee to the Lessor
                  for the
                  area of the Additional Premises shall be at the level and in accordance
                  with the calculation of the maintenance / maintenance services
                  fee per
                  square meter, as stated in Sections 16.1 and 16.2 (regarding maintenance
                  /
                  maintenance services fee), and Section 7.3 (regarding participation
                  toward
                  insurance fees) of the Rental
                  Agreement.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	7.    	
                Securities
                  and Guarantees

                
                  The
                    bank guarantee held by the Lessor shall be renewed for the Updated
                    Rental
                    Period in accordance with this Second Addendum, as stated in
                    Section 32 of
                    the Rental Agreement, viz. through March 31, 2008 or March 31,
                    2010,
                    insofar as the option for the Additional Rental Period is
                    exercised.

                  If
                    the bank guarantee is forfeited due to the breach of the Rental
                    Agreement
                    by the Lessee, the Lessee undertakes, by way of a fundamental
                    undertaking,
                    to furnish the Lessor with another bank guarantee, in the amount
                    of the
                    forfeited bank guarantee (linked to the Base Index in accordance
                    with the
                    Rental Agreement), not later than 7 business days after the date
                    of
                    notification of the Lessor of the forfeiting of the bank
                    guarantee.

                   

                

              

      

      
      

      
        	8.    	
                With
                  the exception of the express content of this Addendum, there is
                  not and
                  shall not be any amendment or addition or change to the Rental
                  Agreement,
                  and all the provisions of the Agreement shall apply to the Additional
                  Premises in accordance with this Second Addendum, with the changes
                  expressly stated therein, and with such changes as required in
                  accordance
                  with the matter.

              

      

      

      Witnessed
        by the signing of this Addendum

      

        
          	
                  Taya
                    Center Ltd.

                	 	
                  Wintegra
                    Ltd.

                
	 	 	 
	
                  [Signature
                    and Stamp}

                	 	
                  [Signature
                    and Stamp]

                

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Appendix
        B-3

      (Section
        3.1 of the Agreement)

      

      Specifications
        for the Delivery of the Premises to Wintegra Ltd.

      

      Area
        Defined as “the Additional Premises” on Floor 3 Is Delivered As Is and
        Includes

      

      
        	1.    	
                Gross
                  area of 622.00 sq.m., divided into -

                
                  11
                    rooms;

                  2
                    small rooms - computers and communications;

                  1
                    conference room;

                  2
                    kitchenettes, as described below;

                  Open
                    space work corners in the remaining area of the Premises as stated
                    in the
                    Divisions Plan prepared by Architect Ilan Eisen and attached
                    to the
                    agreement.

                

              

      

      

      
        	2.    	
                Secretaries
                  Corners

                Two secretarial
                  desks.

              

      

      

      
        	3.    	
                Carpeting
                  -
                  wall-to-wall carpeting throughout the
                  Premises.

              

      

      

      
        	4.    	
                Ceilings
                  -
                  acoustic ceilings from modular mineral plates, 60/60 cm, throughout
                  the
                  Premises.

              

      

      

      
        	5.    	
                Lighting
                  / lighting units
                  -
                  sunken light units (louvers) throughout the Premises, and dual
                  purpose
                  emergency / routine lighting as per the standard, in accordance
                  with as
                  made plan no. 439-102 as prepared by Engineer Yitzhak Vatnik, attached
                  to
                  the agreement.

              

      

      

      
        	6.    	
                Doors
                  -
                  painted wooden doors on all rooms; double glass entrance door.
                  Steel
                  “Pladelet” doors on the rear emergency exit and in the storeroom by the
                  small desk - opposite the executive
                  rooms.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	7.     	
                Windows
                  -
                  windows according to the standard in the building, as currently
                  comprised
                  - 50% for “dry keep” opening.

              

      

      

      
        	8.     	
                Venetian
                  blinds
                  on
                  all windows in the rooms of the
                  Premises.

              

      

      

      
        	9.     	
                Bathrooms
                  -
                  (in the public floor areas) -  3
                  units of women’s bathrooms;

                                      
3
                  units of men’s
                  bathrooms + 2 men’s
                  urinals.

              

      

       

      

      
        	10.    	
                Two
                  (2) kitchenettes
                  -
                  comprising lower utensils closet and upper utensils closet, sink,
                  and
                  marble counter in each kitchenette.

              

      

      

      
        	11.    	
                Power
                  and communications facility
                  -
                  according to as made plan no. 439-103, prepared by Engineer Vatnik,
                  attached to the agreement.

                
                  Electrical
                    board
                    -
                    according to as made plan no. 439-104, prepared by Engineer Vatnik,
                    attached to the agreement.

                  Alarm
                    system - wiring for an alarm system, including detectors, throughout
                    the
                    Premises, not connected to any central call center.

                  Power
                    outlets for UPS system in most of the area of the Premises as
                    currently
                    installed.

                

              

      

      

      
        	12.    	
                Safety
                  and PA
                  -
                  two detection and smoke systems in accordance with the fire department
                  requirements, also connected to the main coordinator in the Taya
                  Center,
                  and to PA system (??) in accordance with as made plan no.
                  _____,
                  prepared by Engineer Yitzhak Vatnik, attached to the
                  agreement.

              

      

      

      
        	13.    	
                Air-conditioning
                  (for heating and cooling)
                  10
                  split units, with a total capacity of 12 tons of refrigeration
                  (Electra-Elco) for air-conditioning of the rooms facing Hamasger
                  St., and
                  5 mini-central units (4 with double condensers) with a capacity
                  of 31 tons
                  of refrigeration (Unique) for air-conditioning the remaining areas
                  of the
                  Premises. Air-conditioning Plan No. 388-2-1 prepared by Engineer
                  Yaacov
                  Bar-Lev is attached here.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      List
        of Air-conditioning Units 

      

      
        	
                Premises

              	
                Type

              	
                Model

              	
                HP
                  BTV

              
	 	 	 	
                Ton
                  of refrigeration (TR)

              
	
                1

              	
                Mini
                  central

              	
                Unique
                  - M 3-1 - rooms 12,13,14

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                2

              	
                Mini
                  central

              	
                Unique
                  - M4-1 - corridor + rooms 15,16,17,24,25,38,39 

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                3

              	
                Mini
                  central

              	
                Unique
                  - M4-2 - corridor + rooms 18,19,20,29,30,31

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                4

              	
                Mini
                  central

              	
                Unique
                  - M4-3 - 21,22,23,26,27,28,34,35,36

              	
                3.3
                  TR - MS 400

                3.3
                  TR - MS 400

              
	
                5

              	
                Mini
                  central

              	
                Unique
                  - M6-1 - 32,87

                All
                  air conditioners are model 14 - one is slightly larger

              	
                3.3
                  TR - MS 400

              
	
                1

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 3 - M2-1

              	
                1.33
                  tons of refrigeration 

              
	
                2

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 4 - M2-2

              	
                1.16
                  tons of refrigeration 

              
	
                3

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 5 - M2-3

              	
                1.16
                  tons of refrigeration 

              
	
                4

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 6 - M2-4

              	
                1.16
                  tons of refrigeration 

              
	
                5

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 7 - M2-5

              	
                1.16
                  tons of refrigeration 

              
	
                6

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 8 - M2-6

              	
                1.16
                  tons of refrigeration 

              
	
                7

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 9 - M2-7

              	
                1.16
                  tons of refrigeration 

              
	
                8

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 10 - M2-8

              	
                1.16
                  tons of refrigeration 

              
	
                9

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 11 - M2-9

              	
                1.16
                  tons of refrigeration 

              
	
                10

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 86 (communications)

              	
                1.16
                  tons of refrigeration 

              

      

       

      
 

      
        

          
            	
                    Taya
                      Center Ltd.

                  	 	
                    Wintegra
                      Ltd.

                  
	 	 	 
	
                    [Signature
                      and Stamp}

                  	 	
                    [Signature
                      and Stamp]

                  

          

        

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Appendix
        B-3

      (Section
        3.1 of the Agreement)

      

      Specifications
        for the Delivery of the Premises to Wintegra Ltd.

      

      Area
        Defined as “the Additional Premises” on Floor 3 Is Delivered As Is and
        Includes

      

      
        	1.     	
                Gross
                  area of 622.00 sq.m., divided into -

                
                  11
                    rooms;

                  2
                    small rooms - computers and communications;

                  1
                    conference room;

                  2
                    kitchenettes, as described below;

                  Open
                    space work corners in the remaining area of the Premises as stated
                    in the
                    Divisions Plan prepared by Architect Ilan Eisen and attached
                    to the
                    agreement.

                

              

      

       

      
        	
                2.     

              	
                Secretaries
                  Corners

                Two
                  secretarial desks.

              

      

       

      

      
        	3.     	
                Carpeting
                  -
                  wall-to-wall carpeting throughout the
                  Premises.

              

      

      

      
        	4.     	
                Ceilings
                  -
                  acoustic ceilings from modular mineral plates, 60/60 cm, throughout
                  the
                  Premises.

              

      

      

      
        	5.     	
                Lighting
                  / lighting units
                  -
                  sunken light units (louvers) throughout the Premises, and dual
                  purpose
                  emergency / routine lighting as per the standard, in accordance
                  with as
                  made plan no. 439-102 as prepared by Engineer Yitzhak Vatnik, attached
                  to
                  the agreement.

              

      

      

      
        	6.     	
                Doors
                  -
                  painted wooden doors in all rooms; double glass entrance door.
                  Steel
                  “Pladelet” doors on the rear emergency exit and in the storeroom by the
                  small desk - opposite the executive
                  rooms.

              

      

      

      
        	7.     	
                Windows
                  -
                  windows according to the standard in the building, as currently
                  comprised
                  - 50% for “dry keep” opening.

              

      

      

      
        	8.     	
                Venetian
                  blinds
                  on
                  all windows in the rooms of the
                  Premises.

              

      

      

      
        	9.     	
                Bathrooms
                  -
                  (in the public floor areas) - 3
                  units of women’s bathrooms;

                3
                  units of men’s bathrooms + 2 men’s
                  urinals.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	10.    	
                Two
                  (2) kitchenettes
                  -
                  comprising lower utensils closet and upper utensils closet, sink,
                  and
                  marble counter in each kitchenette.

              

      

      

      
        	11.    	
                Power
                  and communications facility
                  -
                  according to as made plan no. 439-103, prepared by Engineer Yitzhak
                  Vatnik, attached to the agreement. 
                  Electrical
                    board
                    -
                    according to as made plan no. 439-104, prepared by Engineer Yitzhak
                    Vatnik, attached to the agreement.

                  Alarm
                    system - wiring for an alarm system, including detectors, throughout
                    the
                    Premises, not connected to any central call center.

                  Power
                    outlets for UPS system in most of the area of the Premises as
                    currently
                    installed.

                

              

      

      

      
        	12.    	
                Safety
                  and PA
                  -
                  two detection and smoke systems in accordance with the fire department
                  requirements, also connected to the main coordinator in the Taya
                  Center,
                  and to PA system (??) in accordance with as made plan no.
                  _____,
                  prepared by Engineer Yitzhak Vatnik, attached to the
                  agreement.

              

      

      

      
        	13.    	
                Air-conditioning
                  (for heating and cooling)
                  10
                  split units, with a total capacity of 12 tons of refrigeration
                  (Electra-Elco) for air-conditioning of the rooms facing Hamasger
                  St., and
                  5 mini-central units (4 with double condensers) with a capacity
                  of 31 tons
                  of refrigeration (Unique) for air-conditioning the remaining areas
                  of the
                  Premises. Air-conditioning Plan No. 388-2-1 prepared by Engineer
                  Yaacov
                  Bar-Levi is hereby attached.

              

      

       

      

      List
        of Air-conditioning Units 

      

      
        	
                Premises

              	
                Type

              	
                Model

              	
                HP
                  BTV

              
	 	 	 	
                Ton
                  of refrigeration (TR)

              
	
                1

              	
                Mini
                  central

              	
                Unique
                  - M 3-1 - rooms 12,13,14

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                2

              	
                Mini
                  central

              	
                Unique
                  - M4-1 - corridor + rooms 15,16,17,24,25,38,39 

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                3

              	
                Mini
                  central

              	
                Unique
                  - M4-2 - corridor + rooms 18,19,20,29,30,31

              	
                3.75
                  TR - MS 450

                3.3
                  TR - MS 400

              
	
                4

              	
                Mini
                  central

              	
                Unique
                  - M4-3 - 21,22,23,26,27,28,34,35,36

              	
                3.3
                  TR - MS 400

                3.3
                  TR - MS 400

              
	
                5

              	
                Mini
                  central

              	
                Unique
                  - M6-1 - 32,87

                All
                  air conditioners are model 14 - one is slightly larger

              	
                3.3
                  TR - MS 400

              
	
                1

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 3 - M2-1

              	
                1.33
                  tons of refrigeration 

              
	
                2

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 4 - M2-2

              	
                1.16
                  tons of refrigeration 

              
	
                3

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 5 - M2-3

              	
                1.16
                  tons of refrigeration 

              
	
                4

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 6 - M2-4

              	
                1.16
                  tons of refrigeration 

              
	
                5

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 7 - M2-5

              	
                1.16
                  tons of refrigeration 

              
	
                6

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 8 - M2-6

              	
                1.16
                  tons of refrigeration 

              
	
                7

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 9 - M2-7

              	
                1.16
                  tons of refrigeration 

              
	
                8

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 10 - M2-8

              	
                1.16
                  tons of refrigeration 

              
	
                9

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 11 - M2-9

              	
                1.16
                  tons of refrigeration 

              
	
                10

              	
                Split
                  - upper

              	
                Electra-Elco
                  - room 86 (communications)

              	
                1.16
                  tons of refrigeration 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
 

        
          

            
              	
                      Taya
                        Center Ltd.

                    	 	
                      Wintegra
                        Ltd.

                    
	 	 	 
	
                      [Signature
                        and Stamp]

                    	 	
                      [Signature
                        and Stamp]

                    

            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

          

            TRANSLATION
              FOR CONVINIENCE 

             

            Addendum
              to the Unprotected Rental Agreement Dated July 15,
              2001

            Made
              and
              executed in Raanana, July 31, 2004

            

            Between

            Taya
              Center Ltd., Public Co. 52-002929-9

            Of
              16
              Hecharoshet St., Industrial Zone, Raanana

            Tel:
              09-7481188; Fax: 09-7485588

            (Hereinafter
              - “the
              Lessor”)

            First
              Party

            

            And

            Wintegra
              Ltd., Private Co. 51-290107-5

            Of
              9
              Hataasiya St., Taya Center

            Industrial
              Zone, Raanana

            Tel:
              09-7439998, Fax: 09-7439992

            (Hereinafter
              - “the
              Lessee”)

            Second
              Party

            

            
              	
                      Whereas

                    	
                      the
                        Lessor and the Lessee are parties to an unprotected rental
                        agreement dated
                        July 15, 2001, including its various appendices, attached
                        to this Addendum
                        and constituting an integral part thereof (hereinafter, jointly
                        -
                        “the
                        Rental Agreement”).

                    
	 	 
	
                      And
                        whereas

                    	
                      the
                        Lessee is interested in renting an additional area (as defined
                        below) from
                        the Lessor, all in accordance with the conditions of the
                        Rental Agreement
                        and of this Addendum.

                    
	 	 
	
                      And
                        whereas 

                    	
                      the
                        Parties are interested in recording these agreements in
                        writing.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

               

            

            Accordingly,
              it has been declared, conditioned, and agreed as
              follows:

            

            
              	1.     	
                      The
                        Preamble to this Addendum, including the definitions and
                        declarations
                        included therein, as well as the appendices attached thereto,
                        constitute
                        an integral part thereof.

                    

            

            

            
              	2.     	
                      All
                        the terms defined in the Rental Agreement shall have the
                        meaning
                        attributed thereto therein in this
                        Addendum.

                    

            

            

            
              	3.     	
                      The
                        Additional Premises
                        Offices
                          with an area of 80.00 square meters (eighty square meters)
                          situated on the
                          third floor of the Building, defined as part of Unit C-4,
                          adjacent to the
                          Premises already in use by the Lessee in accordance with
                          the Rental
                          Agreement as above - at 6-8 Hamasger St., Industrial Zone,
                          Raanana
                          (including a proportionate part of the public areas as
                          stated in Section
                          2.2 of the Rental Agreement), the net area of which is
                          marked in red on
                          the Diagram (“Appendix
                          A”)
                          (above and hereinafter - “the
                          Additional Premises”).

                      

                    

            

            

            
              	4.     	
                      Delivery
                        of Possession; Adaptations to the Premises

                      InSection
                        3 of the Rental Agreement, and regarding the Additional Premises
                        in
                        accordance with the Addendum to the Rental Agreement, the
                        following
                        changes shall be made:

                    

            

            
              
                	
                      	4.1	
                        Section
                          3.3 shall be amended to:

                        
                          The
                            Premises shall be available for the Lessee’s possession “as is,” not later
                            than August 1, 2005, and, if necessary, immediately after
                            the signing of
                            this Addendum by the Parties, and after payment of the
                            Rental Fee as
                            detailed in Section 6.2 below.

                          The
                            Lessee declares that it is aware and expressly agrees
                            that, in any case,
                            the Lessor is not liable for the quality of any of the
                            items and
                            adaptations to the Premises, including the quality of
                            carpeting, the
                            quality of the acoustic ceilings, the quality of the
                            lighting or the lack
                            of lights, electricity infrastructure, telephones, communication,
                            etc.

                        

                      

              

            

            

            
              	
                    	4.2	
                      Sections
                        3.5.1 through 3.5.5 in Section 3.5 of the Rental Agreement
                        are hereby
                        nullified with regard to the Additional Premises in accordance
                        with this
                        Addendum.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            

            
              	
                    	4.3	
                      All
                        adaptation works of any type and kind (construction, electricity,
                        air-conditioning, communications, etc.) required in order
                        to attach and
                        connect the Additional Premises to the Premises also serving
                        the Lessee in
                        accordance with the Rental Agreement shall be executed solely
                        by the
                        Lessee and at its expense, with prior coordination with the
                        Lessor.

                    

            

            

            
              	5.     	
                      Rental
                        Period

                    

            

            
              	
                    	5.1	
                      The
                        Lessor hereby lets to the Lessee, and the Lessee hereby rents
                        from the
                        Lessor, the Additional Premises for a period of rental of
                        thirteen (13)
                        months, commencing on August 1, 2005 and ending on August
                        31, 2006
                        (hereinafter - “the
                        Rental Period of the Additional Premises”).

                    

            

            

            
              	
                    	5.2	
                      At
                        the end of the Rental Period, the Lessor shall have the option
                        to extend
                        the rental in accordance with the Rental Agreement and in
                        accordance with
                        this Addendum for an additional rental period - the area
                        of the Premises
                        and the area of the Additional Premises together - as stated
                        in Section
                        4.2 of the Rental Agreement, viz. from September 1, 2006
                        through August
                        31, 2009 (hereinafter - “the
                        Additional Rental Period of the Additional Premises”).

                    

            

            

            
              	6.     	
                      Rental
                        Fee for the Additional Premises and Manner of Payment
                        Thereof

                    

            

            
              	
                    	6.1	
                      The
                        Parties hereby establish that the rental fee to be paid to
                        the Lessor by
                        the Lessee for rental of the Additional Premises, for the
                        Rental Period
                        and the Additional Rental Period, as stated in Section 4.2
                        of the Rental
                        Agreement, shall be:

                    

            

            
              	
                    	6.1.1	
                      NIS
                        46.00 (forty-six new Israeli shekels), for the period between
                        August 1,
                        2005 and August 31, 2006 (a period of 13 months, from the
                        date of
                        commencement of the rental), linked to the Base Index as
                        shall be detailed
                        below, and in accordance with the provisions of the Rental
                        Agreement - per
                        month, and for each square meter of the Additional Premises
                        (hereinafter -
                        “the
                        Basic Rental Fee”).

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

             

            
              	
                    	6.1.2	
                      During
                        the Additional Rental Period, if and insofar as this is realized,
                        the
                        Lessee shall pay a Rental Fee to the Lessor in accordance
                        with the
                        evaluation of a surveyor as detailed in Section 7 of the
                        Rental
                        Agreement.

                    

            

            

            
              	
                    	6.2	
                      The
                        payments shall be made once quarterly in advance. The first
                        payment, for
                        the period of two months only, from August 1, 2005 through
                        September 30,
                        2005, is made on the occasion of the signing of this Addendum,
                        and all the
                        remaining payments shall be made, as stated, once quarterly
                        in advance, as
                        stipulated in Section 6.5 of the Rental
                        Agreement.

                    

            

            

            
              	
                    	6.3	
                      The
                        Basic Rental Fee in accordance with the content of Section
                        6.1.1 shall be
                        linked to changes in the Index as stated in Section 6.4 of
                        the Rental
                        Agreement. The Base Index for the purposes of the Rental
                        Fee for the
                        Additional Premises is the Index published on June 15, 2005
                        (for May 2005)
                        - 107.87 points, for the index base from the year
                        2000.

                    

            

            

            
              	
                    	6.4	
                      Collection
                        of the above Rental Fee, with the addition of the maintenance
                        fee and the
                        remaining payments mentioned in the Rental Agreement, shall
                        be in
                        accordance with the content of Section 6.5 of the Rental
                        Agreement, and
                        the “standing order” for the charging of the Lessor’s account shall also
                        serve for collection of all payments required in accordance
                        with this
                        Addendum.

                    

            

            

            
              	5.     	
                      Maintenance
                        Fee / Maintenance Services

                      The maintenance / maintenance
                        services fee
                        and other payments that shall be made by the Lessee to the
                        Lessor for the
                        area of the Additional Premises shall be at the level and
                        in accordance
                        with the calculation of the maintenance / maintenance services
                        fee per
                        square meter, as stated in Sections 16.1 and 16.2 (regarding
                        maintenance /
                        maintenance services fee), and in Section 7.3 (regarding
                        participation
                        toward insurance fees) of the Rental
                        Agreement.

                    

            

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            

            
              	7.     	
                      With
                        the exception of the express content of this Addendum, there
                        is not and
                        shall not be any amendment or addition or change to the Rental
                        Agreement,
                        and all provisions of the Agreement shall apply to the Additional
                        Premises
                        in accordance with this Addendum, with the changes expressly
                        stated
                        therein, and with such changes as required in accordance
                        with the
                        matter.

                    

            

            

            Witnessed
              by the signing of this Addendum

            
               

              
 

              
                

                  
                    	
                            Taya
                              Center Ltd.

                          	 	
                            Wintegra
                              Ltd.

                          
	 	 	 
	
                            [Signature
                              and Stamp]

                          	 	
                            [Signature
                              and Stamp]

                          

                  

                   

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                  

                    TRANSLATION
                      FOR CONVINIENCE 

                    

                    Unprotected
                      Rental Agreement

                    

                    Made
                      and executed in Tel Aviv, July 15th,
                      2001

                    

                    Between

                    Taya
                      Center Ltd., Public Co. 52-002929-9

                    Of
                      14
                      Hecharoshet St., Industrial Zone, Raanana

                    Tel:
                      09-7481188; Fax: 09-7485588

                    (Hereinafter
                      - “the
                      Lessor”)

                    First
                      Party

                    

                    And

                    Wintegra
                      Ltd., Private Co. 51-290107-5

                    Of
                      9
                      Hataasiya St., Taya Center

                    Industrial
                      Zone, Raanana

                    Tel:
                      09-7439998, Fax: 09-7439992

                    (Hereinafter
                      - “the
                      Lessee”)

                    Second
                      Party

                    

                    Part
                      One: Definitions and Preamble

                    

                    Definitions

                    In
                      this
                      agreement, the following terms shall have the meaning recorded
                      alongside:

                    
                      	
                              “The
                                Industrial Compound” -

                            	
                              An
                                area of approximately 13 dunams situated in the Industrial
                                Zone of
                                Raanana, known as plots 17, 18, 19, and 24 in block
                                8981, marked in brown
                                on the diagram attached to this agreement as Appendix
                                “A.”

                            
	 	 
	
                              “The
                                Building” -

                            	
                              Part
                                of a building of 4 (four) floors, with a total area
                                of approximately 9,500
                                square meters, situated in the area of the Industrial
                                Compound, and marked
                                in green on the diagram (Appendix “A.”)

                            
	 	 

                    

                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	
                              “The
                                Premises” -

                            	
                              Offices
                                with an area of 1,119.00 sq.m. (one thousand one
                                hundred and nineteen
                                sq.m.) situated on the third floor of the Building,
                                defined as unit number
                                C-3, and as part of unit number C-4, at 6-8 Hamasger
                                St. in Raanana
                                (including a proportional part of the public areas
                                and as stated in
                                Section 2.2 below), the net area of which is marked
                                in red on the diagram
                                (Appendix “A.”)

                            
	 	 
	
                              “The
                                Rental Period” -

                            	
                              The
                                rental period as stipulated in Section 4 of this
                                agreement.

                            
	 	 
	
                              “The
                                Index”
                                -

                            	
                              The
                                Consumer Price Index as published by the Central
                                Bureau of Statistics, and
                                any index as stated that shall be published by any
                                body or official
                                institution coming in place of this index, whether
                                this shall be based on
                                the same components and/or data or not, all provided
                                that if another index
                                shall replace the Consumer Price Index, and the Central
                                Bureau of
                                Statistics, or any other body or official institution
                                that shall publish
                                this index shall not determine the relationship between
                                it and the
                                Consumer Prices Index, this relationship shall be
                                determined by the
                                Lessor’s accountant.

                            
	 	 
	
                              “The
                                Base Index” -

                            	
                              The
                                Index published on April 15, 2001 (for March 2001)
                                - 99.7
                                points.

                            
	 	 

                    

                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	
                              “Dollar”
                                -

                            	
                              The
                                representative exchange rate of the US dollar as
                                published on May 9, 2001
                                - NIS 4.145 to the dollar.

                            
	 	 
	
                              “Month”
                                -

                            	
                              A
                                period beginning on the 1st
                                day of a month in the Gregorian calendar and ending
                                on the last day of
                                that same month in the Gregorian calendar.

                            
	 	 
	
                              “Quarter”
                                -

                            	
                              Three
                                consecutive months.

                            
	 	 
	
                              “Rate
                                of Change in the Index” -

                            	
                              The
                                relationship between the last known Index at the
                                time of any payment in
                                accordance with this agreement and the Base Index.

                            
	 	 
	
                              “The
                                Implementation Plans” -

                            	
                              Plans
                                for the planning and implementation of the works
                                to adapt the Premises to
                                meet the Lessee’s requirements, in accordance with the specifications
                                of
                                requirements for infrastructure as forwarded by the
                                Lessee to the Lessor,
                                including plans for the installation of an airconditioning
                                system,
                                electric plans, plumbing plans, and plans for the
                                internal division of the
                                Premises, to be prepared by the Lessee’s consultants and/or by consultants
                                made available to the Lessee by the Lessor at the
                                Lessee’s responsibility.
                                It is clarified that all the plans prepared by the
                                Lessee are subject to
                                the authorization of the representative of the Lessor
                                - the architect of
                                the Industrial Compound, the electric and communications
                                consultants, the
                                airconditioning consultants, and the project manager
                                on behalf of the
                                Lessor. After authorization of the Implementation
                                Plans by the project
                                manager, who shall be appointed by the Lessor (as
                                described below), and in
                                coordination with the Lessee, these shall be referred
                                to as “the
                                Authorized Implementation Plans.”

                            

                    

                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      	 	
                              It
                                is clarified that the fees of all the consultants
                                to be appointed by the
                                Lessor for the Lessee, including the fee of the project
                                manager, shall be
                                included in the price of the cost of the works that
                                are the subject of the
                                Authorized Implementation Plans, and as stated in
                                Section 2 of Appendix
                                B-2 below.

                            

                    

                    

                    Part
                      One: Preamble

                    
                      	
                              Whereas

                            	
                              the
                                Lessor is the owner and/or the long-term lessee of
                                the rights to the real
                                estate situated in the Industrial Compound, and is
                                the sole lawful
                                possessor of the Premises, and is eligible and entitled
                                to let these in
                                accordance with this agreement, without any impediment
                                or restriction, and
                                after the Lessor has declared to the Lessee that
                                the Premises are
                                permitted for use within the framework of the Urban
                                Building Plan
                                pertaining thereto, for the purpose of the rental
                                in accordance with this
                                agreement;

                            
	 	 
	
                              And
                                whereas 

                            	
                              the
                                Lessee wishes to rent the Premises for such period,
                                purpose, and
                                remuneration, and on such conditions, as detailed
                                below in this agreement,
                                and the Lessor agrees to let the Premises in accordance
                                with the
                                above;

                            
	 	 
	
                              And
                                whereas

                            	
                              the
                                Parties wish to associate in this unprotected rental
                                agreement, and to
                                determine therein the purpose of the rental, the
                                period thereof, the
                                remuneration to be paid on account thereof, the conditions
                                thereof, and
                                all their remaining mutual rights and obligations,
                                all as detailed in this
                                agreement above and below;

                            

                    

                  

                   

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                    

                      The
                        Parties have therefore declared, conditioned, and agreed
                        as
                        follows:

                      

                      
                        
                          	1.     	
                                   

                                

                        

                         

                        
                          	
                                	1.1	
                                  The
                                    Preamble to this agreement - including the definitions
                                    contained therein -
                                    as well as the appendices attached thereto constitute
                                    an integral part
                                    thereof.

                                

                        

                      

                      

                      
                        	
                              	1.2	
                                The
                                  names of the parts and the titles of the sections
                                  were included in this
                                  agreement solely by way of guidelines, and these
                                  are not to be used in
                                  interpreting this agreement or any of its
                                  provisions.

                              

                      

                      

                      
                        	
                              	1.3	
                                Each
                                  of the Parties hereby declares that no consent
                                  or authorization is
                                  required for its association in this agreement,
                                  and for the execution of
                                  its duties accordingly, and that the signatories
                                  on behalf of each side
                                  are empowered to bind it, as the case may be and
                                  respectively, in
                                  accordance with the provisions of any
                                  law.

                              

                      

                      

                      Part
                        Two: Purpose of Rental; Period of Rental and Delivery of
                        Possession

                      

                      
                        	2.     	
                                The
                                  Purpose of Rental and the Areas of the
                                  Premises

                              

                      

                      
                        	
                              	2.1	
                                The
                                  purpose of the rental, subject to all the remaining
                                  provisions relating to
                                  this matter in this agreement, is the use and management
                                  in the Premises,
                                  by the Lessee alone, of the operation of the offices
                                  of Wintegra
                                  Ltd.
                                  and its commercial operations, which relate to
                                  the field of high-tech -
                                  and for this purpose alone.

                                To prevent
                                  doubt, the Parties hereby
                                  expressly agree that all the Lessee’s operations, in accordance with the
                                  purposes of the rental as stated above, shall be
                                  effected solely in the
                                  area of the Premises; that the Lessee shall at
                                  all times maintain the
                                  cleanliness of the yard and shall not remove any
                                  merchandise and/or
                                  objects from inside the Premises for the purpose
                                  of sale and/or display
                                  and/or for any other purpose not expressly permitted
                                  in accordance with
                                  this agreement.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        	
                              	2.2	
                                The
                                  Parties hereby declare and agree that the area
                                  of the Premises as stated
                                  in the Definitions in Part One of this agreement
                                  is calculated in
                                  accordance with the total (gross) area thereof,
                                  i.e. including the area of
                                  the external walls, with the addition of 15% of
                                  the public areas in the
                                  building of which the Building forms an integral
                                  part, and that the
                                  measurement of the said area shall be made together
                                  with the authorized
                                  representatives of the Lessee and shall be with
                                  its
                                  accord.

                              

                      

                      

                      
                        	3.     	
                                Delivery
                                  of Possession: Adaptations to the Premises
                                  -

                              

                      

                      
                        	
                              	3.1	
                                The
                                  Lessor declares that the Premises were constructed
                                  in accordance with all
                                  laws, and have received all the authorizations
                                  and permits from the
                                  authorities for the purpose of the rental as defined
                                  in this agreement;
                                  that no demolition order has been issued pertaining
                                  to or in connection
                                  with the Building, and that the Lessor is not aware
                                  of any grounds
                                  therefore; that a proper certificate of completion
                                  has been received
                                  pertaining to the Building, and that there is no
                                  contractual or other
                                  impediment to the association in this
                                  agreement.

                              

                      

                      

                      
                        	
                              	3.2	
                                The
                                  Lessee hereby declares that it is thoroughly familiar
                                  with the Industrial
                                  Compound and its environs; the Building and the
                                  Premises; and all the
                                  rights connected and/or relating to the rental
                                  in accordance with this
                                  agreement, and having examined all these as stated,
                                  the Lessee declares
                                  that it has found the Premises to be to its satisfaction,
                                  in a fit state,
                                  good and proper for its needs in all details. The
                                  Lessee hereby further
                                  declares that the Lessor has not furnished it with
                                  any description of the
                                  Industrial Compound and/or the Building and/or
                                  the Premises, and that it
                                  is associating in this rental agreement on the
                                  basis of its own
                                  inspections and impressions, and hereby waives,
                                  expressly and in advance,
                                  any claim regarding unsuitability, and, subject
                                  to the content of this
                                  agreement, any other claim of any type and kind
                                  relating to the Industrial
                                  Compound and/or the Building and/or the Premises,
                                  the possible uses
                                  thereof, and its association in this agreement,
                                  excepting a concealed
                                  defect that cannot be discovered in a reasonable
                                  and usual
                                  examination.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      
                        	
                              	3.3	
                                The
                                  Premises shall be available for the Lessee’s possession “as is,” and in
                                  proper condition in accordance with the procedure
                                  for the delivery as
                                  agreed by the Parties and as attached thereby as
Appendix
                                  B-1,
                                  dated September 1, 2001, as stated in Section 4.1
                                  below.

                                
                                  The
                                    Lessee declares that it is aware and expressly
                                    agrees that, in any case,
                                    the Lessor is not liable for the quality of any
                                    of the items and
                                    adaptations to the Premises, including the quality
                                    of carpets, the quality
                                    of the acoustic ceilings, the quality of the
                                    lighting or the lack of
                                    lights, electricity infrastructure, telephones,
                                    communication
                                    etc.

                                  The
                                    Lessor must ensure the proper operation of the
                                    airconditioning systems as
                                    of the delivery of possession in the Premises
                                    - September 1, 2001, as
                                    stated in Section 3.3 above (however, the responsibility
                                    for the
                                    maintenance of the airconditioning systems, the
                                    insurance thereof, and the
                                    return thereof on completion of the Rental Period
                                    in proper condition is
                                    borne by the Lessee and at its expense), as well
                                    as the maintenance of the
                                    firefighting system as detailed in Section 14.6
                                    below. The Lessee shall
                                    ensure association (at its expense) with a qualified
                                    body for the purpose
                                    of obtaining maintenance and repair services
                                    for the airconditioning
                                    system and the firefighting system as
                                    stated.

                                

                              

                      

                      

                      
                        	
                              	3.4	
                                The
                                  Premises shall be delivered to the Lessee in proper
                                  condition for the
                                  Lessee’s purposes, in accordance with the procedure for
                                  delivery agreed by
                                  the Parties and attached thereby as Appendix B-2
                                  below.

                              

                      

                      

                      
                        	
                              	3.5	
                                Implementation
                                  of the works for the adaptation of the Premises
                                  to the Lessee’s needs, and
                                  the attention to the Implementation Plans, shall
                                  be as
                                  follows:

                              

                      

                      
                        	
                              	3.5.1	
                                On
                                  July 1, 2001 (“the
                                  Date of Delivery of the Plans”),
                                  the Lessee forwarded that part of the Implementation
                                  Plans for which it is
                                  responsible, in writing, for the authorization
                                  of the Lessor and/or the
                                  project manager, including specifications and statements
                                  of quantities.
                                  Upon receipt of these plans by the Lessor, the
                                  latter forwarded these to
                                  the various consultants appointed thereby for the
                                  Lessee (airconditioning
                                  consultant, electric consultant, safety consultant,
                                  and plumbing
                                  consultant), and ensured that these written plans
                                  for the implementation
                                  of the works would be forwarded for the authorization
                                  of the Lessee, the
                                  Lessor, and the project manager by July 10, 2001,
                                  and that these would
                                  discuss and (insofar as required) amend the plans.
                                  On the authorization of
                                  the plans by the Lessee, the Lessor, and the project
                                  manager, authorized
                                  Implementation Plans, including specifications
                                  and statements of
                                  quantities for each work, shall be presented by
                                  the various consultants to
                                  the project manager and/or the Lessor, by July
                                  19,
                                  2001.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      
                        	
                              	3.5.2	
                                Within
                                  ten (10) days from the authorization of the Implementation
                                  Plans (but not
                                  later than July 29, 2001), tenders shall be issued
                                  for the execution of
                                  the necessary works. Estimates on behalf of various
                                  executors and/or
                                  contractors that shall be submitted relating to
                                  the execution of the works
                                  that are the subject of the Authorized Implementation
                                  Plans shall be
                                  forwarded to the Lessee in advance (by Tuesday,
                                  August 7, 2001), and
                                  shall, in any case, be authorized not later than
                                  seven (7) business days
                                  after their receipt (August 14, 2001). Without
                                  derogating from the above,
                                  it is agreed that, insofar as no comments are received
                                  on behalf of the
                                  Lessee regarding the estimates that shall be forwarded
                                  to its
                                  notification, within three (3) days from the date
                                  of transfer thereto,
                                  this shall be considered tantamount to the Lessee’s agreement to the
                                  execution of the specific work at the price stated
                                  in the estimate
                                  forwarded for its review, and the Lessee shall
                                  be prevented from making
                                  any claim regarding the price of execution and
                                  the identity of the
                                  executor.

                              

                      

                      

                      
                        	
                              	3.5.3	
                                The
                                  Lessor undertakes that the Lessee shall receive
                                  the Premises when these
                                  are ready for the Lessee’s activities in the Premises, according to the
                                  Authorized Implementation Plans, and in accordance
                                  with the purpose of the
                                  rental, not later than October 16, 2001. The actual
                                  date of receipt of the
                                  Premises shall be referred to above and below as
“the
                                  Actual Date of Delivery of Possession.”
                                  It is hereby agreed by the Parties that a delay
                                  of one week in the Actual
                                  Date of Delivery of Possession, viz. through October
                                  23, 2001, shall not
                                  constitute a breach of this agreement by the Lessor.

                                As of September
                                  1, 2001, the Lessee shall
                                  be enabled to enter the Premises for the purpose
                                  of preparing these for
                                  its needs, all at the Lessee’s expense and liability, provided that this
                                  is possible, in the Lessor’s opinion, and in coordination with the
                                  Lessor’s project manager.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      
                        	
                              	3.5.4	
                                Notwithstanding
                                  the above, it is emphasized that any changes required
                                  to the Authorized
                                  Implementation Plans (as defined in the Preamble
                                  to this agreement) are
                                  liable to cause a delay (relatively) in the Date
                                  of Delivery of
                                  Possession. The Lessee shall be required, in the
                                  said case, to pay rental
                                  fee even for the period of the delay caused due
                                  to changes requested by
                                  the Lessee after the authorization of the Implementation
                                  Plans, provided
                                  that the delay was not caused by the Lessor, or
                                  due to delays in the
                                  renovation works themselves not under the Lessee’s control.

                                It is clarified
                                  and emphasized that the
                                  entire content of the sub-sections of Section 3.5
                                  above is conditioned and
                                  subject to full, precise, and prompt compliance
                                  with the Lessee’s
                                  obligations relating to the specifications, the
                                  authorization of the
                                  Implementation Plans, and other assistance as shall
                                  be required thereof in
                                  connection with the execution of the works that
                                  are the subject of the
                                  Authorized Implementation Plans.

                              

                      

                      

                      
                        	
                              	3.5.5	
                                To
                                  prevent doubt, it is hereby clarified that the
                                  Lessee shall not be liable
                                  for any damage caused to the Premises during the
                                  period of adaptation of
                                  the Premises to its needs, insofar as these works
                                  were not executed by it,
                                  as stated at the end of Section 3.5.3, and, in
                                  any case, it does not have
                                  any employer-employee relations with those engaged
                                  in the work of adapting
                                  the Premises to its needs.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                3.5.6

                              	
                                The
                                  Parties agree that, on delivery of possession of
                                  the Premises to the
                                  Lessee, responsibility for all the systems installed
                                  in the Premises shall
                                  be transferred to the Lessee, after completion
                                  of the customary period of
                                  warranty, regarding each specific issue, all according
                                  to the inspection
                                  periods as detailed in the Addendum to the Sales
                                  Law (Apartments), and in
                                  accordance with the content of Section 3.3
                                  above.

                              

                      

                      

                      
                        	
                              	3.6	
                                The
                                  Lessee confirms that it is aware that the western
                                  passage of the Building
                                  and of the Premises (Core 1) shall also serve as
                                  an escape corridor for
                                  the adjacent premises, subject to the requirements
                                  of the various
                                  authorities, the Municipality of Raanana, the fire
                                  department, police,
                                  etc.

                              

                      

                      

                      
                        	4.     	
                                Rental
                                  Period

                              

                      

                      
                        	
                              	4.1	
                                The
                                  Lessor hereby lets the Premises to the Lessee,
                                  and the Lessee hereby rents
                                  the Premises from the Lessor, for a rental period
                                  of five (5) years
                                  commencing on September 1, 2001, and ending on
                                  August 31, 2006
                                  (hereinafter - “the
                                  Rental Period.”)

                              

                      

                      

                      
                        	
                              	4.2	
                                Upon
                                  completion of the Rental Period, the Lessee shall
                                  have the option of
                                  extending the rental of the Premises in accordance
                                  with this agreement for
                                  an additional rental period of 36 months, commencing
                                  on September 1, 2006,
                                  and ending on August 31, 2009 (hereinafter - “the
                                  Additional Period,”)
                                  subject to the following:

                              

                      

                      
                        	
                              	(A)	
                                That,
                                  through the said date, the Lessee has complied
                                  fully and completely with
                                  all its obligations in accordance with the rental
                                  agreement, and
                                  -

                              

                      

                      
                        	
                              	(B)	
                                That
                                  the Lessee has not informed the Lessor in writing
                                  of its desire not to
                                  renew and extend this rental agreement for the
                                  Additional Period, not
                                  later than nine (9) months prior to the end of
                                  the preceding Rental
                                  Period.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                4.3

                              	
                                If
                                  the validity of this rental agreement is extended
                                  on the basis of the
                                  content of Section 4.2 above, the term “Rental Period,” wherever this
                                  appears in this agreement, shall include both the
                                  Rental Period and the
                                  Additional Period (if the option on account thereof),
                                  with those changes
                                  expressly stated in this agreement (for example,
                                  regarding the
                                  determination of the Updated Rental Fee as stated
                                  in Section 7 below), and
                                  with those changes as required in accordance with
                                  the matter, and all the
                                  provisions of this agreement (with the exception
                                  of the granting of the
                                  option - in accordance with Section 4.2 above)
                                  shall also apply to the
                                  Additional Period as stated, with those changes
                                  as required in accordance
                                  with the matter.

                              

                      

                      

                      
                        	5.     	
                                If
                                  the Lessee ceases to use and/or vacates the Premises
                                  prior to the end of
                                  the Rental Period and for any reason, this shall
                                  not release the Lessee
                                  from all its obligations in accordance with this
                                  agreement and, in
                                  particular - but without derogating from the generality
                                  of the above - its
                                  obligations to pay the Lessor the full Rental Fee
                                  and the remaining
                                  payments pertaining to this agreement through the
                                  end of the Rental
                                  Period.

                              

                      

                      

                      Part
                        Three: Rental Fee and Manner of Payment Thereof

                      
                        	6.     	
                                 

                              

                      

                      
                        	
                              	6.1	
                                The
                                  Parties hereby establish that the Rental Fee that
                                  shall be paid by the
                                  Lessee to the Lessor pertaining to the rental of
                                  the Premises in
                                  accordance with this agreement shall
                                  be:

                              

                      

                      
                        	
                              	6.1.1	
                                During
                                  the period between September 1, 2001 and August
                                  31, 2004, the Rental Fee
                                  shall be in the sum of USD 17.16 (seventeen US
                                  dollars and an additional
                                  16 cents) per month, in new shekels, for each square
                                  meter of the Premises
                                  (hereinafter - “the
                                  Basic Rental Fee.”)

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                6.1.2

                              	
                                In
                                  the period between September 1, 2004 and August
                                  21, 2006, the Rental Fee
                                  shall be at the level of the Rental Fee actually
                                  current as of August 31,
                                  2004, with the real addition of three percent (3%)
                                  (hereinafter -
                                  “the
                                  Updated Rental Fee.”)

                              

                      

                      

                      
                        	
                              	6.1.3	
                                During
                                  the Additional Rental Period, if and insofar as
                                  this is realized, the
                                  Lessee shall pay the Lessor a Rental Fee in accordance
                                  with the evaluation
                                  of a assessor as detailed in Section 7
                                  below.

                              

                      

                      

                      
                        	
                              	6.2	
                                Upon
                                  the signing of this agreement, the Lessee paid
                                  the Lessor Rental Fees
                                  quarterly in advance. All remaining payments shall
                                  be effected once
                                  quarterly, in advance, at the beginning of each
                                  calendar quarter, during
                                  the course of the Rental Period. At the beginning
                                  of each quarter, a tax
                                  invoice shall be issued to the Lessee including
                                  Index and/or Updating
                                  increments in accordance with this agreement, and
                                  payment shall be subject
                                  to receipt of the invoice as stated by the 5th
                                  day of the month of the beginning of each
                                  quarter.

                              

                      

                      

                      
                        	
                              	6.3	
                                Notwithstanding
                                  the content of Section 6.2 above, the Lessee shall
                                  be exempt from payment
                                  of Rental Fee for the period between December 1,
                                  2001 and March 31,
                                  2002.

                              

                      

                      

                      
                        	
                              	6.4	
                                The
                                  sums detailed in Sections 6.1.1 through 6.1.3 shall
                                  be converted in
                                  accordance with the representative exchange rate
                                  of the Dollar as of May
                                  9, 2001 (NIS 4.145 to one dollar), and shall be
                                  linked to changes in the
                                  Index, so that in each payment occurring in accordance
                                  with this
                                  agreement, the due Rental Fee shall be readjusted
                                  in accordance with the
                                  rate of change in the Index, and the adjusted Rental
                                  Fee shall, at that
                                  time, and for every matter and purpose, be considered
                                  the Basic Rental Fee
                                  in the framework of this agreement.

                              

                      

                      

                      
                        	
                              	6.5	
                                With
                                  the goal of facilitating the collection of the
                                  Rental Fee and the payments
                                  pertaining to maintenance, parking, and charges
                                  for electricity, the
                                  Lessee shall, on the signing of this agreement,
                                  sign a “standing order”
                                  for the charging of the Lessee’s bank account, this once a Quarter (in
                                  advance) as stated. The Lessee undertakes to sign
                                  any additional
                                  documents, if required, relating to the regulation
                                  of the payment by
                                  standing order as stated above, at the first request
                                  of the
                                  Lessor.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                6.6

                              	
                                Value
                                  Added Tax paid by the Lessee to the Lessor shall
                                  be added to the Rental
                                  Fee and the other payments, together with the Rental
                                  Fee and the other
                                  payments, in a standing order as detailed in Section
                                  6.5 above, and in
                                  such amount as shall be required by law, and against
                                  a lawful tax
                                  invoice.

                              

                      

                      

                      
                        	7.     	
                                Rental
                                  Fees during the Additional
                                  Period

                              

                      

                      
                        	
                              	7.1	
                                120
                                  days prior to the end of the Rental Period, and
                                  subject to the content of
                                  Section 4 above, the Parties shall appoint a qualified
                                  assessor to
                                  determine the Rental Fee from September 1, 2006
                                  through August 31, 2009
                                  (in this section - “the Rental Fee in the Additional Period.”) In the
                                  event of disagreements regarding the identity of
                                  the assessor that shall
                                  not be resolved within 15 days from May 1, 2006
                                  (“the Appointment Date,”)
                                  each Party shall appoint a assessor on its behalf
                                  who shall act in
                                  accordance with the content below.

                              

                      

                      

                      
                        	
                              	7.2	
                                The
                                  Parties (jointly or severally, as the case may
                                  be) shall instruct the
                                  assessor to offer an opinion on the determining
                                  of the Updated Rental Fee,
                                  and shall cause the said opinion to be presented
                                  not later than 30 days
                                  after the Appointment Date.

                              

                      

                      

                      
                        	
                              	7.3	
                                The
                                  Parties (jointly or severally, as the case may
                                  be) shall instruct the
                                  assessor to base his opinion on the rental fees
                                  current at that time in
                                  similar premises (in area, location, environmental
                                  conditions, and the
                                  internal and external quality of the building,
                                  including any improvements
                                  made by the Lessee, but excluding improvements
                                  that are tantamount to
                                  chattel and which the Lessee is entitled to take
                                  at the end of the Rental
                                  Period in accordance with the provisions of this
                                  agreement) situated in
                                  the same area and serving similar purposes as those
                                  served by the
                                  Building, subject to all adjustments as shall be
                                  required, in accordance
                                  with the content of Section 7.5
                                  below.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                7.4

                              	
                                If
                                  the Rental Fee determined in the opinion of the
                                  assessor appointed by the
                                  Lessor shall be higher than the Rental Fee determined
                                  in the opinion of
                                  the assessor appointed by the Lessee in a rate
                                  of up to 10%, then the
                                  Updated Rental Fee shall be set to the amount determined
                                  by the assessor
                                  appointed by the Lessor, less half the difference
                                  between this amount and
                                  the amount of Rental Fee determined by the assessor
                                  appointed by the
                                  Lessee (for example, if the Lessor’s assessor determined USD 30 and the
                                  Lessee’s assessor determined USD 27, the Updated Rental
                                  Fee shall be USD
                                  28.50). If the said difference is greater than
                                  the proportion of ten
                                  percent (10%) as stated, the two assessors shall
                                  then be required, not
                                  later than 15 days from the date on which the latter
                                  of the two furnished
                                  its opinion as stated above, to decide on a third
                                  assessor who shall
                                  determine the Updated Rental Fee, subject to all
                                  the provisions relating
                                  to this matter in this agreement, and the opinion
                                  of this assessor, which
                                  shall be delivered not later than 30 days after
                                  the two said assessors
                                  have contacted him as stated above, shall be final
                                  and binding for this
                                  matter.

                                If either Party
                                  shall refrain from
                                  performing its obligations in accordance with this
                                  Section 7 (including
                                  its sub-sections), then, in addition to the provisions
                                  of any law, this
                                  action or fault shall be considered as consent
                                  to the charging and
                                  determination of the Updated Rental Fee in accordance
                                  with the
                                  determination of the Party observing this
                                  agreement.

                              

                      

                      

                      
                        	
                              	7.5	
                                The
                                  Parties agree that, in any case, the Rental Fee
                                  in the Additional Period
                                  shall not be lower than the Updated Rental Fee
                                  as current at the time of
                                  granting of the opinion of the assessor/s as relevant
                                  to this
                                  matter.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	7.6	
                                The
                                  Rental Fee in the Additional Period as determined
                                  in accordance with the
                                  content above and as introduced and applied as
                                  of September 1, 2006, shall
                                  be linked to the Index, provided that the Base
                                  Index constituting the
                                  Index for the determining of the Updated Rental
                                  Fee shall be that Base
                                  Index known at the time of the granting of the
                                  opinion in accordance with
                                  which the Rental Fee shall be determined for the
                                  Additional Period, in
                                  accordance with the content above.

                              

                      

                      

                      
                        	
                              	7.7	
                                Expenses
                                  for an agreed assessor appointed by both Parties
                                  shall be borne by the
                                  Parties, in equal parts. Each Party shall bear
                                  the expenses of the
                                  assessor appointed by it alone (if any). Expenses
                                  of the assessor
                                  appointed by the Parties, in accordance with the
                                  content of Section 7.4
                                  above, shall be borne by the Parties in equal
                                  parts.

                              

                      

                      

                      Part
                        Four: Additional Payments Incumbent on the Lessee

                      
                        	8.     	
                                In
                                  addition to the Rental Fee to be paid by the Lessee
                                  to the Lessor, as
                                  stated in Part Three of this agreement, the Lessee
                                  hereby undertakes to
                                  pay all the following payments to the relevant
                                  authorities and/or to the
                                  Lessor:

                              

                      

                      
                        	
                              	8.1	
                                All
                                  taxes, levies, municipal taxes, licenses, compulsory
                                  loans, and other
                                  obligatory payments, government and municipal,
                                  which are and/or which
                                  shall be imposed - on the lessee or the possessor
                                  of premises - for the
                                  current maintenance of the Premises themselves
                                  and/or for the use thereof
                                  and/or for the business that shall be pursued therein
                                  (all the above shall
                                  henceforth, for the sake of abbreviation, be referred
                                  to as “the
                                  Taxes”),
                                  as these shall be determined by the above authorities
                                  pertaining to the
                                  area of these Premises.

                                The Lessor
                                  shall bear all taxes, levies
                                  (including betterment levy for exceptional use),
                                  municipal taxes,
                                  licenses, compulsory loans, and other obligatory
                                  payments, government and
                                  municipal, which are and/or which shall be imposed
                                  on the owner of the
                                  Premises.

                              

                      

                       

                      
                        	
                              	8.2	
                                All
                                  licenses and payments relating to current consumption
                                  uses, including
                                  consumption of water, electricity, and telephones
                                  in the Premises,
                                  provided that - 

                              

                      

                      
                         

                        
                          
                            
                            

                          

                          
                            
                            

                            
                              

                            

                          

                          
                            
                            

                          

                           

                        

                        
                          	
                                	 	
                                  The
                                    Lessor shall ensure the installation of sub-meters
                                    for the Premises, at
                                    the Lessor’s expense. 

                                  
                                    The
                                      Lessor shall pay, directly to the Electric
                                      Company, the charges received
                                      for the use made by the Lessee of the electric
                                      grid. Without derogating
                                      from the above, insofar as the electric meters
                                      shall not be in the
                                      Lessee’s name or shall not reflect the use made of
                                      the electric grid, the
                                      Lessor shall pay the said charges for the Lessee
                                      and shall charge the
                                      Lessee for their said use (in accordance with
                                      the display on the said
                                      meters), once a Quarter, in accordance with
                                      the current tariff of the
                                      Electric Company, and the collection shall
                                      be effected by means of the
                                      “standing order” (subject to the content of Section 6.5
                                      above).

                                    If,
                                      at any time, the Electric Company shall decide
                                      to connect the Lessee
                                      directly to the electric grid, and shall request
                                      this of the Lessor or of
                                      the Lessee, as the case may be, then the Lessee
                                      undertakes to take all
                                      actions as shall be required thereof in this
                                      context; to make all the
                                      payments required in this matter to the Electric
                                      Company, and to release
                                      the Lessor from any liability in connection
                                      with the charges for the
                                      consumption of electricity and/or the connection
                                      to the electric grid,
                                      which shall be borne by it as stated. The Lessee
                                      undertakes not to contact
                                      the Electric Company and request the connection
                                      of the Premises directly
                                      to the electric grid.

                                    Notwithstanding
                                      the above, the Parties hereby agree that the
                                      direct expenses for the
                                      direct connection of the Premises to the Electric
                                      Company, if any, shall
                                      be divided between the Parties in equal
                                      parts.

                                  

                                

                        

                      

                       

                      
                        	
                              	
                                8.3

                              	
                                An
                                  appropriate proportionate part of the insurance
                                  expenses and fees as these
                                  shall be calculated by the Lessor, and as paid
                                  thereby, for the insurance
                                  of the Building of which the Premises form an integral
                                  part, and of the
                                  systems thereof (when the insurance does not include
                                  the contents of the
                                  Premises and the repair thereof, changes and additions
                                  to the Premises
                                  made by and/or for the Lessee), against loss or
                                  damage due to fire risks,
                                  explosion, earthquake, storm and hurricane, flood
                                  and water damage,
                                  strikes and malicious damage, and against any additional
                                  risk required in
                                  the Lessor’s opinion.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	8.4	
                                It
                                  is expressly agreed that the preparation of insurance
                                  as stated above
                                  shall not derogate from the Lessee’s liability, whether in accordance with
                                  this agreement or in accordance with law, and shall
                                  not impose any
                                  liability on the Lessor regarding loss or damage,
                                  or other damage caused
                                  to a third party in the Industrial Compound and/or
                                  in any other
                                  place.

                              

                      

                      

                      
                        	
                              	8.5	
                                Subject
                                  to the Lessor’s right not to rebuild a building or a part of
                                  a building
                                  damaged beyond repair, it is hereby agreed that
                                  if damage covered by the
                                  insurance as stated in this section above is caused,
                                  the insurance
                                  payments received from the insurer shall be used
                                  to repair the damages on
                                  account of which the insurance payments as stated
                                  shall be
                                  made.

                              

                      

                      

                      
                        	
                              	8.6	
                                Payments
                                  for maintenance services as detailed in Section
                                  16
                                  below.

                              

                      

                      

                      
                        	
                              	8.7	
                                Insofar
                                  as any of the amounts the Lessee shall be liable
                                  to pay to the Lessor in
                                  accordance with Section 8 above shall be based
                                  on an account relating to
                                  the Industrial Compound and/or the Building of
                                  which the Premises form an
                                  integral part, the Lessee shall pay the Lessor
                                  an appropriate relative
                                  part of the total amount of the account, provided
                                  that, for the purpose of
                                  calculating the Lessee’s proportional part in the said payments, the
                                  relationship between the area of the Premises and
                                  the total area of the
                                  Industrial Compound, and/or of the Building of
                                  which the Premises for an
                                  integral part, as the case may be, shall be taken
                                  into account, without
                                  reference to the extent to which these are occupied
                                  by other
                                  tenants.

                              

                      

                       

                      

                      Part
                        Five: Lessee’s Obligations

                      
                        	9.     	
                                 

                              

                      

                      
                        	
                              	9.1	
                                The
                                  Lessee hereby undertakes to comply with all laws,
                                  regulations, and by-laws
                                  applying and/or which shall apply to the Premises,
                                  to the use thereof, and
                                  to the Lessee’s business in accordance with the purpose of the
                                  rental
                                  (Section 2 above) during the Rental Period, regarding
                                  all works and
                                  actions that shall be undertaken by the Lessee
                                  in the
                                  Premises.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                        
                          	
                                	 	
                                  The
                                    Lessee hereby undertakes to receive a business
                                    license from the local
                                    authority for the management of its business
                                    and operations in the
                                    Premises, and to comply with all the conditions
                                    of the said license for
                                    the entire duration of the Rental Period. The
                                    Lessee expressly declares
                                    that the relevant authorities have informed it
                                    that it is eligible to
                                    receive a business license as stated in accordance
                                    with the purpose of the
                                    rental, and that it undertakes to present the
                                    business license to the
                                    Lessor as stated at any time as it is requested
                                    by the
                                    Lessor.

                                  
                                    In
                                      addition, the Lessee releases the Lessor with
                                      regard to any liability
                                      accruing from obtaining of the business license
                                      as stated, and undertakes
                                      to indemnify the Lessor for any damage caused
                                      to the Premises due to the
                                      breach of the Lessee’s obligations as mentioned in this Section
                                      9.1

                                  

                                

                        

                         

                      

                      
                        	
                              	9.2	
                                The
                                  Lessee hereby undertakes not to use the Premises,
                                  or any part thereof, in
                                  a manner that will cause noise, odors, vibrations,
                                  and/or smoke that are
                                  greater than is reasonable, with attention to the
                                  character of the area as
                                  a whole, and the character of the immediate vicinity
                                  in particular, as
                                  well as the purpose of the rental in accordance
                                  with this agreement, and
                                  shall ensure that its use of the Premises - in
                                  accordance with the purpose
                                  of the rental as stated - shall not disturb and/or
                                  harm the use and
                                  activities of the remaining holders in the Industrial
                                  Compound, and/or
                                  that it shall not violate the provisions of any
                                  law. The Lessee hereby
                                  further undertakes not to place equipment of any
                                  type outside the internal
                                  area of the Premises, including the removal of
                                  merchandise and such like,
                                  and to pay strict attention to the collection of
                                  waste and
                                  boxes.

                              

                      

                      

                      
                        	
                              	9.3	
                                The
                                  Lessee hereby undertakes not to discharge into
                                  the sewage system, and not
                                  to cause to be discharged therein, waste that is
                                  not suitable in its
                                  profile to the instructions of the Ministry of
                                  Health and the local
                                  authority and to the provisions of any
                                  law.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	9.4	
                                If,
                                  for any reason relating to the Lessee, a prohibition
                                  or an impediment in
                                  accordance with any law is imposed on the Lessee
                                  to use the Premises for
                                  any of the purposes of rental as established in
                                  this agreement, including
                                  as the result of the non-receipt or the nullification
                                  or the failure to
                                  display a permit or license the Lessee is required
                                  to hold in accordance
                                  with this agreement and in accordance with any
                                  law, or for the issuing by
                                  a judicial authority or by any other empowered
                                  authority (hereinafter -
                                  “the
                                  Impediment,”)
                                  the Lessee shall immediately cease to make any
                                  use of the Premises for the
                                  entire duration of the period in which the Impediment
                                  shall be extant. The
                                  Parties expressly agree that the creation of the
                                  Impediment as stated
                                  shall not grant the Lessee the right to nullify
                                  this agreement and shall
                                  not release it from its obligation to observe,
                                  fully and promptly, all its
                                  obligations (including, without derogating from
                                  the generality of the
                                  above, the execution of all payments due in accordance
                                  with this
                                  agreement) for the entire duration of the period
                                  of the
                                  Impediment.

                                The Lessor
                                  declares that it is aware that,
                                  as of the date of signing this agreement, the procedures
                                  by which the
                                  Lessee is required to secure a permit or a license
                                  as stated in this
                                  section have not yet been
                                  completed.

                              

                      

                      

                      
                        
                          	10.   	
                                  In
                                    coordination with the signs consultant on behalf
                                    of the Lessor, the Lessee
                                    is entitled to erect signs (bearing its name)
                                    at the entrance to the
                                    Premises, and by way of orientation to the Premises,
                                    all at its liability
                                    and expense, and in addition to the signs to
                                    be erected by the Lessor for
                                    all the tenants in the
                                    Compound.

                                

                        

                      

                      

                      
                        	11.    	
                                Without
                                  derogating from the content of Section 14 below,
                                  the Lessee shall be
                                    entitled, at its liability and expense, to furnish
                                  the Premises and to
                                  install equipment therein, provided that the furnishing
                                  of the Premises
                                  and the installation of equipment therein shall
                                  not damage the
                                  Premises.

                                The Lessee
                                  undertakes that, in any case,
                                  at the end of the Rental Period or on the actual
                                  termination of the
                                  rental, it shall leave in the Premises for the
                                  ownership of the Lessor,
                                  without any request for payment or otherwise, all
                                  renovations,
                                  adaptations, and/or changes, and/or additions it
                                  shall undertake as
                                  stated, excluding additional airconditioning systems
                                  it shall install in
                                  the Premises, and removable
                                  furniture.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	12.   	
                                Parking

                              

                      

                      
                        	
                              	12.1	
                                The
                                  Lessor undertakes to make available to the Lessee
                                  50 unmarked
                                  (non-specific) parking places in the parking lot
                                  of the Building, and the
                                  Lessee hereby undertakes to rent from the Lessor
                                  the right of use of 50
                                  parking places as stated, on such levels and in
                                  such parking places as
                                  shall be dedicated for this purpose by the Lessor,
                                  and as shall be
                                  allocated by the Lessor from time to time, in return
                                  for the sum of USD 60
                                  (sixty US Dollars) per parking place (covered or
                                  uncovered) per month, or
                                  at such price as shall be current in the same period
                                  for the remaining
                                  tenants in the Taya Center.

                              

                      

                      

                      
                        	
                              	12.2	
                                Notwithstanding
                                  the above, the Parties agree that, for 40 of the
                                  above-mentioned parking
                                  places, the Lessee shall, through December 31,
                                  2001, be charged by the
                                  Lessor by a total of USD 50 (fifty US Dollars)
                                  only for one parking place
                                  (covered or uncovered).

                              

                      

                      

                      
                        	
                              	12.3	
                                The
                                  Lessee is granted the option to increase the number
                                  of parking places
                                  beyond that stated above, in accordance with the
                                  number of parking places
                                  remaining in the parking lot (if any); on the basis
                                  of actual
                                  availability, and at a monthly cost (for one parking
                                  place) in the sum of
                                  USD 60, or at such price as shall be current in
                                  that period for the
                                  remaining tenants in the Taya Center.

                                After such
                                  increase of the number of
                                  parking places, as aforesaid, a decrease of parking
                                  places down to only 50
                                  places, as set forth in Section 12.1, if the Lessee
                                  wishes to do so, shall
                                  require at least a one-month prior notice to the
                                  Lessor.
                                  

                              

                      

                      

                      
                        	
                              	12.4	
                                The
                                  sums detailed in this Section 12 (including the
                                  sub-sections thereof)
                                  shall be converted in accordance with the representative
                                  exchange rate of
                                  the US dollar as known on May 9, 2001, as stated
                                  with regard to the Rental
                                  Fee, and shall be linked to the Consumer Price
                                  Index as stated above. VAT
                                  by law shall be added to the payments due for the
                                  parking. The payments
                                  shall also be effected on a quarterly basis, in
                                  advance, and in accordance
                                  with the procedures for collection as detailed
                                  in Section 6.5
                                  above.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	12.5	
                                The
                                  Lessee undertakes not to use the parking lots situated
                                  at the front of the
                                  Building on Haharoshet St. and Hataasiya
                                  St.

                              

                      

                      

                      
                        	13.   
	
                                 

                              

                      

                      
                        	
                              	13.1	
                                The
                                  Lessee hereby undertakes to use the Premises in
                                  a cautious and reasonable
                                  manner, to refrain from noises, to maintain the
                                  cleanliness of the
                                  Premises, the Building, and the Industrial Compound,
                                  to refrain from
                                  impairing the cleanliness of the Building and the
                                  Industrial Compound, and
                                  to refrain from causing damage and/or spoilage
                                  to the Premises and to the
                                  Building (with the exception of spoilages caused
                                  as the result of
                                  wear-and-tear accruing from ordinary and reasonable
                                  use).

                              

                      

                      

                      
                        	
                              	13.2	
                                The
                                  Lessee shall be obliged to repair immediately -
                                  and at its expense - any
                                  damage and/or harm that shall be caused to the
                                  Premises and/or the
                                  Building, by itself and/or its employees and/or
                                  those using it and/or
                                  those acting on its behalf, excluding reasonable
                                  and ordinary
                                  wear-and-tear.

                                The Lessor
                                  undertakes that any harm
                                  deriving from its faulty construction or use of
                                  poor materials, or other
                                  damages the Lessor is required to repair, shall
                                  be repaired by it promptly
                                  and at its expense, in such manner that the Lessee
                                  shall be able to use
                                  the Premises in a reasonable and normal
                                  manner.

                              

                      

                      

                      
                        	
                              	13.3	
                                If
                                  either Party is obliged to perform a repair under
                                  this agreement, and
                                  fails to perform the said repair within 14 days
                                  from the date on which it
                                  received written notification from the other Party,
                                  the other Party shall
                                  be entitled - but not obliged - to undertake the
                                  said repair, at the
                                  expense of the Party that failed to do so, and
                                  the latter shall be
                                  required to reimburse the Party undertaking the
                                  repair for any amount it
                                  shall expend for the implementation of the repair,
                                  with the addition of
                                  interest in the amount stated in Section 29.3 below,
                                  which shall be
                                  calculated from the date of the expenditure of
                                  the sum and through to its
                                  actual reimbursement.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	14.   
	
                                The
                                  Lessee hereby undertakes not to effect and not
                                  to execute any changes
                                  and/or addition and/or construction works, of any
                                  type and kind (all of
                                  which shall hereinafter be referred to as “Works”)
                                  in the Premises, without obtaining the Lessor’s prior and written consent
                                  thereto:

                              

                      

                      
                        	
                              	14.1	
                                If
                                  the Lessee executes Works without obtaining the
                                  Lessor’s consent thereto,
                                  then the Lessor shall be entitled - without derogating
                                  from its right to
                                  consider this tantamount to a breach of the agreement
                                  as stated in Part
                                  Eleven below (with all this entails)
                                  -

                              

                      

                      
                        	
                              	14.1.1	
                                To
                                  instruct the Lessee to demolish the Works, and
                                  the Lessee shall be
                                  obliged, at its expense, to demolish and execute
                                  as required in order to
                                  restore the Premises to their condition prior to
                                  the execution of the
                                  Works, within 14 days from the date of the Lessor’s instruction.
                                  

                                Provided that
                                  - 

                                If the Lessee
                                  shall fail to respond to the
                                  Lessor’s instruction as stated in this paragraph, the
                                  Lessor shall be
                                  entitled - but not obliged - to execute the demolition
                                  and the actions
                                  required to restore the Premises to their previous
                                  state, at the Lessee’s
                                  expense, and the Lessee shall be obliged to reimburse
                                  the Lessor for any
                                  amount it shall expend to this end, against presentation
                                  of tax invoices
                                  for the works executed, and with the addition of
                                  interest in the amount as
                                  stipulated in Section 29.3 below, which shall be
                                  calculated from the date
                                  of expenditure of the sum by the Lessor and through
                                  their actual
                                  reimbursement to the Lessor.

                              

                      

                      
                        	
                              	14.1.2	
                                To
                                  retain the Works, as its property, and the Lessee
                                  hereby expressly agrees
                                  that the Works shall constitute the exclusive property
                                  of the Lessor, from
                                  the date of their execution, without the Lessor’s being required to pay
                                  any amounts to the Lessee
                                  therefore.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	14.2	
                                Subject
                                  to the prior written consent of the Lessor, the
                                  Lessee shall be entitled
                                  to execute, at its liability and expense, actions
                                  to adapt the Premises to
                                  the Lessee’s needs, which actions shall be effected subject
                                  to all the
                                  content of this agreement, at the Lessee’s expense and liability. It is
                                  clarified that all adaptations present in the Premises
                                  as of the date of
                                  signing the agreement are not included in the definition
                                  of the additional
                                  adaptations, and that all these as stated are agreeable
                                  to the Lessor in
                                  advance, and it does not and shall not have any
                                  claim against the Lessee
                                  with regard thereto.

                              

                      

                      

                      
                        	
                              	14.3	
                                If
                                  the adaptations were made to the Premises or to
                                  meet the Lessee’s needs
                                  (as stated, subject to the express, prior, and
                                  written consent of the
                                  Lessor), all these, including their sundry details,
                                  shall, at the end of
                                  the Rental Period for any reason, be the property
                                  of the Lessor, with the
                                  exception of airconditioning systems installed
                                  (with the Lessor’s
                                  permission) by the Lessee. To prevent doubt, it
                                  is hereby expressly
                                  clarified that even if the Works shall be executed
                                  with the Lessor’s
                                  consent, it shall be entitled to instruct the Lessee,
                                  at the end of the
                                  rental in accordance with this agreement, to remove
                                  all or any of the
                                  Works, and to do anything required in order to
                                  restore the Premises to
                                  their prior condition, and the Lessee shall be
                                  obliged to do so within 14
                                  days from receipt of the Lessor’s notification. If the Lessee shall fail
                                  to respond to the Lessor’s instructions as stated above, the provisions
                                  in
                                  the end of Section 14.1.1 in this section shall
                                  apply, mutatis
                                  mutandis and
                                  in accordance with the circumstances of the
                                  matter.

                              

                      

                      

                      
                        	
                              	14.4	
                                Prior
                                  to the execution of all the said adaptations in
                                  the Premises (Section 14.2
                                  above), the Lessee shall furnish the Lessor with
                                  copies of the plans and
                                  diagrams (as the case may be) pertaining to the
                                  execution of all the
                                  adaptations. 

                              

                      

                      

                      
                        	
                              	14.5	
                                The
                                  Parties expressly agree that the Lessor shall be
                                  entitled at any time to
                                  execute changes in the front of the Building, provided
                                  that these (or any
                                  thereof) shall not substantively impair the Lessee’s use of the Premises
                                  in accordance with the purpose of the rental and
                                  in accordance with this
                                  agreement.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	14.6	
                                Any
                                  expense required for the adaptation of the fire
                                  detection system inside
                                  the Premises, in accordance with the requirements
                                  of the Lessor’s safety
                                  consultant, the fire department, the Municipality
                                  of Raanana, and/or any
                                  other body, and/or for the reconnection of the
                                  system inside the Premises
                                  to the central system of the Building, and/or adaptation
                                  to Israeli
                                  Standard 1220, or any other binding standard as
                                  shall be introduced in the
                                  future, shall be executed, applied, and included
                                  in the general costs for
                                  the preparation of the Premises for the Lessee’s needs as stated in
                                  Section 2 of Appendix B-2 below.

                              

                      

                      

                      
                        	
                              	14.7	
                                It
                                  is hereby agreed that any internal change that
                                  shall be constructed by the
                                  Lessee by means of detachable plaster divisions
                                  shall not require the
                                  prior consent of the Lessor, provided that the
                                  Lessee shall furnish the
                                  Lessor with plans as stated in Section 14.4 above,
                                  and that it shall
                                  restore the state to its prior condition in accordance
                                  with the content of
                                  Section 14.3 above.

                              

                      

                      

                      
                        	15.   
	
                                 

                              

                      

                      
                        	
                              	15.1	
                                The
                                  Lessee shall be liable for any damage to person
                                  and/or property or any
                                  type or kind that shall be caused within the areas
                                  of the Building, to the
                                  Lessor and/or to any third party, including - but
                                  without derogating from
                                  the generality of the above - to the employees
                                  of the Lessee itself,
                                  pertaining to the Lessee’s use of the Building, including the defective
                                  maintenance of the Premises by the Lessee and/or
                                  by or through the
                                  equipment installed in the Premises and/or the
                                  Works, improvements, and
                                  additions executed therein by the Lessee, and/or
                                  by any person on its
                                  behalf, and/or pursuant to an action or omission
                                  of its employees and/or
                                  those serving it and/or its agents and/or its suppliers
                                  and/or its clients
                                  and/or any person executing services for it and/or
                                  any person present in
                                  the Premises, in the Building, and/or in the Industrial
                                  Compound with the
                                  permission of the Lessee, provided that the damages
                                  as stated were not
                                  caused by the Lessor, its employees, its agents,
                                  its authorized persons,
                                  and/or any person on its behalf.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	15.2	
                                Without
                                  derogating from the Lessee’s liability, whether in accordance with the law
                                  or in accordance with this agreement, the Lessee
                                  undertakes to maintain,
                                  at its expense and for the duration of the rental,
                                  the following
                                  insurance:

                              

                      

                      
                        	
                              	15.2.1	
                                Insurance
                                  of the contents of the Premises, including the
                                  Works, the additions, and
                                  the improvements, including the furniture added
                                  by the Lessor and/or for
                                  the Lessor, in their full value, against all usual
                                  risks, by means of a
                                  policy known as an “extended fire” insurance policy.

                                Said insurance
                                  shall include a clause
                                  regarding the waiver of the right of substitution
                                  toward the Lessor
                                  pertaining to damage caused thereby, otherwise
                                  than
                                  deliberately.

                              

                      

                      
                        	
                              	15.2.2	
                                Insurance
                                  of all the Lessee’s activities in the Premises and in the environs
                                  thereof
                                  with employer’s liability insurance and third party liability
                                  insurance.

                                The Lessee
                                  undertakes to add the Lessor’s
                                  name to the said insurance as a beneficiary, jointly
                                  with the Lessee or
                                  separately therefrom, pertaining to the Lessor’s liability as the owner of
                                  the rights to the Industrial Compound as detailed
                                  above, and pertaining to
                                  its management of the Premises, and to annul the
                                  right of indemnification
                                  vis-à-vis the Lessor.

                                The Lessee
                                  undertakes to present to the
                                  Lessor, within 30 days from the date of signing
                                  this agreement, and
                                  without need for any further request, the insurance
                                  policies as detailed
                                  in this section above. The said insurance policies
                                  shall provide insurance
                                  coverage to the satisfaction of the Lessor’s insurance consultant, and the
                                  Lessee undertakes to amend and/or adapt these in
                                  accordance with the
                                  Lessor’s requirements as stated, if any. Without derogating
                                  from the
                                  generality of the above, the said insurance policies
                                  shall include a cross
                                  liability clause, and the limit of liability therein
                                  shall be in the sum
                                  of USD 500,000 (five hundred thousand US Dollars)
                                  per event and per
                                  period.

                                If the Lessee
                                  fails to maintain the
                                  insurance coverage as detailed in this Section
                                  15 above, the Lessor shall
                                  be entitled - but not obliged - to maintain this
                                  insurance coverage at the
                                  Lessee’s expense, and the Lessee shall be obliged to reimburse
                                  the Lessor
                                  for any amount it shall incur for this purpose,
                                  with the addition of
                                  interest in the rate stipulated in Section 29.3,
                                  to be calculated from the
                                  date of expenditure of the sum as stated by the
                                  Lessor and through their
                                  actual reimbursement thereto.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	15.3	
                                Without
                                  derogating from the provisions of Sections 15.1
                                  and 15.2 above, the Lessee
                                  hereby undertakes to take all steps that shall
                                  be required in order to
                                  nullify any request directed to the Lessor and/or
                                  any claim filed against
                                  the Lessor relating to any of the damages stated
                                  in Section 15.1 above,
                                  and to indemnify the Lessor for all sums it shall
                                  be required to expend
                                  under the terms of a verdict or arbitration ruling
                                  that shall be granted
                                  in such a claim, immediately upon the Lessor’s first request. The Lessee
                                  shall be given the opportunity to participate,
                                  at its expense, in the
                                  legal defense against any claim against the Parties
                                  pertaining to the
                                  rental in accordance with this agreement, together
                                  with the Lessor and
                                  with mutual cooperation between the
                                  two.

                              

                      

                      

                      
                        	
                              	15.4	
                                The
                                  Lessee undertakes that all the said policies shall
                                  include a clause
                                  providing for nullification with 60 days prior
                                  notice, and that the
                                  insurer in accordance with the said policies shall
                                  be required to inform
                                  the Lessor of the intention to nullify these, in
                                  writing, with advance
                                  warning of at least 60 days.

                              

                      

                      

                      Part
                        Six: Maintenance Services

                      
                        	16.   	
                                 

                              

                      

                      
                        	
                              	16.1	
                                The
                                  Lessor hereby undertakes to provide, and the Lessee
                                  hereby undertakes to
                                  purchase from the Lessor and/or from another third
                                  party, at Lessor’s
                                  discretion, maintenance services as detailed in
                                  the Maintenance Services
                                  Appendix attached to this agreement as Appendix
                                  C
                                  (which shall not be connected to the construction
                                  works to be undertaken
                                  in the Building and/or in the Industrial Compound
                                  by the Lessor), this at
                                  a reasonable and professional standard, and in
                                  accordance with the
                                  reasonable needs as required for the proper maintenance
                                  of the Building
                                  and/or the Industrial
                                  Compound.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                              	
                                As
                                  remuneration for these maintenance services, the
                                  Lessee shall pay the
                                  Lessor the sum of USD 2.50 per square meter per
                                  month. Payment for
                                  maintenance shall be made quarterly (in advance)
                                  with the Rental Fee, by
                                  standing order, as in Section 6.5 above. The maintenance
                                  fee shall be
                                  converted by the representative exchange rate of
                                  the dollar as stated
                                  above (USD 1.00 equals NIS 4.145), and shall be
                                  linked to the Consumer
                                  Price Index. VAT by law shall be added to the maintenance
                                  fee, to be paid
                                  by the Lessee together with the payment for the
                                  maintenance fee and
                                  against a lawful tax invoice.

                              

                      

                      

                      
                        	
                              	16.2	
                                As
                                  of September 1, 2006, (the date of commencement
                                  of the Additional Period),
                                  the maintenance fee to be paid by the Lessee shall
                                  be updated, such that
                                  this shall be adjusted to the monthly amount per
                                  square meter to be paid
                                  by the majority of the tenants in the Southern
                                  Wing of the
                                  Building.

                              

                      

                      

                      
                        	
                              	16.3	
                                The
                                  Lessor shall be entitled to undertake the execution
                                  of the said
                                  maintenance services by means of any body as it
                                  shall determine, at its
                                  absolute and exclusive discretion, and it shall
                                  be entitled to associate
                                  with the above-mentioned body by itself (and to
                                  collect from the Lessee
                                  the service fee due therefrom), or to instruct
                                  the Lessee to associate
                                  with that body in a services agreement, in such
                                  format as shall be current
                                  at this point with the Lessor or with the actual
                                  provider of the services
                                  (and to pay the service fee due therefrom directly
                                  to this body), provided
                                  that the service fee the Lessee shall be required
                                  to pay the Lessor or the
                                  body as stated shall not exceed that stated in
                                  Section 16.1 and/or 16.2
                                  above.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      Part
                        Seven: The Lessor’s Rights

                      
                        	17.   	
                                The
                                  Parties condition and agree that the Lessor and/or
                                  its representative
                                  and/or any person acting in its name and/or on
                                  its behalf shall be
                                  entitled to convey through (or on) the Premises
                                  pipes, channels, and other
                                  conduits, water, sewage, gas, electricity, telephone,
                                  and/or for any other
                                  purpose, and to execute works and/or installations
                                  and/or other repairs in
                                  the Premises for the purpose of the use of the
                                  property adjacent to the
                                  Premises, or for any similar purpose, all provided
                                  that
                                  -

                              

                      

                      
                        	
                              	17.1	
                                The
                                  Lessor shall use the authorities granted to it
                                  in this Section 17 in a
                                  form and manner that shall not harm the reasonable
                                  use of the Premises,
                                  and that the inconvenience and/or disruptions caused
                                  to the Lessee shall
                                  be as slight as possible.

                              

                      

                      

                      
                        	
                              	17.2	
                                The
                                  Lessor shall execute all repairs required to restore
                                  the state of the
                                  Premises to their prior condition in those parts
                                  of the Premises -
                                  including parts in which the works, improvements,
                                  and repairs were
                                  executed as stated above - injured by the execution
                                  of works as stated in
                                  Section 17 above.

                              

                      

                      

                      
                        	
                              	17.3	
                                The
                                  Lessor shall coordinate with the Lessee, insofar
                                  as possible, the dates on
                                  which the works as stated shall be
                                  executed.

                              

                      

                      

                      
                        	18.   	
                                The
                                  Lessor shall be eligible and entitled to execute
                                  all construction and
                                  development works it shall see fit in the Building
                                  and/or in the
                                  Industrial Compound, and the Lessee shall not be
                                  entitled to object to the
                                  execution of the works as stated and/or to intervene
                                  in the execution
                                  thereof.

                                The Lessor
                                  shall act so that the execution
                                  of the works mentioned in Section 17 above, and
                                  in this Section 18, shall
                                  not unreasonably and for a protracted period impair
                                  the Lessee’s
                                  activities and its possibility to use the
                                  Premises.

                              

                      

                      

                      
                        	19.   	
                                The
                                  Lessor and/or its representative have the right
                                  to enter the Premises,
                                  during the Lessee’s regular working hours, and after coordinating
                                  therewith reasonably in advance, in order -

                              

                      

                      
                        	
                              	19.1	
                                To
                                  examine whether the Lessee is complying with the
                                  conditions of this
                                  agreement.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	
                                19.2

                              	
                                To
                                  execute repairs as required for the purpose of
                                  the Building, or of any
                                  part thereof, within the area of the
                                  Premises.

                              

                      

                      

                      
                        	
                              	19.3	
                                To
                                  execute construction and/or demolition works it
                                  is entitled to execute in
                                  accordance with Part Seven of this agreement and
                                  Sections 17 and 18
                                  above.

                              

                      

                      

                      
                        	
                              	19.4	
                                To
                                  demonstrate the Premises to potential buyers and/or
                                  tenants, with prior
                                  coordination with the Lessee.

                              

                      

                      

                      
                        	20.   	
                                The
                                  Parties condition and agree that -

                              

                      

                      
                        	
                              	20.1	
                                The
                                  Industrial Compound, as well as the public areas
                                  in the Building,
                                  including roofs, security rooms, shelters, basements,
                                  entrance rooms,
                                  etc., shall remain in the sole legal possession
                                  of the Lessor, and the
                                  Lessee shall not be entitled to use these (otherwise
                                  than as described in
                                  Section 12 above), unless it has received prior
                                  and written authorization
                                  therefore from the Lessor, and within the framework
                                  of such restrictions
                                  as shall be established in such
                                  authorization.

                              

                      

                      

                      
                        	
                              	20.2	
                                The
                                  Lessor shall be entitled to use the Industrial
                                  Compound, the Building
                                  (with the exception of the Premises), and the joint
                                  areas in the Building,
                                  and/or to grant others permission to use these,
                                  in accordance with its
                                  absolute and exclusive discretion, provided that
                                  the Lessee’s reasonable
                                  use of the Premises, and its access thereto, shall
                                  not be disrupted, and
                                  that the empowered authorities shall authorize
                                  such use when such
                                  authorization is required.

                              

                      

                      

                      Part
                        Eight: Transfers; Replacement Lessee

                      
                        	21.   	
                                The
                                  Parties expressly condition and agree that the
                                  Lessor shall be entitled to
                                  sell and to transfer its rights in the Industrial
                                  Compound and/or the
                                  Building, and/or the Premises, and/or to execute
                                  therein (or not to oppose
                                  the execution therein) of any other disposition,
                                  to any person as it shall
                                  see fit, without its being required to receive
                                  the Lessee’s consent
                                  thereto, all provided that the Lessee’s rights in accordance with this
                                  rental agreement shall not be
                                  impaired.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	22.   	
                                 

                              

                      

                      
                        	
                              	22.1	
                                The
                                  Lessee hereby undertakes not to transfer the rental
                                  of the Premises to
                                  another, not to deliver or let the Premises to
                                  another, not to permit
                                  another to use the Premises, and not to include
                                  another in the possession
                                  and/or use of the Premises, or in the business
                                  managed therein, and not to
                                  grant another any right in the Premises, all these
                                  whether with or without
                                  remuneration, whether permanently or
                                  temporarily.

                              

                      

                      

                      
                        	
                              	22.2	
                                Notwithstanding
                                  the above, the Lessee shall be entitled to transfer
                                  or to assign its full
                                  rights in accordance with this agreement to another
                                  lessee, similar in its
                                  economic resilience and character to the Lessee
                                  or to the remaining
                                  tenants in the Building, provided that the following
                                  conditions are
                                  maintained:

                              

                      

                      
                        	
                              	22.1.1	
                                The
                                  identity of the other lessee has been authorized
                                  in advance by the Lessor.
                                  To prevent doubt, it is hereby clarified that the
                                  Lessor shall not refuse
                                  to grant its consent otherwise than on reasonable
                                  grounds.

                              

                      

                      
                        	
                              	22.1.2	
                                The
                                  other lessee shall furnish the Lessor with suitable
                                  securities to the
                                  Lessor’s satisfaction, and shall associate with the Lessor
                                  in a rental
                                  agreement as shall be current at that time with
                                  the
                                  Lessor.

                              

                      

                      
                        	
                              	22.1.3	
                                The
                                  other lessee shall request to use the entire Premises
                                  for the purpose of
                                  rental as stated in Section 2.1 above.  

                              

                      

                      

                      
                        	
                              	22.3	
                                It
                                  is agreed that Article 22 of the Rental and Loans
                                  Law, 5731-1971, or
                                  similar legal provisions enacted at any point in
                                  the future, shall not
                                  apply to the relations between the Parties in accordance
                                  with this
                                  agreement.

                                In this Section
                                  22 (including its
                                  sub-sections), “Premises” includes only part
                                  thereof.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      Section
                        Nine: Vacating the Premises

                      
                        	23.   	
                                The
                                  Lessor hereby undertakes that, not later than the
                                  end of the Rental
                                  Period, or at another date on which this agreement
                                  shall be terminated in
                                  accordance with the provisions of this agreement
                                  (either of which dates
                                  shall be referred to hereinafter as “the
                                  Vacating Date,”)
                                  it shall vacate the Premises of any person and
                                  object, with the exception
                                  of objects remaining in the Premises in accordance
                                  with this agreement,
                                  and shall deliver the Premises to the Lessor in
                                  a good, proper, clean, and
                                  orderly condition as it received them, with the
                                  exception of wear-and-tear
                                  accruing from reasonable use and in accordance
                                  with the purpose of the
                                  rental.

                              

                      

                      

                      
                        	24.   	
                                 

                              

                      

                      
                        	
                              	24.1	
                                Ninety
                                  (90) days prior to the return of the Premises to
                                  the Lessor by the Lessee,
                                  an inspection of the Premises shall be undertaken
                                  by the Lessor and/or a
                                  representative on its behalf, who shall, together
                                  with the Lessee, prepare
                                  a list of repairs the Lessee is required to execute,
                                  including repairs of
                                  damages and spoilages, and/or repairs and changes
                                  relating to the
                                  restitution of the Premises to its former state
                                  and condition in
                                  accordance with the state of the Premises at the
                                  time of delivery of
                                  possession (Section 3.4.3 above), and excluding
                                  reasonable wear-and-tear
                                  (hereinafter - “the
                                  Repairs;”)
                                  the above-mentioned list shall also determine the
                                  value of the
                                  Repairs.

                              

                      

                      

                      
                        	
                              	24.2	
                                The
                                  Lessee undertakes to execute all the Repairs, if
                                  required, in accordance
                                  with the above-mentioned list, by the Vacating
                                  Date of the Premises in
                                  accordance with the provisions of this
                                  agreement.

                              

                      

                      

                      
                        	
                              	24.3	
                                In
                                  any case in which the Lessee shall fail to execute
                                  the Repairs, these
                                  shall be executed by the Lessor at the expense
                                  of the Lessee, and the
                                  Lessor shall commence execution on the date on
                                  which this shall
                                  practically be possible in accordance with the
                                  state of possession of the
                                  Premises (hereinafter - “the
                                  Date of Commencement of the Repairs”).
                                  In such case, the period of repairs shall be considered
                                  to have begun from
                                  the Date of Commencement of the Repairs, and insofar
                                  as this period shall
                                  extend beyond the period of the duration of the
                                  rental in accordance with
                                  the provisions of this agreement, the Lessee shall
                                  be considered not to
                                  have vacated the Premises promptly for the duration
                                  of this period of
                                  excess, and the provisions of Section 25 pertaining
                                  to the failure
                                  promptly to vacate the Premises shall apply to
                                  this period of excess, and,
                                  in addition thereto, the Lessee shall be obliged
                                  to reimburse the Lessor,
                                  immediately upon first request, for all the Lessor’s expenses, and to
                                  reimburse the Lessor for any damage, loss, or prevention
                                  of profit
                                  accruing from the state of the Premises and/or
                                  the need to bring these to
                                  a proper and good condition.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	25.   	
                                 

                              

                      

                      
                        	
                              	25.1	
                                If
                                  the Lessee fails to vacate the Premises promptly
                                  on the Vacating Date,
                                  contrary to the provisions of this agreement, then,
                                  without derogating
                                  from the Lessor’s right to exercise its right to receive the Premises
                                  by
                                  any lawful means as it shall see fit, the Lessee
                                  shall be obliged to pay
                                  the Lessor agreed and predetermined compensation,
                                  in an amount equal at
                                  that time to double (200%) the daily Updated Rental
                                  Fee for each square
                                  meter of the Premises, for each day after the Vacating
                                  Date on which it
                                  shall continue to hold the Premises.

                                
                                  
                                    The
                                      Parties
                                      hereby expressly declare that the agreed and
                                      predetermined sum of
                                      compensation stated above was determined after
                                      a balanced and cautious
                                      evaluation of the damages that shall be caused
                                      to the Lessor pursuant to
                                      the non-vacating of the Premises by the Lessee
                                      as of the Vacating Date,
                                      and that the Lessee shall accordingly be prevented
                                      from claiming that the
                                      compensation was determined without reasonable
                                      proportion to the damage
                                      the could have been predicted at the time of
                                      execution of this agreement,
                                      as the probable result of the failure promptly
                                      to vacate the Premises on
                                      the Vacating Date.

                                  

                                  The
                                    said sum of compensation in Section 25.1 shall
                                    be linked to the Base Index
                                    and updated in accordance with the rate of change
                                    between the Base Index
                                    and the Index known as of the Vacating
                                    Date.

                                

                              

                      

                      
                        	
                              	
                                25.2

                              	
                                The
                                  Parties hereby expressly condition and agree that
                                  the content of Section
                                  25.1 above shall not release the Lessee from its
                                  undertakings in
                                  accordance with Section 23 above, and/or grant
                                  the Lessee the right to
                                  continue to hold the Premises (against payment
                                  of the agreed and
                                  predetermined compensation), and/or constitute
                                  consent on the part of the
                                  Lessor to the extension of the Rental Period, and/or
                                  constitute waiver on
                                  the part of the Lessor of any of its rights, and/or
                                  impair the Lessor’s
                                  right to receive any other remedy and relief, including
                                  - but without
                                  derogating from the generality of the above- the
                                  removal of the Lessee
                                  from the Premises (by a claim to be filed in asummary
                                  procedure) and
                                  compensation in an amount higher than that stated
                                  in the above-mentioned
                                  Section 25.1.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      Part
                        Ten: Inapplicability of the Tenant Protection Laws

                      
                        	26.   	
                                The
                                  Lessee hereby expressly declares that it has not
                                  paid, and shall not pay,
                                  to the Lessor any amount that is for its consent
                                  to let the Premises to
                                  it, whether by way of key money or otherwise, and
                                  that the construction of
                                  the Premises was completed after August 20, 1968,
                                  and, accordingly, it is
                                  hereby agreed that -

                              

                      

                      
                        	
                              	26.1	
                                The
                                  provisions of the Tenant Protection Law (Combined
                                  Version), 5732-1972, and
                                  the provisions of any other law granting and/or
                                  that shall grant
                                  protection in the Premises, do not and shall not
                                  apply to the rental in
                                  accordance with this agreement.

                              

                      

                      

                      
                        	
                              	26.2	
                                The
                                  Lessee shall not be eligible to receive any payment
                                  upon vacating the
                                  Premises in accordance with Section Four of the
                                  Tenant Protection Law
                                  (Combined Version), 5732-1972.

                              

                      

                      

                      Part
                        Eleven: Breaches

                      
                        	27.   	
                                Either
                                  Party that shall breach and/or fail to observe
                                  any of its obligations in
                                  accordance with this agreement shall be required
                                  to compensate the
                                  observing Party for all damages and losses it incurs
                                  pursuant thereto,
                                  without derogating from the right of the observing
                                  Party to receive any
                                  other and/or additional relief and/or remedy, including
                                  the enforcement of
                                  the provisions of this agreement and/or the obtaining
                                  of injunctions
                                  pertaining to its breach.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	28.   	
                                 

                              

                      

                      
                        	
                              	28.1	
                                The
                                  Parties hereby state that a breach of any term
                                  and/or undertaking
                                  stipulated in sections 2, 3, 4, 5, 6, 7, 8, 9,
                                  11, 13, 14, 15, 16, 22, and
                                  23, including non-compliance with the dates stated
                                  therein, shall be
                                  considered a fundamental breach of this agreement.

                                To remove any
                                  doubt - even if the Lessor
                                  takes upon himself the Lessee’s obligations, or some of the Lessee’s
                                  obligations, this shall not detract from its constituting
                                  a breach
                                  relating to a fundamental breach.

                              

                      

                      

                      
                        	
                              	28.2	
                                If
                                  either Party committed a fundamental breach of
                                  this agreement, and failed
                                  to rectify this breach within 14 days, the observing
                                  Party shall be
                                  entitled, at the end of the period stated above,
                                  to inform the other
                                  Party, in writing, of the nullification of the
                                  rental in accordance with
                                  this agreement, and, if it shall do so, the Lessee
                                  shall vacate the
                                  Premises and return these to the Lessor, in the
                                  condition as stated in
                                  Section 23 above, within 14 days from the date
                                  of the notification. To
                                  prevent doubt, the said period above (14 days from
                                  the remedy of the
                                  breach, and/or 14 days from the breach), shall
                                  not, in any case, be
                                  considered as periods in which the Lessee has been
                                  excused interest on its
                                  arrears in payment.

                                The content
                                  of this section shall not
                                  derogate from the right of the observing Party
                                  to claim and receive,
                                  together with the nullification of the agreement
                                  or instead thereof, any
                                  other lawful relief, including compensation and/or
                                  a decree nisi and/or an
                                  injunction.

                              

                      

                      

                      
                        	29.   	
                                Without
                                  derogating from the provisions of Section 27 and
                                  28 above, the Parties
                                  hereby condition and agree as
                                  follows:

                              

                      

                      
                        	
                              	29.1	
                                Without
                                  derogating from other provisions in this agreement,
                                  if the Lessee fails to
                                  pay any amount it is required to pay in accordance
                                  with the provisions of
                                  this agreement, the Lessor shall be entitled -
                                  but not obliged - to pay
                                  the above-mentioned amount, or any part thereof,
                                  after granting the Lessee
                                  prior notification of 48 hours of its intention
                                  so to do, and, if it does
                                  so, the Lessee shall be obliged to pay the Lessor,
                                  immediately upon being
                                  so required thereby, any amount expended by the
                                  Lessor as stated, with the
                                  addition of interest as stated in Section 29.3
                                  below, calculated from the
                                  date of expenditure of the sum by the Lessor and
                                  through their actual
                                  reimbursement thereto.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	29.2	
                                If
                                  the Lessee is in arrears in paying any amount it
                                  shall be required to pay
                                  the Lessor in accordance with the provisions of
                                  this agreement, then,
                                  without derogating from the Lessor’s right to request and receive any
                                  right granted thereto in this agreement and/or
                                  by law, it shall be
                                  entitled to receive from the Lessee interest in
                                  the rate as stated in
                                  Section 29.3 below, calculated from the date of
                                  applicability of the
                                  payment as stated and through its actual payment,
                                  or Index linkage, for
                                  the duration of the said period as above, as the
                                  Lessor shall
                                  choose.

                              

                      

                      

                      
                        	
                              	29.3	
                                The
                                  interest the Lessee shall be required to pay the
                                  Lessor in accordance with
                                  the provisions of this agreement shall be the bank
                                  interest for ordinary
                                  unauthorized credit as this shall be at the time
                                  of the payment, at Bank
                                  Hapoalim Ltd. - with the addition of 1% per month
                                  or any part thereof. The
                                  authorization in writing of the director of a branch
                                  of Bank Hapoalim Ltd.
                                  regarding the bank interest rate for ordinary unauthorized
                                  credit
                                  collected at this bank, at the given time, shall
                                  constitute conclusive
                                  proof for this matter.

                              

                      

                      

                      
                        	30.   	
                                 

                              

                      

                      
                        	
                              	30.1	
                                It
                                  is hereby agreed that if the Lessee shall be in
                                  arrears in any payment
                                  incumbent on it in accordance with this agreement,
                                  including the Rental
                                  Fee, maintenance expenses, and/or fees for usage
                                  of the electric grid,
                                  and/or any other consumption and usage charges,
                                  and the Lessee shall fail
                                  to regulate these arrears within 14 days from the
                                  date on which it shall
                                  be required to do so in writing by the Lessor,
                                  the Lessor shall be
                                  entitled, in addition to any other relief granted
                                  in accordance with this
                                  agreement and/or in accordance with any law, to
                                  take any or all of the
                                  following steps:

                              

                      

                      
                        	
                              	30.1.1	
                                To
                                  disconnect the electricity and/or water supply
                                  to the
                                  Premises;

                              

                      

                      
                        	
                              	30.1.2	
                                To
                                  discontinue all the other maintenance services
                                  for the
                                  Premises;

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	30.1.3	
                                To
                                  delay the removal of equipment, raw materials,
                                  and products belonging to
                                  the Lessee and present in the Premises pending
                                  payment of all amounts not
                                  yet paid by the Lessee up to that
                                  date;

                              

                      

                      
                        	
                              	30.1.4	
                                To
                                  remove the equipment, raw materials, and products
                                  from the Premises, store
                                  them at the Lessee’s expense, and take possession of the Premises
                                  or let
                                  them to another;

                              

                      

                      
                        	
                              	30.1.5	
                                To
                                  sell the equipment, raw materials, and products
                                  in the Premises for the
                                  purpose of payment of the debt, and to transfer
                                  these for storage at the
                                  Lessee’s expense and liability.

                              

                      

                      

                      
                        	
                              	30.2	
                                Without
                                  derogating from the provisions of Section 30 above
                                  (including its
                                  subsections), the Lessee hereby expressly agrees,
                                  by way of an irrevocable
                                  consent and undertaking on which third party rights
                                  depend, that insofar
                                  as it shall violate the rental agreement and fail
                                  to rectify the breach
                                  (as described in Section 30.1 above), it hereby
                                  agrees, irrevocably as
                                  stated, to the appointment of the Lessor’s representative as a receiver
                                  for the business and equipment in the Premises
                                  (or for the Lessee itself,
                                  as the case shall be), and it further hereby permits
                                  the Lessor (or its
                                  representative) to any action required - without
                                  any opposition on the
                                  part of the Lessee - to remove the Lessee and its
                                  chattels from the
                                  Premises and to store the Lessee’s chattels at the Lessee’s
                                  expense.

                              

                      

                      

                      
                        	31.   	
                                Without
                                  derogating from the content of Sections 29 and
                                  30 above, the Parties
                                  condition and agree that, in any case in which
                                  a temporary or permanent
                                  receiver, and/or a pre-liquidator, is appointed
                                  for the Lessee, and/or a
                                  liquidation order and/or order for the appointment
                                  of a temporary
                                  liquidator, is issued against it, and the said
                                  order shall not be
                                  cancelled within 21 days, the act of appointment
                                  and/or the order and its
                                  non-cancellation within the said period, shall
                                  constitute a fundamental
                                  breach of the provisions of this agreement, and
                                  the Lessor shall be
                                  entitled to activate, in the said circumstances,
                                  the provisions of
                                  Sections 29 and 30 above against the Lessee and/or
                                  the receiver and/or the
                                  pre-liquidator, and/or the liquidator and/or the
                                  temporary
                                  liquidator.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                       

                      Part
                        Twelve: Securities

                      
                        	32.   	
                                Bank
                                  Guarantee

                              

                      

                      
                        	
                              	32.1	
                                As
                                  partial security for the payment of the Rental
                                  Fee and other payments,
                                  including payments pertaining to maintenance, use,
                                  parking, consumption,
                                  and the other charges of the Lessee in accordance
                                  with this agreement, the
                                  Lessee shall, on the occasion of signing this agreement,
                                  submit an
                                  autonomous bank guarantee to the Lessor’s satisfaction, valid from the
                                  date of signing the agreement and through the end
                                  of three (3) months
                                  after the end of the Rental Period, in an amount
                                  in new Israeli shekels
                                  equal to the sum of USD 180,000 (one hundred eighty
                                  thousand dollars) (NIS
                                  746,000), linked to the Consumer Price Index in
                                  accordance with this
                                  agreement.

                              

                      

                      

                      
                        	
                              	32.2	
                                The
                                  Parties agree that, subject to compliance with
                                  all the Lessee’s
                                  obligations in accordance with this agreement,
                                  the amount of the guarantee
                                  shall be reduced by USD 12,500, each year through
                                  November 30, 2005. It is
                                  clarified that, as of November 30, 2005, and through
                                  the end of the Rental
                                  Period, the amount of the guarantee shall remain
                                  in the sum of USD
                                  120,000.

                              

                      

                      

                      
                        	
                              	32.3	
                                An
                                  essential condition for the realization of the
                                  right to rent the Premises
                                  for an Additional Period is the extension of the
                                  validity of the bank
                                  guarantee through to November 30, 2009, in the
                                  sum of USD
                                  120,000.

                                To prevent
                                  doubt, it is clarified and
                                  emphasized that the bank guarantee shall also apply
                                  to the Lessee’s
                                  charges in accordance with Appendix B-2 to the
                                  rental agreement, including
                                  its various sub-sections.

                              

                      

                      

                      Part
                        Thirteen: Miscellaneous

                      
                        	33.   	
                                With
                                  the signing of this rental agreement, the contractual
                                  association between
                                  the Parties in accordance with the rental agreement
                                  dated March 10, 2000,
                                  including the two appendices to the rental agreement,
                                  is terminated by
                                  consent, as of the Date of Actual Delivery of Possession,
                                  as stated in
                                  Section 3.5.3 of this agreement, viz. October 16,
                                  2001 or October 23,
                                  2001, whichever is the later, provided that that
                                  Lessee has complied with
                                  all its undertakings relating to these Premises
                                  and vacated by the
                                  above-mentioned date.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	34.   	
                                The
                                  cost of stamp duty for this agreement shall be
                                  borne by the Parties in
                                  equal parts.

                              

                      

                      

                      
                        	35.   	
                                The
                                  Parties expressly condition and agree that the
                                  execution of each of the
                                  Lessor’s obligations in accordance with this agreement
                                  is conditioned on
                                  the preceding observance by the Lessee of its obligations,
                                  and that the
                                  Lessor is entitled - in addition to any other right
                                  accruing from this
                                  agreement and/or from any law - to delay execution
                                  of any of its
                                  obligations pending compliance by the Lessee with
                                  all its obligations for
                                  which the date of execution has occurred as of
                                  that
                                  time.

                              

                      

                      

                      
                        	36.   	
                                If
                                  the date for the execution of any obligation in
                                  accordance with this
                                  agreement falls on the Sabbath, a festival, or
                                  any other day of rest, the
                                  said obligation shall be performed on the next
                                  business day after the said
                                  date, and the actual date of the obligation shall
                                  be considered the
                                  original date of obligation for every
                                  purpose.

                              

                      

                      

                      
                        	37.   	
                                This
                                  agreement reflects the full and exhaustive agreement
                                  between the Parties
                                  regarding the matters and issues discussed therein,
                                  and it replaces and
                                  nullifies any presentation, agreement, negotiation,
                                  custom, memorandum,
                                  proposals, summaries of discussions, letters of
                                  intent and/or undertaking,
                                  and any other document, that pertained or was exchanged
                                  (whether in
                                  writing or verbally) on the said matters and issues
                                  between the Parties
                                  prior to the signing of this
                                  agreement.

                              

                      

                      

                      
                        	38.   	
                                The
                                  Parties shall take all additional actions (including
                                  execution of
                                  payments, bearing of costs, signing additional
                                  documents, and furnishing
                                  any authorization) required of them for the purpose
                                  of the application and
                                  execution of the letter and spirit of this
                                  agreement.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	39.   	
                                The
                                  agreement of either of the Parties to deviate from
                                  any condition in this
                                  agreement, in a specific instance or in a series
                                  of instances, shall not
                                  constitute a precedent and shall not be used for
                                  comparison by analogy for
                                  any other instance in the future.

                              

                      

                      

                      
                        	40.   	
                                If
                                  either Party did not enforce, or enforced in arrears,
                                  any of the rights
                                  accruing to it in accordance with this agreement
                                  and/or by law, in a given
                                  instance or in a series of instances, this shall
                                  not be considered a
                                  waiver of the said right or of any other
                                  rights.

                              

                      

                      

                      
                        	41.   	
                                The
                                  Parties hereby waive any right of offsetting granted
                                  to them in accordance
                                  with any law and/or agreement, all with regard
                                  to their obligations and
                                  rights in accordance with this
                                  agreement.

                              

                      

                      

                      
                        	42.   	
                                The
                                  Parties hereby expressly agree that this agreement
                                  and its upholding by
                                  the Parties shall be determined, interpreted, and
                                  regulated in accordance
                                  with the laws of the State of Israel. The authorized
                                  courts in Tel Aviv,
                                  and these alone, shall have exclusive judicial
                                  authority in any dispute
                                  relating to this agreement.

                              

                      

                      

                      
                        	43.   	
                                Notifications
                                   relating to this agreement shall be sent by registered
                                  mail or facsimile,
                                  or shall be delivered by hand in accordance with
                                  the Parties’ addresses as
                                  stated in the above Preamble (or any other address
                                  as shall be the subject
                                  of appropriate written notification), and any notification
                                  as stated shall
                                  be considered to have been delivered to its destination
                                  at the earliest of
                                  the following times: on its dispatch by facsimile,
                                  or on its actual
                                  delivery (or its offering to the addressee, in
                                  the even of refusal to
                                  accept), or after three (3) business days from
                                  the date on which it was
                                  delivered for dispatch by registered
                                  mail.

                              

                      

                      

                      

                      Witnessed
                        by the Parties’ signatures:

                      
                         

                        
                          

                            
                              	
                                      Taya
                                        Center Ltd.

                                    	 	
                                      Wintegra
                                        Ltd.

                                    
	 	 	 
	
                                      By:
                                        [Signature and Stamp]

                                    	 	
                                      
                                        By:
                                          [Signature and Stamp]

                                      

                                    

                            

                             

                            
                              
                                
                                

                              

                              
                                
                                

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                          

                        

                      

                      

                      Appendix
                        B-1 - Section 3.3 of the Agreement

                      

                      Specifications
                        for the Delivery of the Premises As Is to Wintegra Ltd.

                      

                      
                        	1.     	
                                Gross
                                  area of 1,119 sq.m., divided into -

                                
                                  10
                                    rooms;

                                  3
                                    conference rooms, each with mini-closet and sink;

                                  6
                                    laboratories, electric, computer, and communications
                                    rooms;

                                  Kitchenette,
                                    as describe below;

                                  Open
                                    space work corners in the remaining area of the
                                    Premises as stated in the
                                    Divisions Plan prepared by Architect Ilan Eisen
                                    and attached to the
                                    agreement.

                                

                              

                      

                       

                      

                      
                        	2.     	
                                Carpeting
                                  -
                                  wall-to-wall carpeting throughout the Premises,
                                  with the exception of the
                                  laboratories, electricity and computer rooms, which
                                  are covered with
                                  antistatic tiling, and the kitchenette, which is
                                  tiled in
                                  ceramics.

                              

                      

                      

                      
                        	3.     	
                                Ceilings
                                  -
                                  acoustic ceilings from modular mineral plates,
                                  60/60, throughout the
                                  Premises.

                              

                      

                      

                      
                        	4.     	
                                Lighting
                                  units
                                  -
                                  sunken light units (louvers) throughout the Premises,
                                  and dual purpose
                                  emergency / routine lighting as per the standard,
                                  in accordance with as
                                  made plan no. 439-102 and 439-___ prepared
                                  by Engineer Yitzhak Vatnik, attached to the
                                  agreement.

                              

                      

                      

                      
                        	5.     	
                                Doors
                                  -
                                  painted wooden doors on all rooms; double glass
                                  entrance door. Steel
                                  “Pladelet” doors on the rear emergency exit and in the storeroom
                                  by the
                                  small desk - opposite the executive
                                  rooms.

                              

                      

                      

                      
                        	6.     	
                                Windows
                                  -
                                  windows according to the standard in the building,
                                  as currently comprised
                                  - 50% for “dry keep” opening.

                              

                      

                      

                      
                        	7.     	
                                Bathrooms
                                  -
                                  (in the public floor areas) - 3
                                  units of women’s bathrooms;

                                3 units of
                                  men’s bathrooms + 3 men’s
                                  urinals.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      
                        	8.     	
                                Kitchenette
                                  -
                                  lower utensils closet and upper utensils closet,
                                  sink, and marble
                                  counter.

                              

                      

                      

                      
                        	9.     	
                                Power
                                  and communications facility
                                  -
                                  according to as made plan no. 439-103, 108, prepared
                                  by Engineer Vatnik,
                                  attached to the agreement.

                                
                                  Electrical
                                    board
                                    -
                                    according to as made plan no. N:SL119, prepared
                                    by E.M.I. - Electric Works
                                    Ltd., dated February 4, 1997, and attached to
                                    the agreement.

                                  Alarm
                                    system
                                    -
                                    wiring for an alarm system, including detectors,
                                    throughout the
                                    Premises.

                                  UPS
                                    system
                                    -
                                    wiring for a UPS system in most of the area of
                                    the
                                    Premises.

                                

                              

                      

                       

                      
                        	
                                10.   

                              	
                                Safety
                                  and PA
                                  -
                                  two detection and smoke systems in accordance with
                                  the fire department
                                  requirements, also connected to the main coordinator
                                  in the Taya Center,
                                  and a PA system in accordance with as made plan
                                  no. 439-106, 107, prepared
                                  by Engineer Yitzhak Vatnik, attached to the
                                  agreement.

                              

                      

                      

                      
                        	11.   	
                                Air-conditioning
                                  (for heating and cooling)
                                  in
                                  accordance with as made plan 388-2-1 (new, prepared
                                  by Engineer Yaacov
                                  Bar-Lev - 5 split units (Elco) for air-conditioning
                                  of the rooms facing
                                  the parking lot on the third floor, and 10 mini-central
                                  units (Unique) for
                                  air-conditioning the remaining areas of the Premises.

                                The list of
                                  the air-conditioning units is
                                  detailed below:

                              

                      

                      

                      
                        	
                                Premises

                              	
                                Type

                              	
                                Model

                              	
                                HP
                                  BTV

                              	
                                Date

                              	
                                By

                              	
                                Warranty
                                  until

                              
	 	 	 	
                                Ton
                                  of refrigeration

                              	
                                Installed

                              	 	 
	
                                Webaccess

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 2-3 - 40,41,42 + 54,55 

                              	
                                6
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                Former

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 5 - room 37

                              	
                                4
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                3

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 1-7, rooms 68-77

                              	
                                9
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                4

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 2-7, r. 45-48, 59-63

                              	
                                9
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                5

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 3-7 - 51-58, 82-84

                              	
                                9
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                6

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 8 - room 67

                              	
                                2.5
                                  tr - MS300

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                7

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 10 - rooms 49,50,85

                              	
                                5
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                8

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 11 - rooms 89,90

                              	
                                6
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                9

                              	
                                Mini
                                  central

                              	
                                Unique
                                  - area 12 - room 88 (lab)

                              	
                                6
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                10
                                  - addition by Webaccess

                              	
                                Mini
                                  central

                              	
                                 

                              	 	
                                Sept.
                                  98

                              	
                                Thermodor

                              	
                                Sept.
                                  98

                              
	
                                1

                              	
                                Split
                                  - upper

                              	
                                Electra-Elco
                                  - room 43

                              	
                                1.6
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                2

                              	
                                Split
                                  - upper

                              	
                                Electra-Elco
                                  - room 78

                              	
                                1.4
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                3

                              	
                                Split
                                  - upper

                              	
                                Electra-Elco
                                  - room 79

                              	
                                1.4
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                4

                              	
                                Split
                                  - upper

                              	
                                Electra-Elco
                                  - room 80

                              	
                                1.4
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              
	
                                5

                              	
                                Split
                                  - upper

                              	
                                Electra-Elco
                                  - room 81

                              	
                                1.4
                                  ton refrig.

                              	
                                March
                                  97

                              	
                                Thermodor

                              	
                                March
                                  98

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                                12.   

                              	
                                List
                                  of items left in the Premises:

                              

                      

                       

                      
                        	
                              	1.	
                                In
                                  the Conference Room
                                  -
                                  large table, 1.83 x 6.00, and wall board 2.00 x
                                  1.00 sq.m.
                                  

                              

                      

                       

                      
                        	
                              	2.	
                                Secretaries’
                                  Corner
                                  -
                                  secretaries desk, closet including lower and upper
                                  closet - width 2.60 m -
                                  8 doors, and mini-closet, width 0.53m and height
                                  0.77
                                  m.

                              

                      

                       

                      
                        	
                              	3.	
                                Second
                                  executive room
                                  -
                                  2 closets, width 2.40 m, height 2.12 - 6 doors
                                  each.

                              

                      

                       

                      
                        	
                              	4.	
                                Vertical
                                  curtains
                                  -
                                  25 vertical curtain units on windows, and 6 (long)
                                  on glass doors facing
                                  the parking lot on Hataasiya St.

                              

                      

                       

                       

                      
                        	
                                [Signature
                                  and Stamp}

                              	 	
                                [Signature
                                  and Stamp]

                              
	
                                Taya
                                  Center Ltd.

                              	 	
                                Wintegra
                                  Ltd.

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      Appendix
                        B-2

                      

                      Procedure
                        for the Delivery of the Premises

                      

                      
                        	1.     	
                                The
                                  delivery of the Premises shall be executed in accordance
                                  with the
                                  Authorized Implementation Plans, as these shall
                                  be determined by the
                                  project manager and the Lessee. The Parties shall
                                  fully cooperate in order
                                  to complete the Adaptation Works promptly and to
                                  the Lessee’s
                                  satisfaction.

                              

                      

                      

                      
                        	2.     	
                                All
                                  works deriving from the Authorized Implementation
                                  Plans shall be executed
                                  by the Lessor and at its expense, provided and
                                  on condition that all the
                                  expenses on account thereof, including all fees
                                  for consultants of all
                                  types - including the electrical engineer, the
                                  air-conditioning engineer,
                                  the plumbing engineer, the safety engineer, the
                                  acoustics engineer, the
                                  project manager for the management and supervision
                                  of all the works that
                                  are the subject of the Authorized Implementation
                                  Plans, and all the
                                  remaining as stated above, shall not exceed the
                                  sum of one hundred fifty
                                  (USD 150.-) dollars, per net square meter, in accordance
                                  with the net area
                                  of the Premises of 973.04 sq.m. (nine hundred seventy
                                  three square
                                  meters), and, in total, USD 145,956 (one hundred
                                  forty five thousand nine
                                  hundred fifty six US dollars).

                                It is clarified,
                                  to prevent doubt, and
                                  without derogating from the generality of the above,
                                  that the fees of all
                                  the consultants stated in this Section 2 above
                                  were determined at the
                                  Lessor and the Lessee’s request (with the exception of the project manager
                                  and the safety consultant, with whom the association
                                  was made by the
                                  Lessor), subject to the Lessor’s
                                  authorization.

                              

                      

                      

                      
                        	3.     	
                                The
                                  Parties agree that the project manager shall examine
                                  and authorize, in
                                  full coordination with the Lessee’s representatives, accounts from the
                                  implementation contractors and consultants, as
                                  well as the conformity of
                                  the works and the Authorized Work Plans, provided
                                  that, in this matter, he
                                  shall act in accordance with accepted professional
                                  standards and in good
                                  faith.

                              

                      

                      

                      
                        	4.     	
                                Any
                                  expense that shall be required in connection with
                                  the execution of the
                                  works that are the subject of these specifications
                                  and the cost of which
                                  shall be above
                                  the sum of USD 150.- per square meter as stated
                                  (in accordance with the
                                  net area of the Premises of 973.04 square meters),
                                  shall be borne and paid
                                  by the Lessee, or shall be paid by the Lessor and
                                  reimbursed by the Lessee
                                  to the Lessor not later than the Actual Date of
                                  Delivery of Possession.
                                  For this purpose, it is agreed that no expense
                                  beyond the USD 150 per
                                  square meter as stated shall be incurred otherwise
                                  than by coordination
                                  with the Lessee and subject to its
                                  consent.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	5.     	
                                The
                                  Lessee agrees that if it fails to meet its undertaking
                                  to rent the
                                  Premises for the Rental Period in accordance with
                                  this agreement, and
                                  fails to pay the Rental Fee for the period of at
                                  least
                                  fifty six months, it then hereby undertakes, in
                                  any case as stated, and
                                  irrevocably, to repay the Lessor an amount constituting
                                  the return of the
                                  discount in the Rental Fee (granted on the assumption
                                  of fifty six full
                                  months of rental), in accordance with a repayment
                                  of 21.43% a year (viz.
                                  21.43% of the total of USD 145,956.-, with the
                                  addition of VAT), or the
                                  appropriate relative part (for a part of a year)
                                  (for example only, if the
                                  actual rental is for a period of only thirty two
                                  months, the amount to be
                                  paid to the Lessor by the Lessee shall be 42.86%
                                  of the discount amount
                                  granted as stated, viz. USD 62,557, with the addition
                                  of VAT, and if the
                                  actual rental shall be for a period of only 20
                                  months, then the amount to
                                  be paid to the Lessor by the Lessee shall be 21.43%
                                  of the discount amount
                                  in the Rental Fee as stated, viz. USD 31,278.50,
                                  with the addition of VAT
                                  (“the
                                  Restitution Amount”).

                                The Restitution
                                  Amount shall be converted
                                  in accordance with the representative exchange
                                  rate of the dollar as
                                  stated above (USD 1.00 equals NIS 4.145), shall
                                  be linked to the Consumer
                                  Price Index in accordance with the rental agreement,
                                  with the addition of
                                  annual interest at the rate of 7%, and shall be
                                  paid immediately upon
                                  notification by the Lessee of its intention to
                                  vacate the Premises prior
                                  to the end of 5 years’ rental.

                              

                      

                       

                      

                      
                        	
                                 Taya
                                  Center Ltd.

                              	 	
                                Wintegra
                                  Ltd.

                              
	 	 	 
	
                                 [Signature
                                  and Stamp}

                              	 	
                                [Signature
                                  and Stamp]

                              

                      

                       

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      

                      Appendix
                        C - Maintenance Appendix

                      (Section
                        16 of the Agreement)

                      

                      
                        	1.    	
                                The
                                  Lessor hereby undertakes to provide, and the Lessee
                                  hereby undertakes to
                                  purchase from the Lessor and/or from an other third
                                  party, as decided by
                                  the Lessor, the maintenance services detailed below,
                                  at a reasonable and
                                  professional level, and in accordance with reasonable
                                  needs as shall be
                                  required for the purpose of the proper maintenance
                                  of the Building and/or
                                  the Industrial Compound. In return for these maintenance
                                  services, the
                                  Lessee shall pay the Lessor USD 2.5 per square
                                  meter per month. The
                                  payment for maintenance services shall be made
                                  on a Quarterly basis (in
                                  advance) with the Rental Fee.

                              

                      

                      

                      
                        	2.    	
                                Beginning
                                  September 1, 2006, (the date of commencement of
                                  the Additional Period),
                                  the maintenance fee to be paid by the Lessee to
                                  the Lessor shall be
                                  according to the maintenance fee (per square meter)
                                  that shall be paid by
                                  most of the tenants in the Industrial Compound,
                                  as detailed in Section
                                  16.2 of the agreement.

                              

                      

                      

                      
                        	3.    	
                                To
                                  prevent doubt, it is clarified that the maintenance
                                  fee shall also be
                                  linked to the Index (in accordance with the manner
                                  of linkage of the
                                  Rental Fee).

                              

                      

                      

                      
                        	4.    	
                                In
                                  this appendix, the following terms shall have the
                                  meaning recorded
                                  alongside:

                                
                                  “Built
                                    Areas” - the areas on which buildings are erected, including
                                    the areas
                                    adjacent to each building.

                                  “Public
                                    Built Areas” - those parts of the buildings serving all the
                                    tenants of the
                                    building.

                                  Terms
                                    not expressly defined in this appendix shall
                                    have the same meaning as in
                                    the rental agreement to which this appendix is
                                    attached.

                                

                              

                      

                      
                         

                      

                      
                        	5.    	
                                The
                                  maintenance services as detailed in this appendix
                                  are the minimum
                                  maintenance services the Lessor undertakes to
                                  provide.

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	6.    	
                                The
                                  Lessor shall not be obliged to provide and/or execute
                                  and/or cause to be
                                  provided or executed additional maintenance services,
                                  but it shall be
                                  entitled, at its discretion, to do
                                  so.

                              

                      

                      

                      
                        	7.    	
                                The
                                  maintenance services as detailed in this appendix
                                  shall be provided or
                                  executed to a reasonable professional standard,
                                  efficiently, and on an
                                  ongoing basis, with the goal of maintaining the
                                  Built Areas and the Public
                                  Built Areas and enabling quality of life for the
                                  Lessee, for its employees
                                  and its guests, for the entire duration of the
                                  Rental
                                  Period.

                              

                      

                      

                      
                        	8.     	
                                The
                                  maintenance services that shall be provided and/or
                                  executed by the Lessor,
                                  and/or which it shall cause to be provided or executed,
                                  shall be as
                                  follows:

                              

                      

                      
                        	
                              	8.1	
                                Cleaning
                                  of the Built Areas and the Public Built Areas (with
                                  the exception of the
                                  parts of those areas held directly by the Lessee),
                                  including cleaning of
                                  internal non-municipal streets roads, and sidewalks,
                                  parking lots,
                                  stairwells, and corridors (excluding corridors
                                  and stairwells held by the
                                  Lessee).

                              

                      

                      

                      
                        	
                              	8.2	
                                Gardening
                                  works in the decorative areas adjacent to the
                                  Building.

                              

                      

                      

                      
                        	
                              	8.3	
                                Maintenance
                                  of the parking lots, and the parking areas maintained
                                  and/or which shall
                                  be installed in the area.

                              

                      

                      

                      
                        	
                              	8.4	
                                Attention
                                  (including financing) in all matters relating to
                                  the supply of electricity
                                  (on the basis of the cost of electricity for residential
                                  use).

                              

                      

                      

                      
                        	
                              	8.5	
                                Installation
                                  and maintenance of environmental signs in the Industrial
                                  Compound and
                                  adjacent to the Building. 

                              

                      

                      

                      
                        	
                              	8.6	
                                Installation
                                  and maintenance of the lighting installed in the
                                  Industrial Compound and
                                  which shall be installed therein in the future,
                                  including installation and
                                  maintenance of lighting in the Building and in
                                  the public areas (but
                                  excluding municipal lighting).

                              

                      

                      

                      
                        
                          
                          

                        

                        
                          
                          

                          
                            

                          

                        

                        
                          
                          

                        

                         

                      

                      
                        	
                              	8.7	
                                Maintenance
                                  of elevators and power systems in the
                                  Building.

                              

                      

                      

                      
                        	
                              	8.8	
                                Preservation
                                  and maintenance of the water pipes.

                              

                      

                      

                      
                        	
                              	8.9	
                                Maintenance
                                  of the roof and maintenance of the shell (to prevent
                                  damp).

                              

                      

                      

                      
                        	9.     	
                                It
                                  is declared that the maintenance components stated
                                  in this appendix do not
                                  restrict or derogate from the Lessor’s obligations in accordance with the
                                  rental agreement.

                              

                      

                      
                        

                        
                          	
                                   Taya
                                    Center Ltd.

                                	 	
                                  Wintegra
                                    Ltd.

                                
	 	 	 
	
                                   [Signature
                                    and Stamp}

                                	 	
                                  [Signature
                                    and Stamp]BIOMETRX,
      INC.

    

    CERTIFICATE
      OF DESIGNATION OF PREFERENCES, 

    RIGHTS
      AND LIMITATIONS

    OF

    SERIES
      A 5% CONVERTIBLE PREFERRED STOCK

    

    PURSUANT
      TO SECTION 151 OF THE 

    DELAWARE
      GENERAL CORPORATION LAW

    

    The
      undersigned, Mark Basile and Steven Kang, do hereby certify that:

    

    1.
      They
      are the President and Secretary, respectively, of bioMETRX, Inc., a Delaware
      corporation (the “Corporation”).

    

    2.
      The
      Corporation is authorized to issue 10,000,000 shares of preferred stock, none
      of
      which have been issued.

    

    3.
      The
      following resolutions were duly adopted by the Board of Directors:

    

    WHEREAS,
      the Certificate of Incorporation of the Corporation provides for a class of
      its
      authorized stock known as preferred stock, comprised of 10,000,000 shares,
      $.01
      par value per share, issuable from time to time in one or more
      series;

    

    WHEREAS,
      the Board of Directors of the Corporation is authorized to fix the dividend
      rights, dividend rate, voting rights, conversion rights, rights and terms of
      redemption and liquidation preferences of any wholly unissued series of
      preferred stock and the number of shares constituting any series and the
      designation thereof, of any of them; and

    

    WHEREAS,
      it is the desire of the Board of Directors of the Corporation, pursuant to
      its
      authority as aforesaid, to fix the rights, preferences, restrictions and other
      matters relating to a series of the preferred stock, which shall consist of,
      except as otherwise set forth in the Purchase Agreement, up to 300,000 shares
      of
      the preferred stock which the corporation has the authority to issue, as
      follows:

    

    NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
      for
      the issuance of a series of preferred stock for cash or exchange of other
      securities, rights or property and does hereby fix and determine the rights,
      preferences, restrictions and other matters relating to such series of preferred
      stock as follows:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    TERMS
      OF PREFERRED STOCK

    

    Section
      1.    Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Purchase Agreement shall have the meanings given such terms in the Purchase
      Agreement. For the purposes hereof, the following terms shall have the following
      meanings:

    

    “Alternate
      Consideration”
shall
      have the meaning set forth in Section 7(e).

     

    “Bankruptcy
      Event”
means
      any of the following events: (a) the Corporation or any Significant Subsidiary
      (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences
      a
      case or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Corporation or any Significant
      Subsidiary thereof; (b) there is commenced against the Corporation or any
      Significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Corporation or any Significant
      Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief
      or other order approving any such case or proceeding is entered; (d) the
      Corporation or any Significant Subsidiary thereof suffers any appointment of
      any
      custodian or the like for it or any substantial part of its property that is
      not
      discharged or stayed within 60 calendar days after such appointment; (e) the
      Corporation or any Significant Subsidiary thereof makes a general assignment
      for
      the benefit of creditors; (f) the Corporation or any Significant Subsidiary
      thereof calls a meeting of its creditors with a view to arranging a composition,
      adjustment or restructuring of its debts; or (g) the Corporation or any
      Significant Subsidiary thereof, by any act or failure to act, expressly
      indicates its consent to, approval of or acquiescence in any of the foregoing
      or
      takes any corporate or other action for the purpose of effecting any of the
      foregoing.

    

    “Base
      Conversion Price”
shall
      have the meaning set forth in Section 7(b).

    

    “Business
      Day”
means
      any day except Saturday, Sunday, any day which shall be a federal legal holiday
      in the United States or any day on which banking institutions in the State
      of
      New York are authorized or required by law or other governmental action to
      close.

    

    “Buy-In”
shall
      have the meaning set forth in Section 6(e)(iii).

    

    “Change
      of Control Transaction”
means
      the occurrence after the date hereof of any of (i) an acquisition after the
      date
      hereof by an individual, legal entity or “group” (as described in Rule
      13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether
      through legal or beneficial ownership of capital stock of the Corporation,
      by
      contract or otherwise) of in excess of 33% of the voting securities of the
      Corporation (other than by means of conversion or exercise of Preferred Stock
      and the Securities issued together with the Preferred Stock), or (ii) the
      Corporation merges into or consolidates with any other Person, or any Person
      merges into or consolidates with the Corporation and, after giving effect to
      such transaction, the stockholders of the Corporation immediately prior to
      such
      transaction own less than 66% of the aggregate voting power of the Corporation
      or the successor entity of such transaction, or (iii) the Corporation sells
      or
      transfers all or substantially all of its assets to another Person and the
      stockholders of the Corporation immediately prior to such transaction own less
      than 66% of the aggregate voting power of the acquiring entity immediately
      after
      the transaction, or (iv) a replacement at one time or within a one year period
      of more than one-half of the members of the Corporation’s board of directors
      which is not approved by a majority of those individuals who are members of
      the
      board of directors on the date hereof (or by those individuals who are serving
      as members of the board of directors on any date whose nomination to the board
      of directors was approved by a majority of the members of the board of directors
      who are members on the date hereof), or (v) the execution by the Corporation
      of
      an agreement to which the Corporation is a party or by which it is bound,
      providing for any of the events set forth in clauses (i) through (iv)
      above.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto and all conditions precedent to
      (i)
      the Holders’ obligations to pay the Subscription Amount and (ii) the
      Corporation’s obligations to deliver the Securities have been satisfied or
      waived.

    

    “Commission”
means
      the Securities and Exchange Commission.

    

    “Common
      Stock”
means
      the Corporation’s common stock, no par value per share, and stock of any other
      class of securities into which such securities may hereafter be reclassified
      or
      changed into.

    

    “Common
      Stock Equivalents”
means
      any securities of the Corporation or the Subsidiaries which would entitle the
      holder thereof to acquire at any time Common Stock, including, without
      limitation, any debt, preferred stock, rights, options, warrants or other
      instrument that is at any time convertible into or exchangeable for, or
      otherwise entitles the holder thereof to receive, Common Stock.

    

    “Conversion
      Amount”
means
      the sum of the Stated Value at issue.

    

    “Conversion
      Date”
shall
      have the meaning set forth in Section 6(a).

    

    “Conversion
      Price”
shall
      have the meaning set forth in Section 6(b). 

    

    “Conversion
      Shares”
means,
      collectively, the shares of Common Stock issuable upon conversion of the shares
      of Preferred Stock in accordance with the terms hereof.

    

    “Conversion
      Shares Registration Statement”
means
      a
      registration statement that registers the resale of all Conversion Shares of
      the
      Holder, who shall be named as a “selling stockholder” therein, and meets the
      requirements of the Registration Rights Agreement.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Dilutive
      Issuance”
shall
      have the meaning set forth in Section 7(b).

    

    “Dilutive
      Issuance Notice”
shall
      have the meaning set forth in Section 7(b).

    

    “Dividend
      Payment Date”
shall
      have the meaning set forth in Section 3(a).

     

    “Dividend
      Share Amount”
shall
      have the meaning set forth in Section 3(a).

    

    “Effective
      Date”
means
      the date that the Conversion Shares Registration Statement is declared effective
      by the Commission.

    

    “Equity
      Conditions”
means,
      during the period in question, (i)
      the
      Corporation shall have duly honored all conversions scheduled to occur or
      occurring by virtue of one or more Notices of Conversion of the Holder, if
      any,
      on or prior to the dates so requested or required, (ii) the Corporation shall
      have paid all liquidated damages and other amounts owing to the Holder in
      respect of the Preferred Stock, (iii)
      there is an effective Conversion Shares Registration Statement pursuant to
      which
      the Holder is permitted to utilize the prospectus thereunder to resell all
      of
      the shares of Common Stock issuable pursuant to the Transaction Documents (and
      the Corporation believes, in good faith, that such effectiveness will continue
      uninterrupted for the foreseeable future), (iv) the Common Stock is trading
      on a
      Trading Market and all of the shares issuable pursuant to the Transaction
      Documents are listed for trading on such Trading Market (and the Corporation
      believes, in good faith, that trading of the Common Stock on a Trading Market
      will continue uninterrupted for the foreseeable future), (v) there is a
      sufficient number of authorized, but unissued and otherwise unreserved, shares
      of Common Stock for the issuance of all of the shares of Common Stock issuable
      pursuant to the Transaction Documents, (vi) there is no existing Triggering
      Event or no existing event which, with the passage of time or the giving of
      notice, would constitute a Triggering Event, (vii) the issuance of the shares
      in
      question to the Holder would not violate the limitations set forth in Section
      6(c) herein, (viii)
      there has been no public announcement of a pending or proposed Fundamental
      Transaction or Change of Control Transaction that has not been consummated
      and
      (ix) no Holder is in possession of any information furnished by the Corporation
      that constitutes, or may constitute, material non-public
      information.

    

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

    

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Corporation pursuant to any stock or option plan duly adopted
      by a majority of the non-employee members of the Board of Directors of the
      Corporation or a majority of the members of a committee of non-employee
      directors established for such purpose, (b) securities upon the exercise of
      or
      conversion of any securities issued hereunder and/or other securities
      exercisable or exchangeable for or convertible into shares of Common Stock
      issued and outstanding on the date of the Purchase Agreement, provided that
      such
      securities have not been amended since the date of the Purchase Agreement to
      increase the number of such securities or to decrease the exercise or conversion
      price of any such securities, (c) securities issued pursuant to acquisitions
      or
      strategic transactions approved by a majority of the disinterested directors,
      provided that any such issuance shall only be to a Person which is, itself
      or
      through its subsidiaries, an operating company in a business synergistic with
      the business of the Corporation and shall provide to the Corporation additional
      benefits in addition to the investment of funds, but shall not include a
      transaction in which the Corporation is issuing securities primarily for the
      purpose of raising capital or to an entity whose primary business is investing
      in securities and (d) securities issued pursuant to the Second
      Closing.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Forced
      Conversion Amount”
means
      the sum of (i) 100% of the aggregate Stated Value then outstanding, (ii) accrued
      but unpaid dividends and (iii) all liquidated damages and other amounts due
      in
      respect of the Preferred Stock.

    

    “Forced
      Conversion Date”
shall
      have the meaning set forth in Section 8(a).

    

    “Forced
      Conversion Notice”
shall
      have the meaning set forth in Section 8(a).

    

    “Forced
      Conversion Notice Date”
shall
      have the meaning set forth in Section 8(a).

    

    “Fundamental
      Transaction”
shall
      have the meaning set forth in Section 7(e).

    

    “Holder”
shall
      have the meaning given such term in Section 2.

    

    “Junior
      Securities”
means
      the Common Stock and all other Common Stock Equivalents of the Corporation
      other
      than those securities which are explicitly senior or pari passu
      to the
      Preferred Stock in dividend rights or liquidation preference.

    

    “Liquidation”
shall
      have the meaning set forth in Section 5.

    

    “New
      York Courts”
shall
      have the meaning set forth in Section 11(d).

    

    “Notice
      of Conversion”
shall
      have the meaning set forth in Section 6(a).

    

    “Original
      Issue Date”
means
      the date of the first issuance of any shares of the Preferred Stock regardless
      of the number of transfers of any particular shares of Preferred Stock and
      regardless of the number of certificates which may be issued to evidence such
      Preferred Stock.

    

    “Permitted
      Indebtedness”
means
      (a) the Indebtedness existing on the Original Issue Date and set forth on
Schedule
      3.1(aa)
      attached
      to the Purchase Agreement and (b) lease obligations and purchase money
      indebtedness of up to $500,000, in the aggregate, incurred in connection with
      the acquisition of capital assets and lease obligations with respect to newly
      acquired or leased assets.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “Permitted
      Lien”
means
      the individual and collective reference to the following: (a) Liens for taxes,
      assessments and other governmental charges or levies not yet due or Liens for
      taxes, assessments and other governmental charges or levies being contested
      in
      good faith and by appropriate proceedings for which adequate reserves (in the
      good faith judgment of the management of the Corporation) have been established
      in accordance with GAAP; (b) Liens imposed by law which were incurred in the
      ordinary course of the Corporation’s business, such as carriers’, warehousemen’s
      and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens
      arising in the ordinary course of the Corporation’s business, and which (x) do
      not individually or in the aggregate materially detract from the value of such
      property or assets or materially impair the use thereof in the operation of
      the
      business of the Corporation and its consolidated Subsidiaries or (y) which
      are
      being contested in good faith by appropriate proceedings, which proceedings
      have
      the effect of preventing for the foreseeable future the forfeiture or sale
      of
      the property or asset subject to such Lien; and (c) Liens incurred in connection
      with Permitted Indebtedness under clause (b) thereunder, provided that such
      Liens are not secured by assets of the Corporation or its Subsidiaries other
      than the assets so acquired or leased.

     

    “Preferred
      Stock”
shall
      have the meaning set forth in Section 2.

    

    “Purchase
      Agreement”
means
      the Securities Purchase Agreement, dated as of the Original Issue Date, to
      which
      the Corporation and the original Holders are parties, as amended, modified
      or
      supplemented from time to time in accordance with its terms.

    

    “Redemption
      Amount”
means,
      for each share of Preferred Stock, 120% of the original purchase price of the
      Preferred Stock.

    

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated as of the date of the Purchase
      Agreement, to which the Corporation and the original Holder are parties, as
      amended, modified or supplemented from time to time in accordance with its
      terms.

    

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

    

    “Share
      Delivery Date”
shall
      have the meaning set forth in Section 6(e).

    

    “Stated
      Value”
shall
      have the meaning set forth in Section 2.

    

    “Subscription
      Amount”
means,
      as to each Purchaser, the amount in United States Dollars and in immediately
      available funds to be paid for the Preferred Stock purchased pursuant to the
      Purchase Agreement as specified below such Purchaser’s name on the signature
      page of the Purchase Agreement and next to the heading “Subscription
      Amount.”

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Subsidiary”
shall
      have the meaning set forth in the Purchase Agreement.

    

    “Threshold
      Period”
shall
      have the meaning set forth in Section 8(a). 

    

    “Trading
      Day”
means
      a
      day on which the principal Trading Market is open for business.

    

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the Nasdaq
      Capital Market, the Nasdaq National Market, the New York Stock Exchange or
      the
      OTC Bulletin Board.

    

    “Transaction
      Documents”
shall
      have the meaning set forth in the Purchase Agreement.

    

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted for trading as reported by Bloomberg L.P. (based on a
      Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
      time)); (b) if the OTC Bulletin Board is not a Trading Market, the volume
      weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
      quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
      are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
      similar organization or agency succeeding to its functions of reporting prices),
      the most recent bid price per share of the Common Stock so reported; or (d)
      in
      all other cases, the fair market value of a share of Common Stock as determined
      by an independent appraiser selected in good faith by the Purchasers and
      reasonably acceptable to the Corporation. 

    

    Section
      2.    Designation,
      Amount and Par Value.
      The
      series of preferred stock shall be designated as its Series A 5% Convertible
      Preferred Stock (the “Preferred
      Stock”)
      and
      the number of shares so designated shall be up to 300,000 (which shall not
      be
      subject to increase without the written consent of all of the holders of the
      Preferred Stock (each, a “Holder”
and
      collectively, the “Holders”)).
      Each
      share of Preferred Stock shall have a par value of $.01 per share and a stated
      value equal to $10.00, subject to increase set forth in Section 3(a) below
      (the
“Stated
      Value”).

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Section
      3.    Dividends.

    

    a)    Dividends
      in Cash or in Kind.
      Holders
      shall be entitled to receive, and the Corporation shall pay, cumulative
      dividends at the rate per share (as a percentage of the Stated Value per share)
      of 5% per annum (subject to increase pursuant to Section 9(b)),
      payable
      quarterly after the Original Issue Date and on each Conversion Date (except
      that
      if such date is not a Trading Day, the payment date shall be the next succeeding
      Trading Day) (each such date, a “Dividend
      Payment Date”)
      in
      cash or duly authorized, validly issued, fully paid and non-assessable shares
      of
      Common Stock as set forth in this Section 3(a) or a combination thereof (the
      amount to be paid in shares of Common Stock, the “Dividend
      Share Amount”).
      The
      Company shall issue the first year’s dividend to the Holder in shares of Common
      Stock at the Closing Date. The form of dividend payments to each Holder shall
      be
      determined in the following order of priority: (i) if funds are legally
      available for the payment of dividends and the Equity Conditions have not been
      met during the 20 consecutive Trading Days immediately prior to the applicable
      Dividend Payment Date, in cash only; (ii) if funds are legally available for
      the
      payment of dividends and the Equity Conditions have been met during the 20
      consecutive Trading Days immediately prior to the applicable Dividend Payment
      Date, at the sole election of the Corporation, in cash or shares of Common
      Stock
      which shall be valued solely for such purpose at 90% of the average of the
      VWAPs
      for the 20 consecutive Trading Days ending on the Trading Day that is
      immediately prior to the Dividend Payment Date; (iii) if funds are not legally
      available for the payment of dividends and the Equity Conditions have been
      met
      during the 20 consecutive Trading Days immediately prior to the applicable
      Dividend Payment Date, in shares of Common Stock which shall be valued solely
      for such purpose at 90% of the average of the VWAPs for the 20 consecutive
      Trading Days ending on the Trading Day that is immediately prior to the Dividend
      Payment Date; (iv) if funds are not legally available for the payment of
      dividends and the Equity Condition relating to an effective Conversion Shares
      Registration Statement has been waived by such Holder, as to such Holder only,
      in unregistered shares of Common Stock which shall be valued solely for such
      purpose at 90% of the average of the VWAPs for the 20 consecutive Trading Days
      ending on the Trading Day that is immediately prior to the Dividend Payment
      Date; and (v) if funds are not legally available for the payment of dividends
      and the Equity Conditions have not been met during the 20 consecutive Trading
      Days immediately prior to the applicable Dividend Payment Date, then, at the
      election of such Holder, such dividends shall accrue to the next Dividend
      Payment Date or shall be accreted to, and increase, the outstanding Stated
      Value. The Holders shall have the same rights and remedies with respect to
      the
      delivery of any such shares as if such shares were being issued pursuant to
      Section 6. On the Closing Date, the Corporation shall have notified the Holders
      whether or not it may legally pay cash dividends as of the Closing Date. The
      Corporation shall promptly notify the Holders at any time the Corporation shall
      become able or unable, as the case may be, to legally pay cash dividends. If
      at
      any time the Corporation has the right to pay dividends in cash or Common Stock,
      the Corporation must provide the Holder with at least 20 Trading Days’ notice of
      its election to pay a regularly scheduled dividend in Common Stock (the
      Corporation may indicate in such notice that the election contained in such
      notice shall continue for later periods until revised by a subsequent notice).
      Dividends on the Preferred Stock shall be calculated on the basis of a 360-day
      year, shall accrue daily commencing on the Original Issue Date, and shall be
      deemed to accrue from such date whether or not earned or declared and whether
      or
      not there are profits, surplus or other funds of the Corporation legally
      available for the payment of dividends. Except as otherwise provided herein,
      if
      at any time the Corporation pays dividends partially in cash and partially
      in
      shares of Common Stock, then such payment shall be distributed ratably among
      the
      Holders based upon the number of shares of Preferred Stock held by each Holder
      on such Dividend Payment Date. Any dividends, whether paid in cash or shares
      of
      Common Stock, that are not paid within 3 Trading Days following a Dividend
      Payment Date shall continue to accrue and shall entail a late fee, which must
      be
      paid in cash, at the rate of 18% per annum or the lesser rate permitted by
      applicable law (such fees to accrue daily from the Dividend Payment Date through
      and including the date of payment). If at any time the Corporation delivers
      a
      notice to the Holders of its election to pay the dividends in shares of Common
      Stock, the Corporation shall timely file a prospectus supplement pursuant to
      Rule 424 disclosing such election.

     

    
      
         

      

      
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    b)    So
      long
      as any Preferred Stock shall remain outstanding, neither the Corporation nor
      any
      Subsidiary thereof shall redeem, purchase or otherwise acquire directly or
      indirectly any Junior Securities except as expressly permitted by Section
      9(a)(ix). So long as any Preferred Stock shall remain outstanding, neither
      the
      Corporation nor any Subsidiary thereof shall directly or indirectly pay or
      declare any dividend or make any distribution upon (other than a dividend or
      distribution described in Section 6 or dividends due and paid in the ordinary
      course on preferred stock of the Corporation at such times when the Corporation
      is in compliance with its payment and other obligations hereunder), nor shall
      any distribution be made in respect of, any Junior Securities as long as any
      dividends due on the Preferred Stock remain unpaid, nor shall any monies be
      set
      aside for or applied to the purchase or redemption (through a sinking fund
      or
      otherwise) of any Junior Securities or shares pari passu
      with the
      Preferred Stock.

    

    c)    The
      Corporation acknowledges and agrees that the capital of the Corporation (as
      such
      term is used in Section 154 of the Delaware General Corporation Law) in respect
      of the Preferred Stock and any future issuances of the Corporation’s capital
      stock shall be equal to the aggregate par value of such Preferred Stock or
      capital stock, as the case may be, and that, on or after the date of the
      Purchase Agreement, it shall not increase the capital of the Corporation with
      respect to any shares of the Corporation’s capital stock issued and outstanding
      on such date. The Corporation also acknowledges and agrees that it shall not
      create any special reserves under Section 151 of the Delaware General
      Corporation Law without the prior written consent of each Holder.

    

    Section
      4.    Voting
      Rights.
      In
      addition to any class voting rights provided by law, the Holders of the
      Preferred Stock shall have the right to vote together with the holders of Common
      Stock as a single class on any matter on which the holders of Common Stock
      are
      entitled to vote (including the election of directors). With respect to the
      voting rights of the Holders of the Preferred Stock pursuant to the foregoing
      sentence, each Holder of Preferred Stock shall be entitled to one vote for
      each
      share of Common Stock that would be issuable to such Holder upon the conversion
      at the then Conversion Price of all of the shares of Preferred Stock held by
      such Holder on the record date for the determination of shareholders entitled
      to
      vote, provided that a Holder who is subject to the beneficial ownership
      limitation under Section 6(c) hereof shall have the right to vote only those
      shares of Preferred Stock as to which the Holder shall be the beneficial owner,
      as determined under Section 6(c), as of the record date for the matter to be
      voted upon.

     

    
      
         

      

      
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    Section
      5.    Liquidation.
      Upon
      any liquidation, dissolution or winding-up of the Corporation, whether voluntary
      or involuntary (a “Liquidation”),
      the
      Holders shall be entitled to receive out of the assets, whether capital or
      surplus, of the Corporation an amount equal to the Stated Value, plus any
      accrued and unpaid dividends thereon and any other fees or partial liquidated
      damages owing thereon, for each share of Preferred Stock before any distribution
      or payment shall be made to the holders of any Junior Securities, and if the
      assets of the Corporation shall be insufficient to pay in full such amounts,
      then the entire assets to be distributed to the Holders shall be ratably
      distributed among the Holders in accordance with the respective amounts that
      would be payable on such shares if all amounts payable thereon were paid in
      full. A Fundamental Transaction or Change of Control Transaction shall not
      be
      deemed a Liquidation. The Corporation shall mail written notice of any such
      Liquidation, not less than 45 days prior to the payment date stated therein,
      to
      each Holder.

    

    Section
      6.    Conversion.

    

    a)    Conversions
      at Option of Holder.
      Each
      share of Preferred Stock shall be convertible at the option of the Holder,
      at
      any time and from time to time from and after the Original Issue Date into
      that
      number of shares of Common Stock (subject to the limitations set forth in
      Section 6(c)) determined by dividing the Stated Value of such share of Preferred
      Stock by the Conversion Price. Holders shall effect conversions by providing
      the
      Corporation with the form of conversion notice attached hereto as Annex
      A
      (a
“Notice
      of Conversion”).
      Each
      Notice of Conversion shall specify the number of shares of Preferred Stock
      to be
      converted, the number of shares of Preferred Stock owned prior to the conversion
      at issue, the number of shares of Preferred Stock owned subsequent to the
      conversion at issue and the date on which such conversion is to be effected,
      which date may not be prior to the date the Holder delivers by facsimile such
      Notice of Conversion to the Corporation (the “Conversion
      Date”).
      If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the date that such Notice of Conversion to the Corporation is deemed
      delivered hereunder. The calculations and entries set forth in the Notice of
      Conversion shall control in the absence of manifest or mathematical error.
      To
      effect conversions, as the case may be, of shares of Preferred Stock, a Holder
      shall not be required to surrender the certificate(s) representing such shares
      of Preferred Stock to the Corporation unless all of the shares of Preferred
      Stock represented thereby are so converted, in which case the Holder shall
      deliver the certificate representing such shares of Preferred Stock promptly
      following the Conversion Date at issue. Shares of Preferred Stock converted
      into
      Common Stock or redeemed in accordance with the terms hereof shall be canceled
      and shall not be reissued.

    

    b)    Conversion
      Price.
      The
      conversion price for the Preferred Stock shall equal $1.501,
      subject
      to adjustment herein (the “Conversion
      Price”).

    
       

      
        

      

      1
        50% of
        the 5-day average closing bid price prior to the Closing Date, but not less
        than
        $1.50.

       

      
        
           

        

        
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    c)    Beneficial
      Ownership Limitation. The
      Corporation shall not effect any conversion of the Preferred Stock, and a Holder
      shall not have the right to convert any portion of the Preferred Stock, to
      the
      extent that, after giving effect to the conversion set forth on the applicable
      Notice of Conversion, such Holder (together with such Holder’s Affiliates, and
      any other person or entity acting as a group together with such Holder or any
      of
      such Holder’s Affiliates) would beneficially own in excess of the Beneficial
      Ownership Limitation (as defined below).  For purposes of the foregoing
      sentence, the number of shares of Common Stock beneficially owned by such Holder
      and its Affiliates shall include the number of shares of Common Stock issuable
      upon conversion of the Preferred Stock with respect to which such determination
      is being made, but shall exclude the number of shares of Common Stock which
      are
      issuable upon (A) conversion of the remaining, unconverted Stated Value of
      Preferred Stock beneficially owned by such Holder or any of its Affiliates
      and
      (B) exercise or conversion of the unexercised or unconverted portion of any
      other securities of the Corporation subject to a limitation on conversion or
      exercise analogous to the limitation contained herein (including the Warrants)
      beneficially owned by such Holder or any of its Affiliates.  Except as set
      forth in the preceding sentence, for purposes of this Section 6(c), beneficial
      ownership shall be calculated in accordance with Section 13(d) of the Exchange
      Act and the rules and regulations promulgated thereunder. To the extent that
      the
      limitation contained in this Section 6(c) applies, the determination of whether
      the Preferred Stock is convertible (in relation to other securities owned by
      such Holder together with any Affiliates) and of how many shares of Preferred
      Stock are convertible shall be in the sole discretion of such Holder, and the
      submission of a Notice of Conversion shall be deemed to be such Holder’s
      determination of whether the shares of Preferred Stock may be converted (in
      relation to other securities owned by such Holder together with any Affiliates)
      and how many shares of the Preferred Stock are convertible, in each case subject
      to such aggregate percentage limitations. To ensure compliance with this
      restriction, each Holder will be deemed to represent to the Corporation each
      time it delivers a Notice of Conversion that such Notice of Conversion has
      not
      violated the restrictions set forth in this paragraph and the Corporation shall
      have no obligation to verify or confirm the accuracy of such determination.
      In
      addition, a determination as to any group status as contemplated above shall
      be
      determined in accordance with Section 13(d) of the Exchange Act and
      the
      rules and regulations promulgated thereunder.
      For
      purposes of this Section 6(c), in determining the number of outstanding shares
      of Common Stock, a Holder may rely on the number of outstanding shares of Common
      Stock as stated in the most recent of the following: (A) the Corporation’s most
      recent Form 10-QSB or Form 10-KSB, as the case may be, (B) a more recent public
      announcement by the Corporation or (C) a more recent notice by the Corporation
      or the Corporation’s transfer agent setting forth the number of shares of Common
      Stock outstanding.  Upon the written or oral request of a Holder, the
      Corporation shall within two Trading Days confirm orally and in writing to
      such
      Holder the number of shares of Common Stock then outstanding.  In any case,
      the number of outstanding shares of Common Stock shall be determined after
      giving effect to the conversion or exercise of securities of the Corporation,
      including the Preferred Stock, by such Holder or its Affiliates since the date
      as of which such number of outstanding shares of Common Stock was reported.
      The
“Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the
      Common Stock outstanding immediately after giving effect to the issuance of
      shares of Common Stock issuable upon conversion of Preferred Stock held by
      the
      Holder. The Beneficial Ownership Limitation provisions of this Section 6(c)
      may
      be waived by such Holder, at the election of such Holder, upon not less than
      61
      days’ prior notice to the Corporation, to change the Beneficial Ownership
      Limitation to 9.99% of the number of shares of the Common Stock outstanding
      immediately after giving effect to the issuance of shares of Common Stock upon
      conversion of Preferred Stock held by the Holder and the provisions of this
      Section 6(c) shall continue to apply. Upon such a change by a Holder of the
      Beneficial Ownership Limitation from such 4.99% limitation to such 9.99%
      limitation, the Beneficial Ownership Limitation shall not be further waived
      by
      such Holder. The provisions of this paragraph shall be construed and implemented
      in a manner otherwise than in strict conformity with the terms of this Section
      6(c) to correct this paragraph (or any portion hereof) which may be defective
      or
      inconsistent with the intended Beneficial Ownership Limitation herein contained
      or to make changes or supplements necessary or desirable to properly give effect
      to such limitation.
      The
      limitations contained in this paragraph shall apply to a successor holder of
      Preferred Stock.

     

    
      
         

      

      
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    d)    [RESERVED]
      

     

    e)    Mechanics
      of Conversion

    

    i.    Delivery
      of Certificate Upon Conversion.
      Not
      later than 3 Trading Days after each Conversion Date (the “Share
      Delivery Date”),
      the
      Corporation shall deliver, or cause to be delivered, to the Holder (A) a
      certificate or certificates which, on or after the Effective Date, shall be
      free
      of restrictive legends and trading restrictions (other than those which may
      then
      be required by the Purchase Agreement) representing the number of shares of
      Common Stock being acquired upon the conversion of shares of Preferred Stock,
      and (B) a bank check in the amount of accrued and unpaid dividends (if the
      Corporation has elected or is required to pay accrued dividends in cash). On
      or
      after the Effective Date, the Corporation shall, upon request of the Holder,
      use
      its best efforts to deliver any certificate or certificates required to be
      delivered by the Corporation under this Section 6 electronically through the
      Depository Trust Company or another established clearing corporation performing
      similar functions. If in the case of any Notice of Conversion such certificate
      or certificates are not delivered to or as directed by the applicable Holder
      by
      the third Trading Day after the Conversion Date, the Holder shall be entitled
      to
      elect by written notice to the Corporation at any time on or before its receipt
      of such certificate or certificates, to rescind such Conversion Notice by
      written notice to the Corporation, in which event the Corporation shall promptly
      return to the Holder any original Preferred Stock certificate delivered to
      the
      Corporation and the Holder shall promptly return any Common Stock certificates
      representing the shares of Preferred Stock tendered for conversion to the
      Corporation.

     

    
      
         

      

      
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    ii.    Obligation
      Absolute; Partial Liquidated Damages.
      The
      Corporation’s obligation to issue and deliver the Conversion Shares upon
      conversion of Preferred Stock in accordance with the terms hereof are absolute
      and unconditional, irrespective of any action or inaction by the Holder to
      enforce the same, any waiver or consent with respect to any provision hereof,
      the recovery of any judgment against any Person or any action to enforce the
      same, or any setoff, counterclaim, recoupment, limitation or termination, or
      any
      breach or alleged breach by the Holder or any other Person of any obligation
      to
      the Corporation or any violation or alleged violation of law by the Holder
      or
      any other person, and irrespective of any other circumstance which might
      otherwise limit such obligation of the Corporation to the Holder in connection
      with the issuance of such Conversion Shares; provided,
      however,
      that
      such delivery shall not operate as a waiver by the Corporation of any such
      action that the Corporation may have against the Holder. In the event a Holder
      shall elect to convert any or all of the Stated Value of its Preferred Stock,
      the Corporation may not refuse conversion based on any claim that such Holder
      or
      any one associated or affiliated with the Holder has been engaged in any
      violation of law, agreement or for any other reason, unless an injunction from
      a
      court, on notice to Holder, restraining and/or enjoining conversion of all
      or
      part of the Preferred Stock of the Holder shall have been sought and obtained,
      and the Corporation posts a surety bond for the benefit of the Holder in the
      amount of 150% of the Stated Value of Preferred Stock which is subject to the
      injunction, which bond shall remain in effect until the completion of
      arbitration/litigation of the underlying dispute and the proceeds of which
      shall
      be payable to such Holder to the extent it obtains judgment. In the absence
      of
      such injunction, the Corporation shall issue Conversion Shares and, if
      applicable, pay cash, upon a properly noticed conversion. If the Corporation
      fails to deliver to the Holder such certificate or certificates pursuant to
      Section 6(e)(i) on the second Trading Day after the Share Delivery Date
      applicable to such conversion, the Corporation shall pay to such Holder, in
      cash, as liquidated damages and not as a penalty, for each $5,000 of Stated
      Value of Preferred Stock being converted, $50 per Trading Day (increasing to
      $100 per Trading Day on the third Trading Day and increasing to $200 per Trading
      Day on the sixth Trading Day after such damages begin to accrue) for each
      Trading Day after such second Trading Day after the Share Delivery Date until
      such certificates are delivered. Nothing herein shall limit a Holder’s right to
      pursue actual damages or declare a Triggering Event pursuant to Section 9 for
      the Corporation’s failure to deliver Conversion Shares within the period
      specified herein and such Holder shall have the right to pursue all remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief. The Exercise of any
      such rights shall not prohibit the Holder from seeking to enforce damages
      pursuant to any other Section hereof or under applicable law.

     

    iii.    Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Conversion.
      If the
      Corporation fails to deliver to the Holder such certificate or certificates
      by
      the Share Delivery Date pursuant to Section 6(e)(i), and if after such Share
      Delivery Date the Holder is required by its brokerage firm to purchase (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by such Holder of the Conversion Shares which the Holder
      was entitled to receive upon the conversion relating to such Share Delivery
      Date
      (a “Buy-In”),
      then
      the Corporation shall (A) pay in cash to the Holder (in addition to any other
      remedies available to or elected by the Holder) the amount by which (x) the
      Holder’s total purchase price (including any brokerage commissions) for the
      shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate
      number of shares of Common Stock that such Holder was entitled to receive from
      the conversion at issue multiplied by (2) the actual sale price at which the
      sell order giving rise to such purchase obligation was executed (including
      any
      brokerage commissions) and (B) at the option of the Holder, either reissue
      (if
      surrendered) the shares of Preferred Stock equal to the number of shares of
      Preferred Stock submitted for conversion or deliver to the Holder the number
      of
      shares of Common Stock that would have been issued if the Corporation had timely
      complied with its delivery requirements under Section 6(e)(i). For example,
      if
      the Holder purchases shares of Common Stock having a total purchase price of
      $11,000 to cover a Buy-In with respect to an attempted conversion of shares
      of
      Preferred Stock with respect to which the actual sale price (including any
      brokerage commissions) giving rise to such purchase obligation was a total
      of
      $10,000 under clause (A) of the immediately preceding sentence, the Corporation
      shall be required to pay the Holder $1,000. The Holder shall provide the
      Corporation written notice indicating the amounts payable to the Holder in
      respect of the Buy-In and, upon request of the Corporation, evidence of the
      amount of such loss. Nothing herein shall limit a Holder’s right to pursue any
      other remedies available to it hereunder, at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive relief with
      respect to the Corporation’s failure to timely deliver certificates representing
      shares of Common Stock upon conversion of the shares of Preferred Stock as
      required pursuant to the terms hereof.

     

    
      
         

      

      
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    iv.    Reservation
      of Shares Issuable Upon Conversion.
      The
      Corporation covenants that it will at all times reserve and keep available
      out
      of its authorized and unissued shares of Common Stock for the sole purpose
      of
      issuance upon conversion of the Preferred Stock and payment of dividends on
      the
      Preferred Stock, each as herein provided, free from preemptive rights or any
      other actual contingent purchase rights of Persons other than the Holders of
      the
      Preferred Stock, not less than such aggregate number of shares of the Common
      Stock as shall (subject to the terms and conditions in the Purchase Agreement)
      be issuable (taking into account the adjustments and restrictions of Section
      7)
      upon the conversion of all outstanding shares of Preferred Stock and payment
      of
      dividends hereunder. The Corporation covenants that all shares of Common Stock
      that shall be so issuable shall, upon issue, be duly authorized, validly issued,
      fully paid and nonassessable and, if the Conversion Shares Registration
      Statement is then effective under the Securities Act, shall be registered for
      public sale in accordance with such Conversion Shares Registration
      Statement.

    

    v.    Fractional
      Shares.
      Upon a
      conversion hereunder, the Corporation shall not be required to issue stock
      certificates representing fractions of shares of Common Stock, but may if
      otherwise permitted, make a cash payment in respect of any final fraction of
      a
      share based on the VWAP at such time. If the Corporation elects not, or is
      unable, to make such a cash payment, the Holder shall be entitled to receive,
      in
      lieu of the final fraction of a share, one whole share of Common
      Stock.

    

    vi.  Transfer
      Taxes.
      The
      issuance of certificates for shares of the Common Stock on conversion of this
      Preferred Stock shall be made without charge to the Holder hereof for any
      documentary stamp or similar taxes that may be payable in respect of the issue
      or delivery of such certificates, provided that the Corporation shall not be
      required to pay any tax that may be payable in respect of any transfer involved
      in the issuance and delivery of any such certificate upon conversion in a name
      other than that of the Holder of such shares of Preferred Stock so converted
      and
      the Corporation shall not be required to issue or deliver such certificates
      unless or until the Person or Persons requesting the issuance thereof shall
      have
      paid to the Corporation the amount of such tax or shall have established to
      the
      satisfaction of the Corporation that such tax has been paid.

    

    
      
         

      

      
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    Section
      7.    Certain
      Adjustments.

    

    a)    Stock
      Dividends and Stock Splits.
      If the
      Corporation, at any time while this Preferred Stock is outstanding: (A) pays
      a
      stock dividend or otherwise makes a distribution or distributions payable in
      shares of Common Stock on shares of Common Stock or any other Common Stock
      Equivalents (which, for avoidance of doubt, shall not include any shares of
      Common Stock issued by the Corporation upon conversion of, or payment of a
      dividend on, this Preferred Stock); (B) subdivides outstanding shares of Common
      Stock into a larger number of shares; (C) combines (including by way of a
      reverse stock split) outstanding shares of Common Stock into a smaller number
      of
      shares; or (D) issues, in the event of a reclassification of shares of the
      Common Stock, any shares of capital stock of the Corporation, then the
      Conversion Price shall be multiplied by a fraction of which the numerator shall
      be the number of shares of Common Stock (excluding any treasury shares of the
      Corporation) outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event. Any adjustment made pursuant to this Section
      7(a)
      shall become effective immediately after the record date for the determination
      of stockholders entitled to receive such dividend or distribution and shall
      become effective immediately after the effective date in the case of a
      subdivision, combination or re-classification.

     

    b)    Subsequent
      Equity Sales.
      If the
      Corporation or any Subsidiary thereof, at any time while this Preferred Stock
      is
      outstanding, sells or grants any option to purchase or sells or grants any
      right
      to reprice its securities, or otherwise disposes of or issues (or announces
      any
      sale, grant or any option to purchase or other disposition) any Common Stock
      or
      Common Stock Equivalents entitling any Person to acquire shares of Common Stock
      at an effective price per share that is lower than the then Conversion Price
      (such lower price, the “Base
      Conversion Price”
and
      such issuances collectively, a “Dilutive
      Issuance”)
      (if
      the holder of the Common Stock or Common Stock Equivalents so issued shall
      at
      any time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share that is lower than the Conversion Price, such issuance shall be deemed
      to have occurred for less than the Conversion Price on such date of the Dilutive
      Issuance), then the Conversion Price shall be reduced to equal the Base
      Conversion Price. Notwithstanding
      the foregoing, no adjustment will be made under this Section 7(b) in respect
      of
      an Exempt Issuance.
      The
      Corporation shall notify the Holder in writing, no later than the Business
      Day
      following the issuance of any Common Stock or Common Stock Equivalents subject
      to this Section 7(b), indicating therein the applicable issuance price, or
      applicable reset price, exchange price, conversion price and other pricing
      terms
      (such notice, the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Corporation provides a Dilutive
      Issuance Notice pursuant to this Section 7(b), upon the occurrence of any
      Dilutive Issuance, the Holder is entitled to receive a number of Conversion
      Shares based upon the Base Conversion Price on or after the date of such
      Dilutive Issuance, regardless of whether the Holder accurately refers to the
      Base Conversion Price in the Notice of Conversion. 

     

    
      
         

      

      
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    c)    Subsequent
      Rights Offerings.
      If the
      Corporation, at any time while this Preferred Stock is outstanding, shall issue
      rights, options or warrants to all holders of Common Stock (and not to Holders)
      entitling them to subscribe for or purchase shares of Common Stock at a price
      per share that is lower than the VWAP on the record date referenced below,
      then
      the Conversion Price shall be multiplied by a fraction of which the denominator
      shall be the number of shares of the Common Stock outstanding on the date of
      issuance of such rights or warrants plus the number of additional shares of
      Common Stock offered for subscription or purchase, and of which the numerator
      shall be the number of shares of the Common Stock outstanding on the date of
      issuance of such rights or warrants plus the number of shares which the
      aggregate offering price of the total number of shares so offered (assuming
      delivery to the Corporation in full of all consideration payable upon exercise
      of such rights, options or warrants) would purchase at such VWAP. Such
      adjustment shall be made whenever such rights or warrants are issued, and shall
      become effective immediately after the record date for the determination of
      stockholders entitled to receive such rights, options or warrants.

     

    d)    Pro
      Rata Distributions.
      If the
      Corporation, at any time while this Preferred Stock is outstanding, distributes
      to all holders of Common Stock (and not to Holders) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security (other than Common Stock, which shall
      be subject to Section 7(b)), then in each such case the Conversion Price shall
      be adjusted by multiplying such Conversion Price in effect immediately prior
      to
      the record date fixed for determination of stockholders entitled to receive
      such
      distribution by a fraction of which the denominator shall be the VWAP determined
      as of the record date mentioned above, and of which the numerator shall be
      such
      VWAP on such record date less the then fair market value at such record date
      of
      the portion of such assets, evidence of indebtedness or rights or warrants
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors of the Corporation in good faith. In either
      case the adjustments shall be described in a statement delivered to the Holder
      describing the portion of assets or evidences of indebtedness so distributed
      or
      such subscription rights applicable to one share of Common Stock. Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective immediately after the record date mentioned above.

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    e)    Fundamental
      Transaction.
      If, at
      any time while this Preferred Stock is outstanding, (A) the Corporation effects
      any merger or consolidation of the Corporation with or into another Person,
      (B)
      the Corporation effects any sale of all or substantially all of its assets
      in
      one transaction or a series of related transactions, (C) any tender offer or
      exchange offer (whether by the Corporation or another Person) is completed
      pursuant to which holders of Common Stock are permitted to tender or exchange
      their shares for other securities, cash or property, or (D) the Corporation
      effects any reclassification of the Common Stock or any compulsory share
      exchange pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property (in any such case, a
“Fundamental
      Transaction”),
      then,
      upon any subsequent conversion of this Preferred Stock, the Holder shall have
      the right to receive, for each Conversion Share that would have been issuable
      upon such conversion immediately prior to the occurrence of such Fundamental
      Transaction, the same kind and amount of securities, cash or property as it
      would have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of one share of Common Stock (the “Alternate
      Consideration”).
      For
      purposes of any such conversion, the determination of the Conversion Price
      shall
      be appropriately adjusted to apply to such Alternate Consideration based on
      the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Corporation shall apportion
      the
      Conversion Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the
      securities, cash or property to be received in a Fundamental Transaction, then
      the Holder shall be given the same choice as to the Alternate Consideration
      it
      receives upon any conversion of this Preferred Stock following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Corporation or surviving entity in such Fundamental Transaction
      shall file a new Certificate of Designation with the same terms and conditions
      and issue to the Holder new preferred stock consistent with the foregoing
      provisions and evidencing the Holder’s right to convert such preferred stock
      into Alternate Consideration. The terms of any agreement pursuant to which
      a
      Fundamental Transaction is effected shall include terms requiring any such
      successor or surviving entity to comply with the provisions of this Section
      7(e)
      and insuring that this Preferred Stock (or any such replacement security) will
      be similarly adjusted upon any subsequent transaction analogous to a Fundamental
      Transaction.

    

    f)    Calculations.
      All
      calculations under this Section 7 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      7,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      any treasury shares of the Corporation) issued and outstanding.

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    g)    Notice
      to the Holders.

    

    i.    Adjustment
      to Conversion Price.
      Whenever the Conversion Price is adjusted pursuant to any provision of this
      Section 7, the Corporation shall promptly mail to each Holder a notice setting
      forth the Conversion Price after such adjustment and setting forth a brief
      statement of the facts requiring such adjustment. If the Corporation issues
      a
      variable rate security, despite the prohibition thereon in the Purchase
      Agreement, the Corporation shall be deemed to have issued Common Stock or Common
      Stock Equivalents at the lowest possible conversion or exercise price at which
      such securities may be converted or exercised in the case of a Variable Rate
      Transaction (as defined in the Purchase Agreement).

     

    ii.    Notice
      to Allow Conversion by Holder.
      If (A)
      the Corporation shall declare a dividend (or any other distribution in whatever
      form) on the Common Stock, (B) the Corporation shall declare a special
      nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
      Corporation shall authorize the granting to all holders of the Common Stock
      of
      rights or warrants to subscribe for or purchase any shares of capital stock
      of
      any class or of any rights, (D) the approval of any stockholders of the
      Corporation shall be required in connection with any reclassification of the
      Common Stock, any consolidation or merger to which the Corporation is a party,
      any sale or transfer of all or substantially all of the assets of the
      Corporation, of any compulsory share exchange whereby the Common Stock is
      converted into other securities, cash or property or (E) the
      Corporation shall authorize the voluntary or involuntary dissolution,
      liquidation or winding up of the affairs of the Corporation, then, in each
      case,
      the Corporation shall cause to be filed at each office or agency maintained
      for
      the purpose of conversion of this Preferred Stock, and shall cause to be
delivered
      to the Holder at its last address as it shall appear upon the stock
      books of
      the
      Corporation, at least 20 calendar days prior to the applicable record or
      effective date hereinafter specified, a notice stating (x)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution, redemption, rights or warrants, or if a record is not to be taken,
      the date as of which the holders of the Common Stock of record to be entitled
      to
      such dividend, distributions, redemption, rights or warrants are to be
      determined or (y) the date on which such reclassification, consolidation,
      merger, sale, transfer or share exchange is expected to become effective or
      close, and the date as of which it is expected that holders of the Common Stock
      of record shall be entitled to exchange their shares of the Common Stock for
      securities, cash or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer or share exchange, provided that the
      failure to deliver such notice or any defect therein or in the delivery thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to convert the Conversion Amount of
      this
      Preferred Stock (or any part hereof) during the 20-day period commencing on
      the
      date of such notice through the effective date of the event triggering such
      notice. 

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    Section
      8.    Forced
      Conversion.
      Notwithstanding anything herein to the contrary, if after the Effective Date
      (i)
      the closing bid price of the Common Stock for each of any 20 consecutive Trading
      Day period, which 20 consecutive Trading Day period shall have commenced only
      after the Effective Date (“Threshold
      Period”),
      equals or exceeds $4.00 (subject to adjustment for reverse and forward stock
      splits and the like) and (ii) the daily volume for each Trading Day during
      any
      Threshold Period exceeds 150,000 shares of Common Stock per Trading Day and
      (iii) the Conversion Shares are registered pursuant to an effective Registration
      Statement, the Corporation may, within 1 Trading Day after the end of any such
      Threshold Period, deliver a written notice to all Holders (a “Forced
      Conversion Notice”
and
      the
      date such notice is delivered to the Holders, the “Forced
      Conversion Notice Date”)
      to
      cause each Holder to convert all or part of such Holder’s Preferred Stock (as
      specified in such Forced Conversion Notice) plus all accrued but unpaid
      dividends thereon and all liquidated damages and other amounts due in respect
      of
      the Preferred Stock pursuant to Section 6, it being agreed that the “Conversion
      Date” for purposes of Section 6 shall be deemed to occur on the third Trading
      Day following the Forced Conversion Notice Date (such third Trading Day, the
      “Forced
      Conversion Date”).
      The
      Corporation may not deliver a Forced Conversion Notice, and any Forced
      Conversion Notice delivered by the Corporation shall not be effective, unless
      all of the Equity Conditions have been met on each Trading Day occurring during
      the applicable Threshold Period through and including the later of the Forced
      Conversion Date and the Trading Day after the date that the Conversion Shares
      issuable pursuant to such conversion are actually delivered to the Holder
      pursuant to the Forced Conversion Notice. Any Forced Conversion Notices shall
      be
      applied ratably to all of the Holders based on each Holder’s initial purchases
      of Preferred Stock hereunder, provided that any voluntary conversions by a
      Holder shall be applied against such Holder’s pro-rata allocation, thereby
      decreasing the aggregate amount forcibly converted hereunder if less than all
      shares of the Preferred Stock are forcibly converted. For purposes of
      clarification, a Forced Conversion shall be subject to all of the provisions
      of
      Section 6, including, without limitation, the provisions requiring payment
      of
      liquidated damages and limitations on conversions.

    

    Section
      9.    Redemption.
      The
      Company shall have the right to redeem any and/or all of the Preferred Stock
      at
      a rate of 120% of the stated value by providing written 10 day notice to the
      Holders. The Holders shall have the right to convert their Preferred Stock
      during the period beginning on the date of notice of redemption and expiring
      the
      date immediately preceding the redemption date set forth in the redemption
      notice.

     

    Section
      10.    Negative
      Covenants.
      So long
      as any shares of Preferred Stock are outstanding, the Corporation shall not,
      and
      shall not permit any of its Subsidiaries to, without the written consent of
      the
      Holders, which consent shall not be unreasonably withheld, directly or
      indirectly:

    

    a)    other
      than Permitted Indebtedness, enter into, create, incur, assume, guarantee or
      suffer to exist any indebtedness for borrowed money of any kind, including
      but
      not limited to, a guarantee, on or with respect to any of its property or assets
      now owned or hereafter acquired or any interest therein or any income or profits
      therefrom;

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    b)    other
      than Permitted Liens, enter into, create, incur, assume or suffer to exist
      any
      Liens of any kind, on or with respect to any of its property or assets now
      owned
      or hereafter acquired or any interest therein or any income or profits
      therefrom;

    

    c)    amend
      its
      certificate of incorporation, bylaws or other charter documents so as to
      materially and adversely affect any rights of any Holder;

    

    d)    repay,
      repurchase or offer to repay, repurchase or otherwise acquire more than a
de minimis
      number
      of shares of its Common Stock, Common Stock Equivalents or Junior Securities,
      except for the Conversion Shares to the extent permitted or required under
      the
      Transaction Documents or as otherwise permitted by the Transaction Documents;
      

    

    e)    enter
      into any agreement or understanding with respect to any of the
      foregoing;
      or

    

    f)    pay
      cash
      dividends or distributions on Junior Securities of the Corporation.

    

    Section
      11.    Miscellaneous.
      

    

    a)    Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holder
      hereunder including, without limitation, any Notice of Conversion, shall be
      in
      writing and delivered personally, by facsimile, or sent by a nationally
      recognized overnight courier service, addressed to the Corporation, at the
      address set forth above, facsimile number (516) 937-2880, Attn: Mark
      Basile, or
      such
      other facsimile number or address as the Corporation may specify for such
      purposes by notice to the Holders delivered in accordance with this Section
      11.
      Any and all notices or other communications or deliveries to be provided by
      the
      Corporation hereunder shall be in writing and delivered personally, by
      facsimile, or sent by a nationally recognized overnight courier service
      addressed to each Holder at the facsimile number or address of such Holder
      appearing on the books of the Corporation, or if no such facsimile number or
      address appears on the books of the Corporation, at the principal place of
      business of the Holder. Any notice or other communication or deliveries
      hereunder shall be deemed given and effective on the earliest of (i) the date
      of
      transmission, if such notice or communication is delivered via facsimile at
      the
      facsimile number specified in this Section 11 prior to 5:30 p.m. (New York
      City
      time) on any date, (ii) the date immediately following the date of transmission,
      if such notice or communication is delivered via facsimile at the facsimile
      number specified in this Section 11 between 5:30 p.m. and 11:59 p.m. (New York
      City time) on any date, (iii) the second Business Day following the date of
      mailing, if sent by nationally recognized overnight courier service, or (iv)
      upon actual receipt by the party to whom such notice is required to be
      given.

     

    b)    Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Certificate of Designation
      shall alter or impair the obligation of the Corporation, which is absolute
      and
      unconditional, to pay liquidated damages, accrued dividends and accrued
      interest, as applicable, on the shares of Preferred Stock at the time, place,
      and rate, and in the coin or currency, herein prescribed. 

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    c)    Lost
      or Mutilated Preferred Stock Certificate.
      If a
      Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or
      destroyed, the Corporation shall execute and deliver, in exchange and
      substitution for and upon cancellation of a mutilated certificate, or in lieu
      of
      or in substitution for a lost, stolen or destroyed certificate, a new
      certificate for the shares of Preferred Stock so mutilated, lost, stolen or
      destroyed, but only upon receipt of evidence of such loss, theft or destruction
      of such certificate, and of the ownership hereof reasonably satisfactory to
      the
      Corporation.

    

    d)    Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Certificate of Designation shall be governed by and construed and
      enforced in accordance with the internal laws of the State of Utah, without
      regard to the principles of conflict of laws thereof. Each party agrees that
      all
      legal proceedings concerning the interpretation, enforcement and defense of
      the
      transactions contemplated by any of the Transaction Documents (whether brought
      against a party hereto or its respective Affiliates, directors, officers,
      shareholders, employees or agents) shall be commenced in the state and federal
      courts sitting in the City of New York, Borough of Manhattan (the “New
      York Courts”).
      Each
      party hereto hereby irrevocably submits to the exclusive jurisdiction of the
      New
      York Courts for the adjudication of any dispute hereunder or in connection
      herewith or with any transaction contemplated hereby or discussed herein
      (including with respect to the enforcement of any of the Transaction Documents),
      and hereby irrevocably waives, and agrees not to assert in any suit, action
      or
      proceeding, any claim that it is not personally subject to the jurisdiction
      of
      such New York Courts, or such New York Courts are improper or inconvenient
      venue
      for such proceeding. Each party hereby irrevocably waives personal service
      of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof via registered or certified mail or
      overnight delivery (with evidence of delivery) to such party at the address
      in
      effect for notices to it under this Certificate of Designation and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any other manner permitted by applicable law. Each party
      hereto hereby irrevocably waives, to the fullest extent permitted by applicable
      law, any and all right to trial by jury in any legal proceeding arising out
      of
      or relating to this Certificate of Designation or the transactions contemplated
      hereby. If either party shall commence an action or proceeding to enforce any
      provisions of this Certificate of Designation, then the prevailing party in
      such
      action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation
      and
      prosecution of such action or proceeding.

     

    e)    Waiver.
      Any
      waiver by the Corporation or the Holder of a breach of any provision of this
      Certificate of Designation shall not operate as or be construed to be a waiver
      of any other breach of such provision or of any breach of any other provision
      of
      this Certificate of Designation. The failure of the Corporation or the Holder
      to
      insist upon strict adherence to any term of this Certificate of Designation
      on
      one or more occasions shall not be considered a waiver or deprive that party
      of
      the right thereafter to insist upon strict adherence to that term or any other
      term of this Certificate of Designation. Any waiver by the Corporation or the
      Holder must be in writing.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    f)    Severability.
      If any
      provision of this Certificate of Designation is invalid, illegal or
      unenforceable, the balance of this Certificate of Designation shall remain
      in
      effect, and if any provision is inapplicable to any Person or circumstance,
      it
      shall nevertheless remain applicable to all other Persons and circumstances.
      If
      it shall be found that any interest or other amount deemed interest due
      hereunder violates the applicable law governing usury, the applicable rate
      of
      interest due hereunder shall automatically be lowered to equal the maximum
      rate
      of interest permitted under applicable law. 

    

    g)    Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

    

    h)    Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Certificate of Designation and shall not be deemed to limit or affect
      any
      of the provisions hereof.

    

    i)    Status
      of Converted or Redeemed Preferred Stock.
      Shares
      of Preferred Stock may only be issued pursuant to the Purchase Agreement. If
      any
      shares of Preferred Stock shall be converted, redeemed or reacquired by the
      Corporation, such shares shall resume the status of authorized but unissued
      shares of preferred stock and shall no longer be designated as Series A 5%
      Convertible Preferred Stock.

    

    

    *********************

    
       

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    RESOLVED,
      FURTHER, that the Chairman, the president or any vice-president, and the
      secretary or any assistant secretary, of the Corporation be and they hereby
      are
      authorized and directed to prepare and file a Certificate of Designation of
      Preferences, Rights and Limitations in accordance with the foregoing resolution
      and the provisions of Delaware law.

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Certificate this 25th day
      of
      April 2006.

     

    
      	 	 	 	 
	/s/ Mark
              Basile	 	 	/s/
              Steven
              Kang 
	
              

            	 	 	
              

            
	Name:
              Mark
              Basile

              Title:
                President

            	 	 	Name:
              Steven
              Kang

              Title:
                Secretary

            

    

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    ANNEX
      A

    

    NOTICE
      OF
      CONVERSION

    

    (TO
      BE
      EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED
      STOCK)

    

    The
      undersigned hereby elects to convert the number of shares of Series A 5%
      Convertible Preferred Stock indicated below into shares of common stock, no
      par
      value per share (the “Common
      Stock”),
      of
      bioMETRX, Inc., a Delaware corporation (the “Corporation”),
      according to the conditions hereof, as of the date written below. If shares
      are
      to be issued in the name of a Person other than the undersigned, the undersigned
      will pay all transfer taxes payable with respect thereto and is delivering
      herewith such certificates and opinions as may be required by the Corporation
      in
      accordance with the Purchase Agreement. No fee will be charged to the Holder
      for
      any conversion, except for any such transfer taxes.

    

    Conversion
      calculations:

    

    
      	 	
              Date
                to Effect Conversion:

            	 	 
	 	
              Number
                of shares of Preferred Stock owned prior to Conversion:

            	 	 
	 	
              Number
                of shares of Preferred Stock to be Converted:

            	 	 
	 	
              Stated
                Value of shares of Preferred Stock to be Converted:

            	 	 
	 	
              Number
                of shares of Common Stock to be Issued:

            	 	 
	 	
              Applicable
                Conversion Price:

            	 	 
	 	
              Number
                of shares of Preferred Stock subsequent to Conversion:

            	 	 

    

     

    
      	 	 	 
	 	[HOLDER]
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	
              Title:

            

    

     

    
      
         

      

        24

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