Document:

F-4

Exhibit 10.3  

CONVERTIBLE LOAN
AGREEMENT  

        This
Convertible Loan Agreement (this “Agreement”) is made and entered into as
of October 29, 2007 by and between Negevtech Ltd., a company incorporated under the laws
of the State of Israel (the “Company”) and the lenders listed in Annex A
hereto (each a “Lender” and collectively, the
“Lenders”). 

        WHEREAS,
the Company desires to borrow from the Lenders an aggregate amount of $5,000,000 (the
“First Loan Amount”) and the Lenders are willing to provide the First
Loan Amount to the Company, subject to the terms and conditions of this Agreement; and 

        WHEREAS,
the Company further desires to borrow from the Lenders an additional aggregate amount of
$5,000,000 (the “Additional Loan Amount”) and the Lenders are willing to
provide the Additional Loan Amount to the Company, all subject to the terms and conditions
of this Agreement (the First Loan Amount and the Additional Loan Amount shall be referred
together as the “Loan Principal Amount”). 

        NOW,
THEREFORE, the parties agree as follows: 

1.     Loan 

         (a)       
          Subject to the terms and conditions hereof, the Lenders shall lend the Company,
          and the Company shall borrow from the Lenders, the Loan Principal Amount. The
          portion of the Loan Principal Amount to be provided by each Lender is set forth
          on Annex A1, A2 hereto opposite each Lender’s name.
          The obligation of each Lender to provide such Lender’s portion of the Loan
          Principal Amount is several and not jointly with the other Lenders. 

         (b)       
          The Loan Amount (as defined below) shall be used by the Company as general
          working capital in accordance with the budget which shall be approved by the
          Board of Directors of the Company from time to time (the
          “Budget”). 

2.     Closing 

    2.1        The
closing of the transaction of the First Loan Amount (the “1st Closing”)
shall take place on October 29, 2007 and shall be subject to the fulfillment of all of
the conditions to Closing, as set forth in Section 3 hereof. At the 1st Closing, each
Lender shall pay to the Company the applicable amount, out of the First Loan Amount, set
forth in Annex A1 opposite such Lender’s name, by wire transfer to the Company’s
bank account.  

    2.2        The
closing of the transaction of the Additional Loan Amount (the “2nd Closing”and
together with the 1st Closing, the “Closing”) shall take place within 10
(ten) business days following such date as has been determined by the Company’s
Board of Directors, based on the Company’s needs for cash, and shall be subject to
the fulfillment of all of the conditions to the 2nd Closing, as set forth in Section 3
hereof. At the 2nd Closing, the Lenders shall pay to the Company the Additional Loan
Amount in the amounts set forth in Annex A2 opposite each Lender’s name, by
wire transfer to the Company’s bank account.  

3.     Conditions
to Closing. 

    3.1        The
obligations of the Lenders under Section 2.1 and 2.2, respectively, are subject to the
fulfillment on or before the 1st Closing or the 2nd Closing, as applicable, of each of
the following conditions:  

	 	3.1.1 	receipt
of the approval of the Board of Directors of the Company (the “Board”) and the
General Meeting of Shareholders of the Company for the execution, delivery and
performance by the Company of this Agreement, and 

	 	3.1.2 	all
representations and warranties of the Company contained in Section 6 below shall be true
and correct in all material respects at the time of the 1st Closing as though made again
at that time. 

    3.2        The
Lenders hereby undertake to take all steps necessary on their part in order to ensure the
fulfillment of the above conditions at each of the 1st Closing and the 2nd Closing,
including voting their shares for the adoption of the resolutions need to be taken by the
Shareholders of the Company in connection with the transactions contemplated under this
Agreement.  

4.     Terms
of Loan. 

        This
Loan is subject to the following terms and conditions: 

         (a)       
          Maturity Date. The entire unpaid balance of the loans provided under this
          Agreement, including the Loan Principal Amount and all accrued and unpaid
          Interest thereon (the “Loan Amount”), shall be immediately due
          and payable on the earlier of (i) January 31, 2009 (ii) such other date decided
          by the Board to the extent that the financial condition of the Company has been
          significantly improved, as was determined by the Board in its sole discretion
          (the “Maturity Date”). 

        It
is hereby agreed and clarified that notwithstanding anything to the contrary in this
Agreement, the repayment of the Loan Amount or any part thereof, for any reason
whatsoever, shall be subordinated to and subject to the full repayment of all amounts
(including all accrued and unpaid interest thereon) due by the Company to Plenus
Technologies Ltd., Plenus II L.P. and/or Plenus II (D.C.M.) L.P. (“Plenus”)
under the agreements entered between Plenus and the Company, dated October 11, 2005 and
October 14, 2005 as amended (the “Plenus Agreement”). 

         (b)       
          Interest. Interest on the unpaid Loan Principal Amount shall accrue with
          respect to each installment payment from the date of the actual payment of such
          respective installment to the Company (including the 1st Closing, the 2nd
          Closing or any other date of actual payment), at a rate equals to LIBOR for one
          year plus 2.3% per annum, compounded annually (and prorated with respect to any
          portion thereof), until the entire Loan Amount is paid in full (the
          “Interest”). 

    (c)        Conversion.  

	 	        (i)Optional
Conversion. Each Lender may, at its own discretion (but subject           to section
4(c)(iii) below), either (a) convert the applicable amount of the           Loan Amount
(including any Interest accrued thereon) due to such Lender or any           part
thereof, into shares of the Company’s Series A-1 Preferred Shares (the
          “A-1 Shares”), with a price per share of $1.3235 (the “A-1
          Price”), or, in case the Company has consummated another equity financing
          prior to such Lender’s election (the “New Equity financing”),
          into shares of the Company’s equity securities which have been issued and
          sold at the closing of such New Equity Financing. The number of A-1 Shares to
be           issued to each Lender upon such conversion shall be equal to the quotient
          obtained by dividing the outstanding Loan Amount (and any Interest accrued
          thereon) provided by such Lender by the A-1 Price, rounded to the nearest whole
          share, or (b) demand in writing the repayment in full of the Loan Amount
          provided by such Lender, together with any Interest accrued thereon, within 7
          days of receipt of such demand; provided that such demand of repayment may be
          made only following the Maturity Date and provided further that such repayment
          shall be subject to the rights of Plenus under the Plenus Agreement.  

	 	        (ii)
Automatic Conversion In the event that a Lender has elected to demand the
          repayment of its applicable amount of the Loan Amount in accordance with
          subsection (c)(i) above, and the Company does not have available cash for the
          repayment of the outstanding Loan Amount due to such Lender or any part thereof
          (as shall be determined by the Company’s Board of Directors), such Loan
          Amount or any part thereof which the Company is unable to repay, shall
          automatically be converted into A-1 Shares based on the A-1 Price or, in case
          the Company has consummated a New Equity financing (as defined above), into
          shares of the Company’s equity securities which have been issued and sold
          at the closing of such New Equity Financing, unless the Lender has decided to
          defer the Maturity Date of such Loan Amount or any part thereof which the
          Company is unable to repay.  

	 	        In
case of conversion of the Loan Amount either under this subsection (ii) or subsection (i)
above into the Company’s equity securities which have been issued and sold at the
closing of a New Equity Financing and if more than one class or series of equity
securities are issued as part of the New Equity Financing, then the Lenders shall be
entitled to the most favorable class or series of equity securities issued in such
financing, and in the event that the New Equity Financing includes issuances of shares of
the same class at different prices per share, then the Lenders shall be entitled to
receive the lowest of such prices. The number of shares to be issued to each Lender upon
such conversion shall be equal to the quotient obtained by dividing (x) the outstanding
Loan Amount (and any Interest accrued thereon) provided by such Lender by (y) the price
per share of the equity securities paid by investors in the New Equity Financing, rounded
to the nearest whole share, and such shares shall be of the same class and have such
rights (including with respect to original issuance price, liquidation preference,
conversion price and with respect to any other securities, warrants or other rights
issued or provided as part of the New Equity Financing) as those of the New Equity
Financing, and the Lenders shall be deemed to be investors in the New Equity Financing
for all purposes  

	 	        (iii)
Automatic Conversion Upon Non Participation Notwithstanding anything to
          the contrary in this Agreement, in the event that a Lender shall not provide
the           Company at the 2nd Closing with the applicable portion of the Additional
Loan           Amount indicated opposite such Lender’s name in Annex A2 attached
          hereto, then, the entire portion of the First Loan Amount due to such Lender,
          including any Interest accrued thereon, shall automatically be converted upon
          the 2nd Closing into 1 (one) Series A-1 Preferred Share of the Company, of
          nominal value 1 NIS. The original issue price of this share for purposes of
          conversion rights and/or liquidation preference rights shall deemed to be the
          A-1 Price, i.e. $1.3235 (without taking into account the actual portion of the
          First Loan Amount provided by such Lender at the 1st Closing) and in no event
          shall it entitle its holder to any rights or privileges beyond the rights of
          privileges resulting from such price of $1.3235.  

	 	        Without
derogating from the above, it is herby agreed that a non-participation by a Lender in the
2nd Closing shall not be deemed a breach of this Agreement.  

	 	        (iv)
Mechanics and Effect of Conversion. No fractional shares of the           Company’s
share capital will be issued upon conversion of the Loan Amount,           and the number
of shares will be rounded down to the nearest whole number. Upon           conversion of
the Loan Amount pursuant to this Section 4, the Lenders shall           surrender this
Agreement duly endorsed, at the principal offices of the Company.           At its
expense, the Company will, as soon as practicable after the date any           conversion
is effected under this Agreement, issue and deliver to the Lenders, a
          certificate or certificates for the number of shares to which each Lender is
          entitled upon such conversion, together with such other securities and property
          to which the Lenders are entitled upon such conversion under the terms of this
          Agreement. Upon conversion of the Loan Amount, the Company will be forever
          released from all of its obligations and liabilities (other than those relating
          to the representations and warranties in Section 6) under this Agreement,
          including without limitation the obligation to pay the Loan Amount (including
          any accrued Interest thereon).  

         (d)       
          Exit Event. In the event that, prior to either (i) a conversion of the
          Loan Amount into investment in the Company or the repayment of the Loan Amount
          pursuant to subsections (c)(i) or (c)(ii) above, or (ii) the repayment of the
          Loan Amount upon Event of Default pursuant to section (e) below, an Exit Event
          occurs, then, immediately prior to such Exit Event, the Loan Amount and any
          Interest accrued thereon, shall either, at the Lender’s own
          discretion (A) automatically be converted into the securities issued at the
          Company’s last round of financing took place before the Exit Event, at a
          price per share equals to the lower of (i) the price per share applicable
          to the Exit Event, (which calculation shall assume the conversion of the Loan
          Amount as aforesaid), (ii) the price per share paid at the Company’s last
          round of financing took place before the Exit Event and (iii) the A-1 Price
          or (B) be immediately due and payable out of the consideration received
          in connection with such Exit Event, whether such consideration is in cash or a
          non-cash consideration. 

        For
the purposes of this Agreement, “Exit Event” shall mean, the Company’s IPO
or its merger into, acquisition by, sale of majority of its outstanding share capital or
sale of all or substantially all its assets to another entity, or any other transaction or
series of transactions resulting in the sale of more that 50% of the Company’s voting
power to another entity or person. 

         (e)       
          Events of Default. The Loan Amount, together with any accrued Interest,
          shall, immediately become due and payable to the Lenders upon any Event of
          Default as defined herein, unless the Lenders providing a majority of the Loan
          Amount waive their rights regarding such Event of Default. The occurrence of any
          of the following shall be an Event of Default: 

	 	        (i)
Any material breach by the Company of any of its obligations or representations
          under this Agreement, which breach is not cured by the Company within sixty
(60)           days of receiving written notice thereof from any of the Lenders; or  

	 	        (ii)
          The commencement of any liquidation proceedings of the Company or the adoption
          of a winding up resolution by the Company, or the appointment of a receiver or
          trustee over the Company’s assets, or the calling by Company of a meeting
          of creditors for the purpose of entering into a scheme or arrangement with
them,           and if any of the aforementioned actions or proceedings is not cancelled
within           ninety (90) days of its initiation; or  

	 	        (iii)
          The levy of an attachment or the institution of execution proceedings against
          the whole or substantially all of Company’s assets, where such attachment
          or execution proceeding is not discharged within ninety (90) days. The Company
          shall notify the Lenders within seventy-two (72) hours of any such attachment
or           proceedings.  

     5.    
          Adjustments Each of the prices per share described above
          shall be adjusted for any share splits, issuance of bonus shares, combinations
          of shares, distribution of dividends and the like. 

     6.    
          Representations and Warranties. The Company hereby
          represents and warrants to the Lenders as of the date of the Closing hereof: 

         (a)       
          Organization and Qualification. The Company is a private company duly
          organized and incorporated on 22.12.91, validly existing under the laws of the
          State of Israel. The Company has all requisite corporate power and authority to
          carry on its business as now conducted and as proposed to be conducted
          under the Budget. No proceeding or resolution for bankruptcy, dissolution,
          liquidation, winding-up, appointment of receiver and/or similar proceeding has
          been instituted or taken by the Company, and to the best of its knowledge, no
          such proceeding has been instituted or threatened against the Company. 

         (b)       
          Capitalization. Immediately prior to the 1st Closing, the authorized
          share capital of the Company consists of NIS 56,000,000 divided into (i)
          30,000,000 Ordinary Shares, par value NIS 1 each, of which 1,067,013 Ordinary
          Shares are issued and outstanding and of which 4,313,007 are reserved for
          issuance to employees, consultants, officers, or directors of the Company and/or
          subsidiaries thereof pursuant to the Share Option Plans (such number not
          including 3,935 Ordinary Shares already issued upon past exercise of options
          granted to employees of the Company), of which 3,684,248 have been allocated and
          the remaining are available for future issuance, (ii) 3,500,000 Ordinary
          Preferred A Shares, par value NIS 1 each, of which 2,386,991 are issued and
          outstanding, (iii) 10,000,000 Ordinary Preferred B Shares, par value NIS 1 each,
          of which 9,000,062 are issued and outstanding, and (iv) 12,500,000 Series A-1
          Preferred Shares, par value NIS 1 each, of which 12,011,283 are issued and
          outstanding 

Following the 1st Closing, the
authorized share capital of the Company shall consist of NIS 73,500,000 divided into (i)
40,000,000 Ordinary Shares, par value NIS 1 each, of which 1,067,013 Ordinary Shares are
issued and outstanding and of which 4,313,007 are reserved for issuance to employees,
consultants, officers, or directors of the Company and/or subsidiaries thereof pursuant to
the Share Option Plans (such number not including 3,935 Ordinary Shares already issued
upon past exercise of options granted to employees of the Company), of which 3,684,248
have been allocated and the remaining are available for future issuance, (ii) 3,500,000
Ordinary Preferred A Shares, par value NIS 1 each, of which 2,386,991 are issued and
outstanding, (iii) 10,000,000 Ordinary Preferred B Shares, par value NIS 1 each, of which
9,000,062 are issued and outstanding, and (iv) 20,000,000 Series A-1 Preferred Shares, par
value NIS 1 each, of which 12,011,283 are issued and outstanding. 

The outstanding Ordinary Shares,
Ordinary-Preferred Shares and Preferred Shares, are all duly and validly authorized and
issued, fully paid and nonassessable and have been issued in accordance with the corporate
and securities laws of the State of Israel. 

         (c)       
          Since its incorporation, there has been no declaration or payment by the Company
          of dividends, or any distribution by the Company of any assets of any kind to
          any of its shareholders in redemption of or as the purchase price for any of the
          Company’s securities. 

         (d)       
          Authorization and Approvals. Subject to the provisions of this subsection
          (d), the Company has all requisite power and authority to execute, deliver, and
          perform this Agreement, and the other agreements contemplated hereby or which
          are ancillary hereto (the “Transaction Documents”). All
          corporate action on the part of the Company and its respective officers,
          directors and shareholders necessary for the authorization, execution and
          delivery of this Agreement and the Transaction Documents, the performance of all
          obligations of the Company hereunder has been taken or will be taken on or prior
          to the date of the 1st Closing or the 2nd, as applicable, and this Agreement,
          the Transaction Documents, and any obligations contemplated herein and therein
          constitute, or shall constitute upon the 1st Closing or the 2nd Closing, as the
          case may be, valid and legally binding obligations of the Company, enforceable
          in accordance with its terms. Upon obtaining the approvals mentioned hereinafter
          in this sub-section (d), the individuals executing this Agreement and the
          Transaction Documents on behalf of the Company have appropriate authority to act
          on behalf of the Company in connection with the Agreement. Except for (i) the
          approval of the Board of Directors, and (ii) the approval of shareholders of the
          Company, no approvals, permits or consents of, order, authorization of, action
          by, designation, declaration, or filing with any state or local governmental
          body, official authority, or any other third party is required on the part of
          the Company, under any applicable law or instrument in connection with the
          execution, delivery, and performance of this Agreement and the Transaction
          Documents, or the consummation of the transactions contemplated hereby and
          thereby which has not or will not be filed prior to 1st Closing or the 2nd
          Closing, as applicable. All such qualifications and filings will, in the case of
          qualifications, be effective on the date of the 1st Closing or the 2nd Closing
          and will, in the case of filings, be made within the time prescribed by law. 

         (e)       
          Valid Issuance of Shares The shares issued upon conversion of the Loan
          Amount or any part thereof in accordance with this Agreement shall, when issued
          as provided for herein, be duly authorized, validly issued and fully paid and
          shall be issued in compliance with all applicable laws, including Israeli
          securities laws, free of any pre-emptive rights or similar rights and free and
          clear of any taxes, liens or encumbrances. 

7.     Transfer;
Successors and Assigns. 

        The
terms and conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Notwithstanding the foregoing, none
of the rights or obligations set forth in, arising under, or created by this Agreement may
be assigned or transferred by any party without the prior consent in writing of the other
party and shall be subject to any limitations on transfer of shares set forth in the
Company’s Articles of Association, except that each of the Lenders may assign,
pledge, or otherwise transfer its interest under this Agreement to its Permitted
Transferees (as defined in the Company’s Articles of Association). 

8.     Governing
Law; Jurisdiction. 

        This
Agreement and all acts and transactions pursuant hereto and the rights and obligations of
the parties hereto shall be governed, construed and interpreted in accordance with the
laws of the State of Israel without regard to the conflict of law provisions thereof. Any
dispute arising in relation to this Agreement shall be resolved in the competent courts of
Tel-Aviv. 

9.     Amendments
and Waivers. 

        Any
term of this Agreement may be amended only with the written consent of the Company and all
the Lenders. Any amendment or waiver effected in accordance with this Section 9 shall be
binding upon the Company, the Lenders and each transferee of the Lenders. 

10.     Regulatory
Matters 

Anything to the contrary in this
Agreement not withstanding, it is agreed that in any event in which the Loan Amount due to
Poalim Ventures (as such term is defined in the Company’s Articles of Association, as
shall be amended from time to time), including any Interest accrued thereon, is to be
converted to shares of the Company in accordance with the terms and conditions hereunder,
such Loan Amount shall be converted only to the extent not increasing the shareholdings of
all of Poalim Ventures entities in the Company, in the aggregate, above the limitations
imposed on Poalim Ventures under any applicable law (as such applicable law shall be
notified to the Company by Poalim Ventures) and the remainder of the Loan Amount, if any,
shall continue to be outstanding subject to the terms and conditions hereunder. 

11.     Counterparts. 

        This
Agreement may be executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. 

     12.    
          Other Miscellaneous: (i) Entire Agreement – This
          Agreement constitutes the full and entire understanding and agreement between
          the parties with regard to the subject matter hereof. (ii) Severability:
          The terms and provisions of this Agreement are severable, and if any term or
          provision shall be determined to be in any way unenforceable in whole or in part
          pursuant to applicable law, such determination shall not impair or otherwise
          affect the validity, legality or enforceability of that term or provision in any
          other jurisdiction or any of the remaining terms and provisions of this
          Agreement in any jurisdiction, and any such provision shall be given effect to
          the extent legally possible. (iii) Preamble: The preamble hereto
          constitutes an integral part hereof. (iv) Headings: The titles of the
          sections and subsections of this Agreement are for convenience of reference
          only, and are not to be considered in construing this Agreement. (v)
          Notices: All notices required or permitted hereunder to be given to a
          party to this Agreement shall be in writing and shall be telecopied or mailed by
          registered or certified mail, postage prepaid, or otherwise delivered by hand or
          by messenger, 

	If to the Company:	Negevtech Ltd. 
12 Hamada St. Rehovotl, 736703, Israel 
Fax: ++972-8-9366051 
Tel: ++972-8-9312222 
Attn. Oz Desheh

If to any of the Lenders: The address
set forth on Annex A hereto, opposite each Lender’s name. 

[Negevtech
– October 2007 – 10M$ Bridge Loan] 

IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above written. 

			Negevtech Ltd.

By:
——————————————

Name:
Title:

LENDERS: 

	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________
	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________
	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________	
________________________

Name:___________________
Title:____________________

[Negevtech – October
2007 – 10M$ Bridge Loan]  

Annex A1 

List of Lenders &
First Loan Amount 

                                                       See attached table

Annex A2 

List of Lenders & Additional
Loan Amount 

                                                       See attached tableF-4

Exhibit 10.4  

LOAN AGREEMENT  

        THIS
LOAN AGREEMENT (this “Agreement”) is made as of the 11 day of October,
2005, by and among Negevtech Ltd., an Israeli company number 51-163426-3, of 12 Hamada
Street, P.O. Box 2264, Rehovot 76122, Israel (the “Company”), Plenus II
L.P., an Israeli limited partnership number 55021817-6 (“Plenus”) and
Plenus II (D.C.M.), Limited Partnership, an Israeli limited partnership number
55-021825-9, both of 16 Abba Eben Avenues, Herzeliya Pituach 46726, Israel
(each of Plenus and Plenus II (D.C.M.), Limited Partnership – a
“Lender”, and collectively – the “Lenders”). 

W I T N E S S E T H: 

        WHEREAS,
the Company wishes to borrow money from the Lenders on the terms and conditions set forth
in this Agreement; and 

        WHEREAS,
 the Lenders  are  willing to lend money to the Company on the terms and  conditions set
forth in this Agreement; 

        NOW
THEREFORE, the parties hereto hereby agree as follows: 

         1.       
          Loan, Warrant and Security. 

    1.1        The
Loan Amount. The Lenders will lend to the Company, and the Company will borrow from
the Lenders, an aggregate amount of ten million dollars ($10,000,000) (the “Loan”).  

    1.2        Disbursement.
The Loan shall be provided to the Company in installments ("Installments"),
as follows:  

	 	— 	the
first Installment in an amount of four million and five hundred thousand dollars
($4,500,000) shall be provided to the Company (or to Plenus Technologies Ltd., if so
instructed in writing by the Company) on October 11, 2005, or such other date as shall be
agreed by the parties hereto (the “Closing  Date”); 

	 	— 	an
additional aggregate amount of up to five million and five hundred thousand dollars
($5,500,000) shall be payable to the Company’s order (‘Line of Credit’)
and provided in installments of not less than two hundred and fifty thousand dollars
($250,000) each, each installment upon the later of: (i) seven (7) business days
following the date on which Plenus receives a written disbursement request from the
Company stating the exact amount the Company wishes to receive from the Lenders (the
“Disbursement Request”), or (ii) the disbursement date specified (if
specified) in the Disbursement Request; provided, however, that such
disbursement date must always be before the first anniversary of the Closing Date; 

	 	— 	the
balance, if any, between the Loan and the amounts extended to the Company pursuant to the
previous two paragraphs, shall be provided to the Company in one installment on the first
anniversary of the Closing Date. 

Each Installment shall be transferred
by the Lenders to the Company by means of wire transfer in accordance with wire
instructions to be provided in writing to Plenus by the Company from time to time, or, if
no other instructions are given, to: 

		
		
		
		
		
	 	Negevtech Ltd. 
	 	Account no.: 222200/29
	 	Bank: Bank Leumi Le-Israel. B.M.
	 	Branch No: 978
	 	Account Name: Negevtech Ltd.
	 	Address: 10 Plaut St., Rehovot

The Company agrees that each
Installment to be provided to the Company hereunder will be divided between the Lenders to
reflect the pro rata portion of the Loan which each Lender has committed to lend to the
Company as set forth in Schedule 1 attached hereto or as may
otherwise be agreed between the Lenders and notified in writing to the Company, provided
that in any event the Company shall receive the aggregate total amount of each
Installment. 

     1.3        Delivery
of Documents. On or prior to the Closing Date, the Company shall deliver to Plenus
the following documents: (i) a warrant, in the form attached hereto as Exhibit A (the
“Warrant”), in the name of Plenus Technologies Ltd., for the purchase of
Warrant Shares (as defined in the Warrant) in accordance with the terms of the Warrant,
duly executed by the Company; (ii) a Floating Charge Agreement (the “FloatingCharge
Agreement”) and a Fixed Charge Agreement (the “Fixed ChargeAgreement”)
by and among the Lenders, the Co-lenders (as defined below) and the Company, in the forms
attached hereto as Exhibit B1 and Exhibit B2,
respectively, duly executed by the Company and stamped to indicate filing with the
Israeli Registrar of Companies; (iii) copies of forms for creating a floating charge (as
per Exhibit C1) and a fixed charge (as per Exhibit C2),
both duly signed by the Company; (iv) true and correct copies of resolutions of the
Company’s Board of Directors (a) authorizing the Company to enter into this
Agreement, the Floating Charge Agreement and the Fixed Charge Agreement, (b) authorizing
the issuance of the Warrant to Plenus Technologies Ltd. and reserving a sufficient number
of Preferred Shares BB-1 to be issued upon exercise of the Warrant, and (c) authorizing
an officer of the Company to execute and deliver all of such documents and their
respective exhibits and schedules; (v) waivers, consents and approvals, to the extent
required, in respect of the transactions contemplated hereby, including, but not limited
to, regarding pre-emptive rights, registration rights and other rights of third parties,
including, without limitation, creditors and governmental entities, if applicable; (vi)
legal opinion by counsel to the Company, in the form attached hereto as Exhibit D;
(vii) true and correct copies of resolutions of the Company’s shareholders
authorizing the Company to enter into the transactions contemplated hereby; (viii) Bank
Leumi’s written consent for: (a) registration of the fixed charge and floating
charge as further described in the Fixed Charge Agreement and Floating Charge Agreement;
and (b) registration of (A) the floating charge described in the Floating Charge
Agreement pari passu with Bank Leumi’s general first degree floating charge;
and (B) the fixed charge described in the Fixed Charge Agreement pari passu with
the Bank Leumi’s fixed charge over the Company’s intellectual property, and
(ix) an officer’s certificate in the form attached hereto as Exhibit E.
The obligation of the Lenders to extend the Loan to the Company shall also be subject to
the repayment of the US$4,500,000 loan extended to the Company pursuant to the Loan
Agreement, dated as of January 14, 2005, between the Company, as a borrower, and Plenus
Technologies Ltd. as a lender (the “January Loan”), on or before the
Closing Date. It is agreed, however, that the Company may, by written notice to Plenus on
or before the Closing Date, use the first Installment of the Loan to repay the January
Loan. At the Closing and as a condition thereto, concurrently with the repayment of the
January Loan, Plenus shall provide the Company with Plenus Technologies Ltd.‘s
confirmation in writing (i) that the January Loan has been repaid in full and (ii) that
any and all charges registered in connection with the January Loan may be released in a
form satisfactory to the Companies Registrar for the removal of all charges over the
Company’s assets registered in connection with the January Loan, simultaneously with
the registration of the charges hereunder.  

- 2 -

Without detracting from the
Company’s obligation to timely furnish Plenus with all of the documents set forth
above, the obligations of the Lenders pursuant hereto shall be subject to receipt of all
of such documents (any of which may be waived in whole or in part by Plenus), and the
Lenders shall have the right to terminate this Agreement by written notice to the Company
should the Company breach its obligation to furnish any of the said documents within the
specified period. 

     1.4        Security.
The Company shall secure the repayment of any amount borrowed hereunder (the “Principal Amount”),
any accrued and unpaid Interest (as defined below), the Credit Line Fee (as defined
below) and any other amount due to the Lenders hereunder or in connection herewith, by
creating (a) a first ranking floating charge on the Company’s present and future
tangible and intangible assets and rights of any kind, whether contingent or absolute, as
more fully set forth in the Floating Charge Agreement, pari passu with Bank Leumi’s
floating charge and subject to Bank Leumi’s pledges over a deposit in the amount of
US$ 1,000,000 created in connection with a certain loan given by Bank Leumi for the
purchase of a certain electronic microscope (SEMIVISION) (the “Microscope”),
and (b) a first ranking fixed charge on the Company’s technology, as more fully set
forth in the Fixed Charge Agreement, pari passu with Bank Leumi’s fixed charge over
the Company’s intellectual property, for the benefit of the Lender and the entities
specified as co-lenders in Schedule 1 hereto (the “Co-lenders”).  

        The
Lenders hereby acknowledge that the security interest in the Company’s intellectual
property which constitutes “know-how” under the Encouragement of Industrial
Research and Development Law, 5733-1984 (“the Encouragement Law”) (such
know-how, “Grant Funded Know-How”) is subject to the Chief
Scientist’s Rights (as hereinafter defined). In addition, the Lenders hereby
acknowledge that any realization of Grant Funded Know-How, including the sale of the Grant
Funded Know-How and its transfer within the framework of realization procedures will
require the approval of the Research Committee (as hereinafter defined). Likewise, any
transfer of said Grant Funded Know-How will be conditional upon the potential buyer or
transferee undertaking to assume the obligations in accordance with the Encouragement Law
including Section 19(c) thereof and in accordance with the terms of the program pursuant
with which grants were provided to the Company including the obligation: (i) not to
transfer the Grant Funded Know-How to another unless the Research Committee approves the
transaction; (ii) to pay royalties. 

- 3 -

        In
this Agreement, the “Chief Scientist Rights” shall mean all the rights, powers
and privileges of the Ministry of Industry and Trade’s Industrial Research and
Development Committee (the “Research Committee”) by virtue of the
Encouragement Law and/or of an instrument of approval granted by the Chief Scientist of
the Israel Ministry of Industry, Trade and Employment, pursuant to his powers under the
Encouragement Law. 

     1.5        Seniority.
The indebtedness evidenced by this Agreement is hereby expressly stated to be senior in
right of payment to any current or future indebtedness of the Company (whether reflected
on the balance sheet or not), except for (i) the indebtedness incurred by the Company in
its ordinary course of business, and (ii) the repayment of US$ 1,500,000 borrowed by the
Company from Bank Leumi (the outstanding amount of the Microscope loan).  

     1.6        Term
of Loan. The term of the Loan (the “Term”) will commence on the
Closing Date (subject to the Installments specified in Section 1.2 hereto) and will
terminate thirty six (36) months following the Closing Date, unless this Agreement is
earlier terminated or repayment is accelerated in accordance with this Agreement.  

         2.       
          Payments. 

     2.1        Principal
Amount. The outstanding and unpaid Principal Amount shall be due and payable, in
one payment, on the expiration date of the Term.  

     2.2        Interest
on Principal. The Principal Amount outstanding from time to time (denominated in
dollars) shall bear interest at an annual rate (calculated on a 360 day year for the
actual number of days elapsed) of LIBOR + 4% (four percent), from the disbursement date
of the Principal Amount until the first anniversary of the Closing Date, and at an annual
rate (calculated on a 360 day year for the actual number of days elapsed and compounded
annually) of LIBOR + 4.5% (four and one-half percent), from the first anniversary of the
Closing Date until the date of actual repayment of the Principal Amount ,in each case
– plus value added tax (“VAT”), if applicable (such interest
together with the VAT – the “Interest”). The Interest accrued in
each calendar quarter during the Term shall become due and payable on the first day of
the next ensuing calendar quarter, except for the Interest accrued during the quarter in
which the Principal Amount is due and payable, which Interest shall be due and payable on
the due date of the Principal Amount.  

     2.3        Interest
on Late Payment. Any amount owing by the Company to the Lenders hereunder which is
not paid by the Company on its due date, shall bear an additional five percent (5%)
interest per annum, plus VAT if applicable; which additional interest shall be compounded
daily.  

     2.4        Credit
Line Fee. The Company shall pay to the Lenders, on the first anniversary of the
Closing Date, a fee equal to one and one-half percent (1.5%) (calculated on a 360 day
year for the actual number of days elapsed) of the amount of the Loan which was not drawn
by the Company throughout the 12-month period ending on such anniversary date, plus VAT
if applicable (the “Credit Line Fee”). For the purpose of the Credit
Line Fee, any amount borrowed and repaid during such 12-month period shall be taken into
account as partially utilized, based on the number of days it was outstanding.  

- 4 -

     2.5        Division
of Payments. Unless and until otherwise notified by Plenus to the Company in writing,
all payments payable by the Company to the Lenders hereunder shall be divided between the
Lenders in amounts which reflect their pro rata lending to the Company as set forth in
Schedule I and shall be made to the following account: – Plenus II, L.P. account
number 233400-61 with Bank Leumi, Branch No. 864 (Business Herzelia Branch), located at
11 Galgaley Haplada St., Herzelia (Swift Code: LUMIILITTLV).  

     2.6        Prepayment. The
Company may, at any time, prepay any amounts owed to the Lenders, without penalty or
premium, by providing Plenus with at least thirty (30) days prior written notice
indicating its intention to do so and specifying therein the date and the amount of such
prepayment. A notice of prepayment may not be withdrawn or cancelled by the Company
without Plenus’s written consent. Without derogating from the generality of the
aforesaid, it is clarifies that any Installment disbursed during the first 12-month
period pursuant to a Disbursement Request may be repaid and then borrowed again, in whole
or in part, during such period.  

     2.7        Early
Termination. The Company may terminate this Agreement, prospectively, at any time
before the expiration of the Term, by providing Plenus with at least thirty (30) days
prior written notice indicating its intention to do so and specifying the early
termination date, in the form attached hereto as Exhibit F, provided that
(i) upon delivery of such notice and on such early termination date the Company is not in
default under this Agreement, the Floating Charge Agreement, the Fixed Charge Agreement
or the Warrant (together, the “Transaction Documents”), and (ii) on the
date of such early termination, all amounts due from the Company pursuant to the
Transaction Documents, on account of the Principal Amount, the Interest, late payment
interest, if applicable, Credit Line Fee or otherwise, shall have been paid in full and
the Company shall not have any outstanding debts to the Lenders pursuant to, or in
connection with, the Transaction Documents.  

     2.8        Set-off.
The Lenders may set-off any obligation owed to them by the Company under the Transaction
Documents against any obligation (whether or not due and payable) owed by the Lenders to
the Company, regardless of the place of payment, booking branch or currency of either
obligation, upon giving the Company a written notice to this effect. If an obligation is
not liquidated or is unascertained, the Lenders may set-off in an amount estimated by it
in good faith to be the amount of that obligation, provided that in case the
actual amount owed by the Company turns out to be lower than the amount estimated by the
Lenders, the Lenders shall return the difference to the Company. If obligations are in
different currencies, the Lenders may convert either obligation at a market rate of
exchange in their usual course of business for the purpose of the set-off. The Lenders
shall not be obliged to exercise any right given to them under this Section 2.8. In the
event that the foregoing set-off is made by the Lenders, any amounts set-off will be
deemed to be payment as described in Section 2 above. The Company may not set-off
any obligation owed to it by the Lenders against any obligation it owes to the Lenders
under the Transaction Documents.  

- 5 -

         3.       
          Acceleration. 

        Notwithstanding
anything herein to the contrary, the entire unpaid Principal Amount, together with accrued
and unpaid Interest to date, shall be due and payable at any time without any further
demand, immediately upon the occurrence of any of the events described below
(“Event of Acceleration”), unless otherwise provided herein: 

          		    (i)       
               the Company fails to pay any sum due from it under this Agreement at the time,
               in the currency and in the manner specified herein, or is otherwise in breach of
               any of the Transaction Documents, and the same is not remedied within three (3)
               days, in case of non-payment, seven (7) days in case of a material breach, or
               fourteen (14) days in case of any other breach, from written notice by Plenus to
               the Company of the occurrence and nature of such non-payment or breach; or 

               

          		    (ii)       
               the Company admits, or indicates in writing, its inability to pay its debts as
               they fall due, commences negotiations with one or more of its creditors with a
               view to a general readjustment or rescheduling or another arrangement regarding
               its indebtedness, pursuant to Section 350 to the Israeli Companies Law, 1999
               (the “Companies Law”) or otherwise; or makes a general
               assignment for the benefit of, or a composition with, its creditors pursuant to
               Section 350 to the Companies Law or otherwise; or 

               

          		    (iii)       
               any indebtedness of the Company to a third party for borrowed money in the
               amount of more than $150,000 is not paid when due; or any indebtedness of the
               Company to a third party for borrowed money in the amount of more than $150,000
               becomes capable of being declared by such third party to be, or is declared, due
               and payable prior to its specified maturity; or any commitment of a third party
               to lend to the Company, or to make any credit facility available to the Company,
               in the amount of more than $150,000 is cancelled by such third party; or 

               

          		    (iv)       
               the adoption of a resolution by the Company to voluntarily liquidate; the filing
               by or against the Company of any petition in liquidation or any petition for
               relief under the provisions of applicable law for the relief of debtors; or the
               appointment of a special manager, temporary liquidator, temporary receiver or
               trustee to take possession of any material assets of the Company; or the
               placement of attachment on any of the material assets of the Company;
               provided, however, that if such filing, appointment or placement
               were instigated without the Company’s consent, it shall be deemed an Event
               of Acceleration only if not cancelled, removed or stayed within thirty (30)
               days; or the adoption of a resolution by the Company to voluntarily liquidate;
               or 

               

          		    (v)       
               any representation or statement made by the Company in any of the Transaction
               Documents, certificate or written statement delivered by it pursuant thereto,
               is, or proves to have been, incorrect or misleading in any material respect; or 

               

          		    (vi)       
               any event or series of events occur(s) which, in the commercially reasonable
               opinion of Plenus, may have a material adverse effect on the business, condition
               (financial or otherwise), or results of operations of the Company or on the
               ability of the Company to comply with any of its material obligations under any
               of the Transaction Documents; provided, however, that if in
               Plenus’ opinion, actions taken by the Company may annul such adverse
               effect, Plenus shall notify the Company and allow it to take such actions within
               a period of time determined exclusively by Plenus and specified in said notice;
               or 

               

- 6 -

          		    (vii)       
               the Company fails to comply with any of the financial covenants set forth in
               Exhibit G attached hereto; or 

               

          		    (viii)       
               the Company (a) consummates a consolidation or merger of the Company with or
               into another entity, pursuant to which or as a result thereof, the
               Company’s current shareholders will own less than fifty percent (50%) in
               the aggregate of the voting securities of the Company, the new entity or the
               surviving entity (as the case may be) or they will no longer have the power or
               the right to appoint more than fifty percent (50%) of the members of the board
               of directors of such entity; (b) consummates (i) issuance or sale of shares of
               the Company constituting immediately thereafter more than fifty percent (50%) of
               the Company’s outstanding shares (on a fully diluted and as-converted
               basis) to third parties other than the Company’s current shareholders, or
               (ii) sale of a material part of the Company’s assets; (c) consummates an
               initial public offering of any of the Company’s securities, or (d)
               consummates an investment, or series of related investments, in the Company
               resulting in proceeds to the Company in an aggregate amount of at least forty
               million dollars ($40,000,000). 

               

        The
Company shall promptly inform Plenus in writing of the occurrence of any Event of
Acceleration. In addition, upon receipt of a written request to that effect from Plenus,
the Company shall confirm to Plenus that, except as previously notified to Plenus, if
notified, or as notified in such confirmation, if notified, no Event of Acceleration has
occurred. 

         4.       
          Representations and Warranties. 

        The
Company hereby represents and warrants to the Lenders that, except as set forth on a
Disclosure Schedule (the “Disclosure Schedule”) attached hereto as
Schedule 4, as of the date hereof: 

         (i)       
          The Company is a company duly formed and validly existing under the laws of the
          State of Israel. The Company’s current Articles are attached hereto as
          Schedule 4(i). The Company has full corporate power and
          authority to enter into and perform its obligations under the Transaction
          Documents, and all of such documents, upon their execution and delivery,
          constitute legally binding obligations of the Company, enforceable against the
          Company in accordance with their respective terms. 

         (ii)       
          The Company has furnished or made available to Plenus (i) its audited,
          consolidated, financial statements as at, and for the year ended, December 31,
          2004 and (ii) the unaudited, reviewed consolidated quarterly financial
          statements for the period ended June 30, 2005 ((i) and (ii) are collectively
          referred to herein as the “Financial Statements”). The
          Financial Statements are true and correct in all material respects, are in
          accordance with the books and records of the Company and have been prepared in
          accordance with generally accepted accounting principles consistently applied,
          and fairly and accurately present the financial position of the Company as of
          such dates and the results of its operations for the periods then ended. Except
          as reflected in the Company’s unaudited, but reviewed, consolidated
          quarterly financial statements for the period ended June 30, 2005, since June
          30, 2005, there has not been any material adverse change in the assets,
          liabilities, condition (financial or otherwise) or business of the Company,
          including, without limitation: 

- 7 -

		    (a)        any
damage, destruction or loss, whether or not covered by insurance, materially
               and adversely affecting the assets, properties, conditions (financial or
               otherwise), operating results or business of the Company;  

		    (b)        any
waiver by the Company of a valuable right or of a material debt owed to it;  

		    (c)        any
satisfaction or discharge of any material lien, material claim or material
               encumbrance or payment of any material obligation by the Company, except
in the                ordinary course of business;  

		    (d)        any
material change or amendment to a material contract or material arrangement
               by which the Company or any of its assets or properties is bound or
subject;  

		    (e)        any
loans made by the Company to its employees, officers, or directors other
               than travel advances and the like made in the ordinary course of business;  

		    (f)        any
sale, transfer or lease of, except in the ordinary course of business, or
               mortgage or pledge or imposition of lien on, any of the Company’s
material                assets; or  

		    (g)        any
change in the accounting methods or accounting principles or practices
               employed by the Company.  

         (iii)       
          The execution and delivery of the Transaction Documents by the Company, and
          performance of the Company’s obligations thereunder, have been duly and
          validly authorized by all necessary corporate action. 

         (iv)       
          The Company has taken all corporate actions, and has procured all consents and
          approvals, necessary for the issuance of the Warrant; and the Warrant, and the
          Warrant Shares when issued, and with respect to the Warrant Shares when the
          Exercise Price (as defined in the Warrant) is paid, shall be duly authorized,
          validly issued, fully paid, nonassessable and shall not trigger any preemptive
          rights which have not been waived. 

         (v)       
          Neither the execution nor the delivery of any of the Transaction Documents, nor
          the transactions contemplated thereby, will contravene any agreement or negative
          pledge, or, to the Company’s best knowledge, any law, rule, restriction or
          decree to which the Company is subject, and will not result in any such
          violation or be in conflict with or constitute, with or without the passage of
          time and giving of notice, either a default under any such provision,
          instrument, judgment, order, writ, decree or contract or an event that results
          in the creation of any lien, charge or encumbrance upon any assets of the
          Company or, to the knowledge of the Company, the suspension, revocation,
          impairment, forfeiture, or non-renewal of any material permit, license,
          authorization, or approval applicable to the Company, its business or operations
          or any of its assets or properties. 

- 8 -

         (vi)       
          There is no order, writ, injunction or decree of any court, government or
          governmental agency affecting, or, to the knowledge of Company, which may
          affect, the Company or any of its businesses, assets or interests, in a material
          adverse manner; nor is there any action, suit, proceeding or investigation
          pending or, to the Company’s knowledge, currently threatened, against the
          Company, that questions the validity of any of the Transaction Documents, or the
          right of the Company to execute and deliver any such document or to consummate
          the transactions contemplated thereby, or that may result, either individually
          or in the aggregate, in any material adverse changes in the assets, condition,
          affairs or prospects of the Company, financially or otherwise; nor is the
          Company aware that there is any basis for the foregoing. 

         (vii)       
          There are no material claims, guarantees, royalty payments, payments to
          government entities or regulatory bodies, security interests, options or other
          rights outstanding with respect to any of the Company’s assets or
          securities, and the Company has no outstanding loans or financial obligations to
          any third parties, including, but not limited to, any banking obligations, and
          any liens, whether registered or not, on the Company’s bank accounts or
          other assets of the Company. 

         (viii)       
          The Company, to the best of its knowledge, owns and has developed, or has
          obtained the right to use, free and clear of all liens (other than the liens
          created hereunder or by operation of law) and claims, all patents, trademarks,
          domain names and copyrights, and applications, licenses and rights with respect
          to the foregoing, and all trade secrets, including know-how, inventions,
          designs, processes, works of authorship, computer programs and technical data
          and information used and sufficient for use in the conduct of its business as
          now conducted, and as presently proposed to be conducted, and, to the best of
          the Company’s knowledge, without infringing upon or violating any right,
          lien, or claim of others, and the Company has taken security measures customary
          in the industry to protect the secrecy, confidentiality and value of all the
          said intellectual property. A complete list of all patents, trademarks and key
          domain names registered by the Company in any jurisdiction as of the date hereof
          is set forth in Schedule 4(viii) attached hereto. 

         (ix)       
          The Company’s capitalization on a fully diluted basis (including the
          Warrant), as of the date hereof, is as set forth in Schedule
          4(ix) attached hereto. The outstanding Shares of the Company are
          all duly and validly authorized and issued, fully paid and nonassessable, and
          were issued in accordance with every relevant securities laws or pursuant to
          valid exemptions therefrom. There are no outstanding options, warrants, rights
          (including conversion or pre-emptive rights with respect to the Warrant Shares)
          or agreements for the purchase or acquisition from the Company of any shares of
          its share capital. Except as set forth in Schedule 4(ix) and as
          set forth in the Disclosure Schedule, the Company is not a party or subject to
          any agreement or understanding, and to the best of the Company’s knowledge,
          there is no agreement or understanding between any persons and/or entities,
          which affects or relates to the voting rights or to the giving of written
          consents with respect to (1) any of the Company’s securities, or (2)
          appointment or removal of a director of the Company. 

         (x)       
          To the best of the Company’s knowledge, neither any Transaction Document
          (including any schedule or exhibit thereto) nor any documents, certificates or
          other items supplied by the Company with respect to the transactions
          contemplated thereby, contains any untrue statement of a material fact or omits
          to state a material fact necessary to make the statements therein not misleading
          in view of the circumstances in which they were made. 

- 9 -

         (xi)       
          The Company has no subsidiaries (as such term is defined in the Securities Law,
          5728-1968) (“Subsidiaries”). For the purposes of this section
          4, reference to the Company other than in this clause (xi), shall mean both the
          Company and all of its Subsidiaries. 

         (xii)       
          No consent, approval, order or authorization of, or registration, qualification,
          designation, declaration or filing with, any governmental authority on the part
          of the Company is required in connection with the consummation of the
          transactions contemplated by the Transaction Documents, except as set forth in
          the Transaction Documents, the registration of the charges under the Floating
          Charge Agreement and the Fixed Charge Agreement and compliance with the
          Encouragement Law and applicable securities laws. 

         (xiii)       
          Each Material Agreement (as defined below) is in full force and effect, is not
          subject to recession and, to the best knowledge of the Company, there are no
          existing circumstances which would reasonably be expected to materially modify
          the terms thereof. To the Company’s best knowledge, no third party is in
          default under any Material Agreement. A complete list of all of the Material
          Agreements is set forth in Schedule 4 (xiii). The Company
          is not in breach of any obligation under any Material Agreement. 

        For
the purposes of this Agreement, the term “Material Agreement” shall mean
any agreement, understanding, instrument, contract, proposed transaction, judgment,
orders, writ or decree to which the Company is a party or by which it is bound that may
involve (i) obligations (contingent or otherwise) of, or payments to the Company,
exceeding $250,000 each, or (ii) intellectual property rights of the Company and/or
the intellectual property rights of any third party (other than the license of the
Company’s software and products, or those of Company’s suppliers, in the
ordinary course of its business which do not fall within any other category herein and
other than confidentiality or proprietary undertaking executed by the Company’s
employees, consultants, former employees or former consultants), or (iii) distribution
rights, or (iv) provisions restricting the development, manufacture or distribution of the
Company’s products or services, or (v) restrictions or limitations on the
Company’s right to do business or compete in any area or any field with any person,
firm or company, or (vi) indemnification by the Company with respect to infringements
of proprietary rights (other than those entered into in the Company’s ordinary course
of business and which do not fall within any other category herein) or (vii) special
approvals under the Companies Law. Notwithstanding the foregoing, “Material
Agreement” shall not include non-disclosure agreements executed by the Company in the
ordinary course of business. 

        In
addition to the representations and warranties made herein, together with each
Disbursement Request, the Company shall provide to Plenus a certificate signed by the
chief executive officer of the Company, certifying that since the date hereof and until
the date of such Disbursement Request, no event or a series of events occurred which may
have a material adverse effect on the business, condition (financial or otherwise), or
results of operations of the Company or on the ability of the Company to comply with any
of its material obligations under any of the Transaction Documents; provided,
however, that if in Plenus’ opinion, actions taken by the Company may annul such
adverse effect, Plenus shall notify the Company and allow it to take such actions within a
period of time determined exclusively by Plenus and specified in said notice. 

- 10 -

         5.       
          Reporting and Notice Rights; Appointment of an Observer. 

     5.1        Reporting
and Notices. Until the termination of this Agreement, the Company shall provide
Plenus with the following: (i) audited, consolidated annual financial statements
within ninety (90) days after the end of the fiscal year (including an audited annual
balance sheet of the Company as at the end of the fiscal year and the statement of income
and cash flow of the Company for the fiscal year then ended), (ii) unaudited but
reviewed, consolidated, quarterly financial statements within forty five (45) days after
the end of each quarter, (iii) such other data and information as Plenus may reasonably
request, provided such data is reasonably available and not subject to
confidentiality undertakings to third parties, (iv) at least five (5) business days
advanced written notice of a merger or consolidation of the Company, a sale of any
substantial portion of the assets or shares of the Company or any reorganization or
restructuring of the Company having similar effects, or a distribution of dividends, and
(v) at least five (5) business days advanced written notice of a firmly underwritten
initial public offering of the Company’s shares pursuant to a registration statement
filed with the Securities and Exchange Commission under the Securities Act of 1933 or
pursuant to a registration statement filed with a similar authority under any other
jurisdiction. Furthermore, and subject to execution of confidentiality undertakings
Plenus shall have, at reasonable times and upon reasonable notice, full access to all
books and records of the Company and shall be entitled to inspect the properties of the
Company and consult with management of the Company regarding the same, to the extent
necessary or advisable for the purpose of monitoring observance by the Company of its
obligations under the Transaction Documents.  

        Following
the termination of this Agreement, and for as long as the Warrant is outstanding, the
Company shall furnish to the Company true and complete copies of its annual and quarterly
financial statements, simultaneously with furnishing same to any shareholders of the
Company. 

     5.2        Observer.
During the term of this Agreement Plenus shall be entitled to nominate one (1) person on
the Lenders’ behalf (the “Observer”), who shall be entitled,
subject to signing a customary non-disclosure undertaking towards the Company, and
subject to restrictions relating to attorney-client privilege, to attend all meetings of
the Company’s Board of Directors (whether in person, telephonic or otherwise) in a
non-voting observer capacity, concurrently with the members of the Company’s Board
of Directors, and in the same manner and shall be entitled to receive notice of such
meeting and a copy of all materials provided to such members in the context of such
meetings. At the Company’s reasonable request, Plenus shall replace the Observer
with an alternative nominee. The Observer shall be subject to the same fiduciary duties
that shall apply to members of the Board of Directors, provided, however,
that he shall not be deemed to have breached any such duty by relaying to a Lender
information that may be pertinent to its interests under, or in connection with, this
Agreement.  

     5.3        Information.
The Company acknowledges that the Lenders will likely have, from time to time,
information that may be of interest to the Company (“Information”)
regarding a wide variety of matters. Such Information may or may not be known by the
Observer appointed by Plenus. The Company, as a material part of the consideration for
this Agreement, agrees that the Lenders and the Observer shall have no duty to disclose
any Information to the Company or permit the Company to participate in any projects or
investments based on any Information, or to otherwise take advantage of any opportunity
that may be of interest to the Company if it were aware of such Information, and hereby
waives, to the extent permitted by law, any claim based on the corporate opportunity
doctrine or otherwise that could limit the Lenders’ ability to pursue opportunities
based on such Information or that would require the Lenders or the Observer to disclose
any such Information to the Company or offer any opportunity relating thereto to the
Company.  

- 11 -

     5.4        Confidentiality.  

         (a)       
          The Lenders acknowledge that the data and the information obtained by them from
          the Company or anyone on its behalf prior to or during the term of this
          Agreement which relate to the Company are confidential and agree that such data
          and information will not be disclosed by them to any third party nor exploited
          for other projects, investments or the like, without the prior written consent
          of the Company; provided, however, that the Lenders may disclose
          any data and information: (i) in connection with reports to their partners,
          investors, the Participants (as defined in Section 6 hereof) and/or the
          Co-lenders, and (ii) to their directors, officers and employees on a need to
          know basis; on the condition, in each such case, that the recipient of data or
          information shall undertake the same obligations as the Lenders undertake
          hereunder with respect to such data and information. 

    (b)        Except
as required under applicable law, no party shall be entitled to issue a           press
release relating to the terms of the Transaction Documents without           obtaining
the prior written consent of the other parties. The foregoing shall           similarly
apply to any other form of communication, public or nonpublic,           including, but
not limited to, announcements, conferences, advertisements,           professional or
trade publications, mass marketing materials etc.  

         (c)       
          Notwithstanding the aforesaid (i) the Company may disclose the existence and/or
          terms of the Transaction Documents without obtaining the prior written consent
          of the Lenders in the course of a due diligence investigation and/or disclosure
          in connection with the sale of the Company’s securities, and (ii) the
          Lenders may publicly disclose the fact that a lending transaction in the amount
          of $10,000,000 between the Company and the Lenders has been consummated. 

         (d)       
          The confidential undertakings hereunder shall survive termination of this
          Agreement. 

         6.       
          Syndication. 

Notwithstanding any of the provisions
set forth herein, the Company acknowledges and agrees that the Lenders have notified it
that they have syndicated the Loan to the Co-lenders and to the participants specified as
such in Schedule 1 (the “Participants”), and that Plenus shall act as the
lead manager of such syndication on behalf of the Lenders, the Co-lenders and on behalf of
the Participants. Plenus hereby further represents and warrants to the Company that (a)
the other Lender, the Co-lenders and the Participants have agreed that Plenus at its sole
discretion shall determine (i) whether or not to realize any charges and/or pledges over
the assets of the Company created for the benefit of the Lenders, the Co-lenders or the
Participants; (ii) whether or not repayment of any amounts hereunder owed to the Lenders,
the Co-lenders or the Participants are to be accelerated and whether or not an event of a
default pursuant to any of the Transaction Documents has occurred, (iii) any other
decisions that needs to be made with respect to any issue relating to the Transaction
Documents, (b) Plenus has been appointed the attorney-in-fact on behalf of the Lenders,
the Co-lenders and the Participants in connection with all of the foregoing, (c) the other
Lender, the Co-lenders and the Participants have agreed not to take any action to the
contrary, (d) the other Lender, the Co-lenders and the Participants have agreed that in
the event that Plenus should give its consent under this Agreement, such consent shall
bind them as well. 

- 12 -

         7.       
          Miscellaneous. 

     7.1        Further
Action. The parties hereto shall perform such further acts and execute such further
documents as, in Plenus’ and the Company’s opinion, may be reasonably necessary
to carry out and give full effect to the provisions of this Agreement and the intentions
of the parties as reflected hereby. Without derogating from the generality of the
foregoing, the Company shall comply with the terms of, and do all that is reasonably
necessary to maintain in full force and effect, all authorizations, approvals, licenses
and consents required by or under the laws and regulations of the State of Israel and any
other applicable jurisdiction to enable it lawfully to enter into and perform its
obligations under the Transaction Documents, and to ensure the legality, validity,
enforceability or admissibility in evidence of all such documents.  

     7.2        Governing
Law. This Agreement shall be governed by, and construed according to, the laws of the
State of Israel, without regard to the conflict of laws provisions thereof.  

     7.3        Successors
and Assigns. Except as otherwise expressly limited herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors and assigns of the
parties hereto.  

     7.4        Non-assignability.
None of the rights or obligations set forth in, arising under, or created by, this
Agreement may be assigned or transferred by the Company or a Lender without the prior
consent in writing of the other party, which consent shall not be unreasonably withheld.
Anything herein to the contrary notwithstanding, each Lender shall have the right to
assign or transfer its rights and obligations under this Agreement, as long as such
assignment or transfer is not to a competitor of the Company, to any of the following
(each a “Permitted Transferee”): (i) any other entity which controls, is
controlled by, or is under common control with, such Lender, (ii) if the Lender is a
trustee or is appointed to act on behalf of others – to its beneficiaries, (iii) to
the Co-lenders and Participants, or (iv) if the Lender is a general or limited
partnership – to its partners and to affiliated partnerships managed by the same
management company or managing general partner or to an entity which controls, is
controlled by, or is under common control with, such management company or managing
general partner. The foregoing in clauses (i)-(iv) above is subject to the assignee or
transferee assuming in writing the obligations of the assignor or transferor under this
Agreement. The limited right of a Lender to assign and transfer pursuant to this Section
7.4 shall also apply, mutatis mutandis, to each Permitted Transferee.  

    7.5        Entire
Agreement. The Transaction Documents constitute the full and entire understanding and
agreement between the Company and the Lenders with regard to the subject matters thereof.
The preamble, exhibits and schedules hereto constitute an integral part hereof.  

- 13 -

     7.6        Fees
and Taxes. The Company has agreed to share in and contribute a total amount of
seventeen thousand dollars ($17,000), plus VAT, towards the legal fees and other expenses
incurred by Plenus in connection with the transactions contemplated under the Transaction
Documents which amount will be paid by the Company within seven (7) days of receipt of a
tax invoice on or after the Closing Date. The Company shall also be responsible for all
taxes and other compulsory payments to which the Lenders are, or shall be, subject under
the Transaction Documents (other than taxes on the net income of the Lenders imposed in
the jurisdiction in which its principal or lending office under this Agreement is
located). Without derogating from the foregoing, the Company will pay the stamp tax
applicable to the Transaction Documents and any document in connection therewith,
including, without limitation, the Warrant Shares.  

     7.7        Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term
hereof may be waived (either prospectively or retroactively and either generally or in a
particular instance) only with the written consent of the Company and Plenus. No delay or
omission to exercise any right, power, or remedy accruing to any party upon any breach or
default under this Agreement, shall be deemed a waiver of any other breach or default
theretofore or thereafter occurring. All remedies, under this Agreement, by law or
otherwise, afforded to any of the parties, shall be cumulative and not alternative.  

     7.8        Survival.
All covenants made in this Agreement shall continue to remain in full force and effect
for as long as this Agreement is still in effect pursuant to its terms. The Warrant
issued to Plenus Technologies Ltd. hereunder shall survive the expiration or early
termination, for whatever cause of reason, of this Agreement.  

     7.9        Notices.
All notices and other communications required or permitted hereunder to be given to a
party to this Agreement shall be in writing and shall be telecopied (faxed) or mailed by
registered or certified mail, postage prepaid, or by electronic mail, or otherwise
delivered by hand or by messenger as follows:  

        if
to the  Company - to the  Company's  address  set forth  above,  to the  attention  of Oz
Desheh, CFO; 

        if
to a Lender - to its respective addresses, to the attention of the person, set forth in
Schedule 1;  

- 14 -

        or
to such other address, or to the attention of such other person, with respect to a party
as such party shall notify the other parties in writing as above provided. Any notice sent
in accordance with this Section 7.9 shall be effective (i) if mailed, three (3) business
days after mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via
telecopier (fax) or electronic mail, upon transmission and electronic confirmation of
receipt or – if transmitted and received on a non-business day – on the first
business day following transmission and electronic confirmation of receipt. 

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

- 15 -

    7.11        Currency.
The term “dollars” appearing in this Agreement shall mean the legal currency of
the United States of America, and all payments hereunder shall be made in such currency,
unless otherwise agreed in writing by Plenus and the Company.  

IN WITNESS WHEREOF the parties have
signed this Loan Agreement in one or more counterparts as of the date first appearing
above. 

	NEGEVTECH, LTD.

By: /s/ Oz Desheh
——————————————

Its.      10.11.05
——————————————

——————————————

	PLENUS II L.P.

By: 
——————————————

Its.    
——————————————

——————————————

	PLENUS II (D.C.M.), LIMITED PARTNERSHIP

By: 
——————————————

Its.    
——————————————

- 16 -

SCHEDULE 1  

THE LENDERS 

		
		
		
		
		
	Name 	Participation in Loan 
	 
	Plenus II, L.P.	*$8,288,000
	Plenus II (D.C.M.), Limited Partnership	*$1,712,000

THE CO-LENDERS 

Name and Address  

		
		
		
		
		
	1.	Plenus Technologies, Ltd.
	 	16 Abba Eben Avenues
	 	Herzliya Pituach
	 	Israel
	 	Attn: Shlomo Karako
	 	Facsimile: (972-9) 958-6342
	 
	2.	Golden Gate Bridge Fund, L.P
	 	16 Abba Eben Avenues
	 	Herzliya Pituach
	 	Israel
	 	Attn: Shlomo Karako
	 	Facsimile: (972-9) 958-6342
	 
	3.	Bank Leumi Le-Israel B.M.
	 	24-32 Yehuda Halevi St.
	 	Tel Aviv 65546
	 	Israel
	 	Attn: Shirit Turgeman
	 	           Business Division
	 	Facsimile: (972-3) 5661872

THE PARTICIPANTS 

1.  The Investment Corporation of United Mizrachi Bank Ltd.

2.  Union Bank of Israel Ltd.

3.  Industrial Development Bank of Israel Ltd.

4.  D. Partners (BVI)

5.  CMA Technology Venture Partner Limited

6.  D. Partners (ISR)

7.  Israel Continental Bank Ltd.

8.  Nessuah Zannex Ltd.

9.  Mercantile Discount Bank Ltd.

10.  Benleumi Provident Funds

11.  Bank Leumi Le-Israel B.M.

12.  Kahal Ltd.

* Includes the aggregate
participation amount of the Co-lenders and all of the Participants. 

- 17 -

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