Document:

Exhibit 4.26

 

***INDICATES CONFIDENTIAL MATERIAL OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION SEPARATELY WITH A REQUEST
FOR CONFIDENTIAL TREATMENT.

 

DATED   OCTOBER 2011

 

CHINA EASTERN AIRLINES CORPORATION LIMITED

as the seller

 

and

 

AIRBUS S.A.S.

as the buyer

 

and

 

CHINA EASTERN AVIATION IMPORT AND EXPORT
CORPORATION

as the Consenting Party

  

 

 

BUYBACK AGREEMENT

relating to

FIVE AIRBUS A340-300 AIRCRAFT

 

 

 

CT1105153

 

    	 

    	 

    

 

CONTENTS

 

	Clause	 	Page
	 	 	 
	1.	Definitions And Interpretation	1
	 	 	 
	2.	Representations And Warranties	4
	 	 	 
	3.	Agreement To Sell And Purchase	5
	 	 	 
	4.	Conditions Precedent	5
	 	 	 
	5.	Payments	5
	 	 	 
	6.	Engines	8
	 	 	 
	7.	Delivery Procedure And Acceptance	8
	 	 	 
	8.	Delayed Delivery And Failure To Deliver	11
	 	 	 
	9.	Condition Of Aircraft	12
	 	 	 
	10.	Operational Indemnities	12
	 	 	 
	11.	Tax Indemnities	13
	 	 	 
	12.	Liability Insurance	13
	 	 	 
	13.	Termination	14
	 	 	 
	14.	A330 Non-Delivery	14
	 	 	 
	15.	Clause 15	14
	 	 	 
	16.	Manufacturer's Warranties	15
	 	 	 
	17.	Benefit Of Agreement	15
	 	 	 
	18.	Waiver	15
	 	 	 
	19.	Remarketing	15
	 	 	 
	20.	Notices	16
	 	 	 
	21.	Miscellaneous	16
	 	 	 
	22.	Confidentiality	18
	 	 	 
	23.	Law And Jurisdiction	18

 

    	 

    	 

    

 

Buyback
Agreement (the Agreement) made on     October 2011

 

Between:

 

		1.	CHINA EASTERN AIRLINES CORPORATION LIMITED, a
company incorporated and existing under the laws of the People's Republic of China, having its registered office at Hongqiao International
Airport, No. 2550 Hongqiao Road, Shanghai 200335, the People's Republic of China (referred to in this Agreement as China Eastern);

 

		2.	AIRBUS S.A.S., a société par
actions simplifiée incorporated under the laws of France whose registered office is at 1 rond-point Maurice Bellonte
31700 Blagnac Cedex, France (referred to in this agreement as Airbus); and

 

		3.	CHINA EASTERN AVIATION IMPORT AND EXPORT CORPORATION,
a company incorporated and existing under the laws of the People's Republic of China, having its principal place of business
at Hongqiao international Airport, No. 2550 Hongqiao Road, Shanghai 200335, the People's Republic of China (referred to in this
Agreement as the Consenting Party).

 

WHEREAS:

 

China Eastern has agreed to sell the Aircraft
to Airbus or its nominee and Airbus has agreed to purchase or, as the case may be, to procure the purchase of the Aircraft from
China Eastern on the terms and conditions set out herein.

 

IT IS AGREED as follows:

 

		1.	DEFINITIONS AND INTERPRETATION

 

		1.1	Definitions

 

In this Agreement capitalised
words and expressions have the following meanings:

 

A330 Aircraft means each
of the Airbus A330 family aircraft which are the subject of the A330 Purchase Agreement.

 

A330 Purchase Agreement
means, together, the aircraft general terms agreement dated 15 June 2009 and the Airbus A330 family purchase agreement with reference
CT1006772 entered into or to be entered into between China Eastern, the Consenting Party and Airbus for the purchase of new A330
family aircraft.

 

Affiliate means, with
respect to any person or entity, any other person or entity directly or indirectly controlling or controlled by or under common
control with such person or entity or any of the member companies of the same group as such person or entity.

 

Airbus Conditions Precedent
means the documents, evidence and conditions specified in Schedule 5 each in form and substance satisfactory to Airbus.

 

Airbus Indemnitees means
Airbus, any Airbus Nominee and any of their respective Affiliates, shareholders directors, officers, servants, agents and employees.

 

Airbus Nominee means,
at Airbus' election and with regard to each Aircraft, any person or entity that has been nominated by Airbus (and notified to
China Eastern in writing) to accept Delivery of such Aircraft in accordance with the terms and conditions set out in this Agreement.

 

Aircraft means each Airframe
together with the Aircraft Documents, Engines, parts, equipment and accessories relating thereto.

 

Aircraft Documents has
the meaning given to it in paragraph 8(a) of Schedule 9.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	1

    	 

    

 

Airframes means the five
(5) Airbus A340-300 airframes as more particularly described in Part 1 of Schedule 1 (each individually an Airframe).

 

Approved Provider means:

 

		(a)	in the case of a Ferry Flight, the Consenting Party or any Affiliate of China Eastern approved
by Airbus in writing in advance; and

 

		(b)	in the case of a Storage, any person approved by Airbus in writing in advance.

 

Aviation Authority means
the Civil Aviation Administration of China (CAAC) and includes any successor agency to the CAAC.

 

Bill of Sale means the
bill of sale in respect of an Aircraft substantially in the form set out in Schedule 6.

 

Business Day means: (i)
any day other than a Saturday or Sunday on which business of the nature contemplated by this Agreement is carried out in Toulouse,
Shanghai and the location of any Airbus Nominee; and (ii) where used in relation to payments, any days on which banks are open
for business in Toulouse, Shanghai, New York and the location of any Airbus Nominee.

 

Buyback Documents means
this Agreement, the Bills of Sale, the Acceptance Certificates, any Ferry Flight Agreement(s), any Storage Agreement(s), any other
agreement in writing agreed by Airbus and China Eastern to be a Buyback Document and any written agreement amending or supplementing
any of the foregoing.

 

China Eastern Conditions Precedent
means the documents, evidence and conditions specified in Schedule 4, each in form and substance satisfactory to China Eastern.

 

China Eastern Indemnitees
means China Eastern and any of its respective Affiliates, shareholders, directors, officers, servants, agents and employees.

 

Conditions Precedent means,
collectively, the Airbus Conditions Precedent and the China Eastern Conditions Precedent.

 

Delivery means, with regard
to each Aircraft, the delivery of, sale and transfer of title to such Aircraft in accordance with Clause 7 (and the term Delivered
shall be construed accordingly).

 

Delivery Condition means
the conditions set out in Schedule 9.

 

Delivery Date means, with
regard to each Aircraft, the actual date (being a Business Day) on which Delivery of such Aircraft occurs.

 

Delivery Location means
Shanghai Hongqiao International Airport or such other location as Airbus and China Eastern may agree in writing.

 

DGAC means the Direction
générale de I'Aviation civile of France and includes any successor agency to the DGAC.

 

EASA means the European
Aviation Safety Agency and includes any successor agency to the EASA.

 

Engines means, together,
the total twenty (20) CFM56/5C4 engines listed in Part 2 of Schedule 1 and, with regard to a specific Aircraft, the four (4) CFM
International CFM56/5C4 engines installed on or to be installed on that Airframe at Delivery.

 

Ferry Flight has the meaning
given to it in clause 7.10.1.

 

Ferry Flight Agreement has
the meaning given to it in clause 7.10.4.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	2

    	 

    

 

FOD means foreign object
damage.

 

Gross Sale Price shall
have the meaning given to such term in Clause 5.1, as such figure may be adjusted pursuant to Clause 7.2.

 

Lien means any mortgage,
charge, assignment, pledge, lien, statutory right in rem, right of possession, attachment or detention, right of set-off, title
retention arrangement, encumbrance or any other arrangement which has the effect of giving another person any security claim or
interest.

 

Losses and Loss means
as the context may require, costs, expenses, fees, interest, payments, demands, obligations, liabilities, claims, suits, actions,
proceedings, penalties, fines, damages, judgements, orders or other sanctions causing pecuniary or other economic loss.

 

Manufacturer Agreement has
the meaning given to it in paragraph (e) of Schedule 5 to this Agreement.

 

Material Damage means
any incident or accident involving an Aircraft which would in have a material negative effect on the residual value or utility
of the Aircraft.

 

Non-PRC Deduction has
the meaning given to it in Clause 5.6.1.

 

Non-PRC Taxes means any
and all Taxes imposed from time to time by any political or government entity or taxation authority outside the PRC.

 

PRC means the People's
Republic of China.

 

PRC Deduction has the
meaning given to it in Clause 5.5.1.

 

PRC Taxes means any and
all Taxes imposed from time to time by any political or government entity or taxation authority in the PRC.

 

Scheduled Delivery Date means
each of the dates set out in Clause 7.1, such date being a Business Day (otherwise the Scheduled Delivery Date shall be the next
occurring Business Day).

 

Storage has the meaning
given to it in clause 7.10.2

 

Storage Agreement has
the meaning given to it in clause 7.10.4.

 

Taxes means any and all
taxes, (including, without limitation, gross receipts, franchise, capital, preferences, sales, rentals, use, turnover, property
(tangible and intangible), documentary, excise, stamp duties or value added taxes), levies, imposts, duties, charges, surcharges,
assessments or withholdings of any nature whatsoever together with any and all penalties, fines, additions to tax and interest
thereon or computed with reference thereto.

 

Termination Event means
any of the events or circumstances set out in Clause 13.1.

 

Total Loss means, with respect to an Aircraft:

 

		(a)	the actual, constructive, compromised or arranged total loss of the Aircraft agreed by insurers;

 

		(b)	if the Aircraft is destroyed, damaged beyond economic repair or becomes unfit for normal use for
any reason;

 

		(c)	if the Aircraft is requisitioned for title, confiscated, detained, forfeited or compulsorily purchased;
or

 

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Reference CT1105153	3

    	 

    

 

		(d)	if the Aircraft is requisitioned for use or hire, hi-jacked, stolen or disappears, in each case,
for sixty (60) days or longer.

 

Undelivered
A330 has the meaning given to it in Clause 14.1.

 

Undelivered Aircraft means
each Aircraft in respect of which sale by China Eastern and purchase by Airbus or by an Airbus Nominee, as the case may be, under
this Agreement has not yet been completed and in respect of which no Bill of Sale has been signed and delivered.

 

US Dollars
and US$ shall mean the lawful currency of the United States.

 

		1.2	Interpretation

 

In this Agreement,
unless the contrary intention is stated, a reference to:

 

		(i)	each of China Eastern, Airbus or any other person includes, without prejudice to the provisions
of this Agreement restricting transfer or assignment, any successor, assignee or transferee;

 

		(ii)	words importing the plural shall include the singular and vice versa;

 

		(i)	any document shall include that document as amended, novated, assigned or supplemented;

 

		(ii)	a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement; and

 

		(iii)	any law, or to any specified provision of any law, is a reference to such law or provision as amended,
substituted or re enacted.

 

Clause and Schedule headings
are for ease of reference only and shall not modify, define, expand or limit any of the terms or provisions of this Agreement.

 

		2.	REPRESENTATIONS AND WARRANTIES

 

		2.1	China Eastern Representations and Warranties

 

China Eastern represents and
warrants to Airbus on the terms set out in Schedule 2. The representations and warranties in Schedule 2 will survive the execution
of this Agreement and will be deemed to be repeated by China Eastern on the date hereof and on the Delivery Date of each
Aircraft with reference to the facts and circumstances then existing.

 

		2.2	Airbus' Representations and Warranties

 

Airbus represents and warrants
to China Eastern on the terms set out in Schedule 3. The representations and warranties in Schedule 3 will survive the execution
of this Agreement and will be deemed to be repeated by Airbus on the date hereof and on the Delivery Date of each Aircraft with
reference to the facts and circumstances then existing.

 

		2.3	No Prejudice

 

The rights of Airbus and China
Eastern in relation to any misrepresentation or breach of warranty by Airbus or, as the case may be, China Eastern shall not be
prejudiced by any investigation by or on behalf of Airbus or, as the case may be, China Eastern into the affairs of such other
party.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	4

    	 

    

 

		3.	AGREEMENT TO SELL AND PURCHASE

 

		3.1	Subject to the terms and conditions of this Agreement, China Eastern agrees to sell each Aircraft
to Airbus or, if applicable, to an Airbus Nominee and Airbus agrees to purchase or, as the case may be, to procure the purchase
of each Aircraft from China Eastern by such Airbus Nominee in the Delivery Condition.

 

		3.2	Other than in respect of any transfer made in accordance with Clause 17, Airbus will remain bound
by the terms of this Agreement to the extent that any Airbus Nominee fails to perform its obligations hereunder.

 

		4.	CONDITIONS PRECEDENT

 

		4.1	China Eastern Conditions Precedent

 

		4.1.1	The obligation of China Eastern to sell each Aircraft shall be subject to fulfilment of the China
Eastern Conditions Precedent set out in Schedule 4, on or prior to the date for fulfilment of such China Eastern Conditions Precedent
(except to the extent that China Eastern agrees in writing in its absolute discretion to waive or defer any such condition).

 

		4.1.2	The China Eastern Conditions Precedent have been inserted for the benefit of China Eastern and
may be waived in writing, in whole or in part and with or without conditions, by China Eastern without prejudicing the right of
China Eastern to receive fulfilment of such conditions, in whole or in part, at any time thereafter.

 

		4.2	Airbus Conditions Precedent

 

		4.2.1	The obligation of Airbus to purchase or, as the case may be, to procure the purchase by the Airbus
Nominee of each Aircraft from China Eastern shall be subject to fulfilment of the Airbus Conditions Precedent set out in Schedule
5, on or prior to the date for fulfilment of such Airbus Conditions Precedent (except to the extent that Airbus agrees in writing
in its absolute discretion to waive or defer any such condition).

 

		4.2.2	The Airbus Conditions Precedent have been inserted for the benefit of Airbus and may be waived
in writing, in whole or in part and with or without conditions, by Airbus without prejudicing the right of Airbus to receive fulfilment
of such conditions, in whole or in part, at any time thereafter.

 

		4.3	Non-fulfilment of Conditions Precedent

 

If any of the Conditions Precedent
remain outstanding on an Aircraft's Scheduled Delivery Date and are not waived or deferred in writing by China Eastern or, as the
case may be, Airbus, the relevant provisions of Clause 7.2 shall apply.

 

		5.	PAYMENTS

 

		5.1	Gross Sale Price

 

***

 

		5.2	Clause 5.2

 

Intentionally left blank.

 

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Reference CT1105153	5

    	 

    

 

		5.3	Payment of Gross Sale Price

 

***

 

		5.4	Taxes

 

		5.4.1	***

 

		5.4.2	***

 

		5.4.3	***

 

		5.4.4	***

 

		5.5	No gross-up - Airbus

 

		5.5.1	***

 

		5.5.2	***

 

		5.5.3	***

 

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Reference CT1105153	6

    	 

    

 

		5.6	Gross-up - Airbus

 

		5.6.1	***

 

		5.6.2	***

 

		5.7	No gross-up - China Eastern

 

		5.7.1	***

 

		5.7.2	***

 

		5.7.3	***

 

		5.8	Gross-up - China Eastern

 

		5.8.1	***

 

		5.8.2	***

 

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Reference CT1105153	7

    	 

    

 

***

 

		5.9	Payments

 

Airbus shall pay or, as the
case may be, procure the payment of each Gross Sale Price in US Dollars for value on or before Delivery and in immediately available
funds by wire transfer to the following account:

 

	Beneficiary:	CHINA EASTERN AVIATION IMP. & EXP. CORP.
	Account Number:	4033602-8300-00715618093014
	Receiving Bank:	BANK OF CHINA SHANGHAI BRANCH
	SWIFT Address:	BKCHCNBJ300

 

If any payment would otherwise
be due on a non Business Day, it will be due on the next succeeding Business Day.

 

		6.	ENGINES

 

Each Aircraft shall be Delivered
with four (4) of the Engines listed in Part 2 of Schedule 1 installed. The terms of paragraph 2(d) of Schedule 9 apply to Engine
selection.

 

		7.	DELIVERY PROCEDURE AND ACCEPTANCE

 

		7.1	Scheduled Delivery Dates

 

Airbus and China Eastern agree
that the Aircraft shall be Delivered on the following dates (each a Scheduled Delivery Date):

 

(a)       for the Aircraft with
MSN 129,          ***

 

(b)       for the Aircraft with
MSN 131,          ***

 

(c)       for the Aircraft with
MSN 141,          ***

 

(d)       for the Aircraft with
MSN 161,          ***

 

(e)       for the Aircraft with
MSN 182,          ***

 

		7.2	Late Delivery

 

***

 

		7.2.1	Excusable and Non-excusable Delay

 

***

 

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Reference CT1105153	8

    	 

    

 

***

 

		7.2.2	Fees

 

***

 

		7.2.3	Renegotiation

 

***

 

		7.3	Delivery Condition

 

Airbus' obligation to purchase
each Aircraft is conditional upon each Aircraft complying on its Delivery Date with the Delivery Condition.

 

		7.4	Inspection

 

***

 

		7.5	Delivery

 

***

 

		7.6	Acceptance

 

***

 

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Reference CT1105153	9

    	 

    

 

		7.7	Transfer of Title

 

With regard to each Aircraft, upon:

 

		7.7.1	***

 

		7.7.2	***
	 	 	 
	 	***

 

		7.8	Risk Passing

 

***

 

		7.9	Exportation & Customs Clearance

 

***

 

		7.10	Post-Delivery Ferry Flights / Storage

 

		7.10.1	***

 

		7.10.2	***

 

		7.10.3	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	10

    	 

    

 

		(b)	***

 

		(c)	***

 

		(d)	***

 

		(e)	***

 

		(f)	***

 

		(g)	***

 

		7.10.4	***

 

		8.	DELAYED DELIVERY AND FAILURE TO DELIVER 

 

		8.1	Total Loss before Delivery

 

***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	11

    	 

    

 

 ***

 

		9.	CONDITION OF AIRCRAFT

 

		9.1	Disclaimers

 

SUBJECT ALWAYS TO THE TERMS AND
CONDITIONS SET OUT IN THIS AGREEMENT AND TO EACH AIRCRAFT BEING IN THE REQUIRED DELIVERY CONDITION, AIRBUS AGREES THAT AS BETWEEN
AIRBUS AND CHINA EASTERN EACH AIRCRAFT AND EACH PART THEREOF IS TO BE SOLD AND PURCHASED ON AN AS IS, WHERE IS BASIS AS
AT ITS DELIVERY DATE, AND, EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT AND THE OTHER BUYBACK DOCUMENTS, NO TERM, CONDITION, WARRANTY,
REPRESENTATION OR IN RESPECT OF THE AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONDITION, DESIGN, OPERATION, DESCRIPTION, MERCHANTABILITY
OR FITNESS FOR USE OR PURPOSE OF SUCH AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS (WHETHER
OR NOT DISCOVERABLE), AS TO THE COMPLETENESS OR CONDITION OF THE TECHNICAL RECORDS, OR AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, COPYRIGHT, DESIGN, OR OTHER PROPRIETARY RIGHTS; AND, EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT AND THE OTHER BUYBACK
DOCUMENTS, ALL CONDITIONS, WARRANTIES AND REPRESENTATIONS (OR OBLIGATION OR LIABILITY, IN CONTRACT OR IN TORT) IN RELATION TO ANY
OF THOSE MATTERS, EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.

 

		9.2	Waiver

 

AIRBUS HEREBY WAIVES, AS BETWEEN
ITSELF (ON THE ONE HAND) AND CHINA EASTERN (ON THE OTHER HAND), ALL OF ITS RIGHTS IN RESPECT OF ANY WARRANTY OR REPRESENTATION,
ON THE PART OF CHINA EASTERN AND ALL CLAIMS AGAINST CHINA EASTERN HOWSOEVER AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT
OF THE OPERATION OR PERFORMANCE OF EACH AIRCRAFT, THIS AGREEMENT OR THE OTHER BUYBACK DOCUMENTS, PROVIDED ALWAYS THAT THIS WAIVER
SHALL NOT APPLY TO THE WARRANTIES AND REPRESENTATIONS GIVEN BY CHINA EASTERN TO AIRBUS IN ANY OF THE BUYBACK DOCUMENTS.

 

		10.	OPERATIONAL INDEMNITIES

 

		10.1	***

 

		(i)	***

 

		(ii)	***

 

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Reference CT1105153	12

    	 

    

 

		(iii)	***

 

		10.2	***

 

		10.3	***

 

		11.	TAX INDEMNITIES

 

		11.1	***

 

		11.2	***

 

		11.3	***

 

		12.	LIABILITY INSURANCE

 

***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	13

    	 

    

 

		13.	TERMINATION

 

		13.1	The termination of the A330 Purchase Agreement for any reason in accordance with its terms with
respect to any or all of the A330 Aircraft shall be a Termination Event and shall constitute a repudiatory breach by China
Eastern of this Agreement.

 

		13.2	If a Termination Event occurs, Airbus may, at its option and without prejudice to any other rights
it may then have, at any time thereafter terminate all or part this Agreement and any other Buyback Documents (including, without
limitation, with respect to any or all Undelivered Aircraft), whereupon all or part (as applicable) of this Agreement and any such
Buyback Documents shall be of no further force and effect

 

		13.3	Airbus and China Eastern each agree and acknowledge that the exercise (or non-exercise) of any
of the abovementioned rights and remedies shall in no way prejudice Airbus' (or any of Airbus' Affiliates') or China Eastern's
(or any of China Eastern's Affiliates') entitlement to exercise any of the rights and remedies that they may have under any Manufacturer
Agreement with regard to Losses that may be suffered or otherwise incurred as a result of any breach of the terms thereof by China
Eastern (or, as the case may be, any of its Affiliates) or Airbus (or, as the case may be, any of its Affiliates), each of which
shall remain at all times in full force and effect in accordance with its terms.

 

	14.	A330 NON-DELIVERY – RETURN OF ADVANCED CONCESSION

 

		14.1	***

 

		14.2	***

 

		15.	CLAUSE 15

 

Intentionally left blank.

 

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Reference CT1105153	14

    	 

    

 

		16.	MANUFACTURER'S WARRANTIES

 

		16.1	China Eastern hereby agrees to procure the assignment to Airbus or, as the case may be, to the
Airbus Nominee of any remaining and assignable warranties of any manufacturer, vendor or repairer which may exist at Delivery.

 

		16.2	If it is not possible for China Eastern to assign certain remaining warranties of any manufacturer,
vendor or repairer which may exist at Delivery, China Eastern agrees to use its best endeavours to procure that the benefit of
such warranties is transferred to or is otherwise accounted for to Airbus or, as the case may be, to the Airbus Nominee.

 

		17.	BENEFIT OF AGREEMENT

 

Airbus shall
at any time have (i) the right to nominate an Airbus Nominee to act as buyer in accordance with the terms and conditions set out
in this Agreement and/or (ii) the right to assign, sell, transfer or otherwise dispose of its rights and obligations under this
Agreement and the other Buyback Documents to any person with the consent of China Eastern (not to be unreasonably withheld). The
agreements contained in this Agreement are, without prejudice to China Eastern's right to nominate an Approved Provider under Clause
7.10, personal to China Eastern and China Eastern may not assign, transfer, novate or otherwise dispose of any of its rights or
obligations under this Agreement or the Buyback Documents without the prior written agreement of Airbus.

 

		18.	WAIVER

 

		18.1	The failure of any party to enforce at any time any of the provisions of this Agreement, or to
exercise any option herein provided, or to require at any time performance by the other party of any of the provisions herein,
shall In no way be construed to be a present or future waiver of such provision nor in any way affect the validity of this Agreement
or any part thereof or the right of the other party thereafter to enforce each and every such provision.

 

		18.2	The waiver by any party to any provision, condition or requirement of this Agreement (otherwise
than by express waiver or a variation in writing) shall not constitute a waiver of any future obligation to comply with such provision,
condition or requirement.

 

		18.3	The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by applicable law.

 

		19.	REMARKETING

 

***

 

		(a)	***

 

		(b)	***

 

		(c)	***

 

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Reference CT1105153	15

    	 

    

 

*** 

 

		20.	NOTICES

 

All notices under or In connection
with this Agreement will, unless otherwise stated, be given in writing by letter or facsimile. Any such notice is deemed effectively
to be given as follows:

 

		20.1	if by letter, when delivered; and

 

		20.2	if by facsimile, when transmitted and full transmission has been confirmed by the sender's fax machine.

 

The address and facsimile numbers
of China Eastern and Airbus are as follows:

 

	China Eastern:	China Eastern Airlines Corporation Limited
	 	 
	Address:	Hongqiao International Airport
	 	No. 2550 Hongqiao Road
	 	Shanghai 200335
	 	People's Republic of China
	 	 
	Attention:	Manager - Fleet Planning
	Facsimile:	+86 21 62686393
	 	 
	Airbus:	Airbus S.A.S.
	Address:	1 rond-point Maurice Bellonte
	 	31707 Blagnac CEDEX
	 	France
	 	 
	Attention:	Vice President - Asset Management
	Facsimile:	+33 5 61 93 30 37

 

		21.	MISCELLANEOUS

 

		21.1	Severability

 

If a provision of this Agreement
or any of the other Buyback Documents is or becomes illegal, invalid or unenforceable in any jurisdiction that will not affect:

 

		21.1.1	the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement
or the Buyback Documents; or

 

		21.1.2	the legality, validity or enforceability in any other jurisdiction of that or any other provision
of this Agreement or the Buyback Documents.

 

		21.2	Expenses

 

***

 

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		21.3	Sole and Entire Agreement

 

This Agreement contains the
entire agreement between Airbus and China Eastern in relation to the matters referred to herein and supersedes any previous understandings,
commitments or representations whatsoever oral or written. No provision of this Agreement may be changed, waived or discharged
except by an instrument in writing signed by China Eastern and Airbus (or by their duly authorised representatives or agents).

 

		21.4	Language

 

All notices to be given under
this Agreement will be in English. All other documents delivered to China Eastern by Airbus or, as the case may be, delivered
to Airbus by China Eastern, pursuant to this Agreement will (unless otherwise expressly stated herein) be in English, or
if not in English, will be accompanied by a certified English translation. If there is any inconsistency between the English version
of this Agreement and any version in any other language, the English version will prevail.

 

		21.5	Time of the Essence

 

The time stipulated in this
Agreement for the performance of the payment obligations of Airbus or China Eastern, as the case may be, under this Agreement shall
be of the essence of this Agreement.

 

		21.6	Counterparts

 

This Agreement may be executed
in counterparts, each of which will constitute one and the same document.

 

		21.7	Further Assurances

 

***

 

		21.8	Third Party Rights

 

***

 

		21.9	No Brokers

 

***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	17

    	 

    

 

		22.	CONFIDENTIALITY

 

		22.1	This Agreement (and its existence) and any data exchanged between China Eastern and Airbus
                                                                   for the fulfilment of their respective obligations under this Agreement (together the Confidential Information) shall
                                                                   be treated by the parties as confidential and shall not be released in whole or in part to any third party except:

 

		22.1.1	as may be required by law;

 

		22.1.2	to appointed legal, tax or accounting advisors who are bound by a professional duty of confidentiality
and who need to be involved for the implementation of the transactions contemplated by this Agreement;

 

		22.1.3	by Airbus to an Airbus Nominee; and

 

		22.1.4	otherwise in accordance with Clause 22.2.2 below.

 

		22.2	Without prejudice to the foregoing, the parties agree:

 

		22.2.1	not to make any press release concerning the Confidential Information without the prior written
consent of the other party hereto; and

 

		22.2.2	that each party shall enter
                                                                      into consultations with the others reasonably in advance
                                                                      of any required disclosure of Confidential Information to
                                                                      a third party (the Receiving Party) and that
                                                                      any subsequent disclosure to a Relevant Party shall be subject
                                                                      to written agreement between China Eastern and Airbus, including
                                                                      in particular, but not limited to, the following details:

 

		 	(a)	the contact details of the Receiving Party; and

 

		 	(b)	the nature and extent of the Confidential Information being
disclosed.

 

		22.3	In the case of a disclosure
                                                             of Confidential Information by China Eastern in connection with any
                                                             filing required to be made by China Eastern with any governmental
                                                             or regulatory agency, China Eastern shall use its best efforts to
                                                             limit the disclosure of the Confidential Information to the minimum
                                                             that is legally required. China Eastern agrees that prior to any
                                                             such disclosure or filing, Airbus and China Eastern shall jointly
                                                             review and agree on the Confidential Information to be filed or disclosed.

 

		22.4	The provisions of this Clause 22 shall survive any termination of this Agreement for a period of
twelve (12) years after the date of Delivery of the last Aircraft to be delivered under this Agreement.

 

		23.	LAW AND JURISDICTION

 

		23.1	This Agreement and the relationship between the parties shall be governed by and construed in accordance
with English law.

 

		23.2	The courts of England are to have jurisdiction to settle any disputes arising under or in connection
with this Agreement and each party submits to the non-exclusive jurisdiction of the English courts with respect to such disputes

 

		23.3	Each party:

 

		23.3.1	waives objection to the English courts oh grounds of forum non conveniens or otherwise as
regards proceedings in connection with this Agreement;

 

		23.3.2	agrees that a judgment or order of an English court in connection with this Agreement is conclusive
and binding on it and may be enforced against it in the courts of any other jurisdiction.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	18

    	 

    
 

		23.4	Without prejudice to any other mode of service allowed
under any relevant law:

 

		23.4.1	China Eastern and the Consenting Party appoint China Eastern Airlines London Office of 37-39 George
Street, London, W1U 3QD, United Kingdom as their agent for service of process in relation to any proceedings before the English
courts in connection with any Buyback Document; and

 

		23.4.2	Airbus appoints Airbus Operations Limited, New Filton House, Filton, Bristol, BS99 7AR, United
Kingdom as its agent for service of process in relation to any proceedings before the English courts in connection with any Buyback
Document; and

 

all parties agree that failure
by a process agent to notify them of the process will not invalidate the proceedings concerned.

 

IN WITNESS whereof this Agreement has
been signed on the day and year first above written.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	19

    	 

    

 

SCHEDULE 1

 

PART 1 - AIRCRAFT

 

	Aircraft 1	 
	 	 
	Airframe Make/Model:	Airbus A340-300
	Manufacturer's Serial Number:	129
	Engine Make/Model:	Four (4) CFM56/5C4 engines
	 	 
	Aircraft 2	 
	 	 
	Airframe Make/Model:	Airbus A340-300
	Manufacturer's Serial Number:	131
	Engine Make/Model:	Four (4) CFM56/5C4 engines
	 	 
	Aircraft 3	 
	 	 
	Airframe Make/Model:	Airbus A340-300
	Manufacturer's Serial Number	141
	Engine Make/Model:	Four (4) CFM56/5C4 engines
	 	 
	Aircraft 4	 
	 	 
	Airframe Make/Model:	Airbus A340-300
	Manufacturer's Serial Number:	161
	Engine Make/Model:	Four (4) CFM56/5C4 engines
	 	 
	Aircraft 5	 
	 	 
	Airframe Make/Model:	Airbus A340-300
	Manufacturer's Serial Number:	182
	Engine Make/Model:	Four (4) CFM56/5C4 engines

 

PART 2- ENGINES

 

	Engine Make/Model:	CFM56/5C4
	 	 
	Engine Serial Numbers:	 
	 	 
	741 558	741 438
	741 445	741 480
	741 557	741 623
	741 651	741 479
	741 478	741 464
	741 620	741 565
	741 444	741 443
	741 559	741 446
	741 465	741 481
	741 619	741 621

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	20

    	 

    
 

SCHEDULE 2

 

CHINA EASTERN REPRESENTATIONS AND WARRANTIES

 

China Eastern represents and warrants to Airbus
that:

 

		(a)	Status: China Eastern is a company duly incorporated under the laws of China;

 

		(b)	Power and authority: China
                                                             Eastern has the power to: (i) enter into and perform and has taken
                                                             all necessary action to authorise the entry into, performance and
                                                             delivery of this Agreement and the other Buyback Documents to which
                                                             it is a party; (ii) to own its assets; and (iii) carry on
                                                             its business as it is being conducted;

 

		(c)	Legal validity: this Agreement and the other Buyback Documents to which it is a party constitute,
or when entered into will constitute, China Eastern's legal, valid and binding obligation;

 

		(d)	Non-conflict: neither the execution and delivery of this Agreement or any of the other Buyback
Documents to which China Eastern is party, nor the performance of any of the obligations contained herein or therein will contravene
any law, judgement or order by which China Eastern or any of its assets is bound or affected; and

 

		(e)	No immunity:

 

		(i)	China Eastern is subject to civil commercial law with respect to its obligations under
                                                                  this Agreement and the other Buyback Documents to which China Eastern is party; and

 

		(ii)	neither China Eastern nor any of its assets is entitled to any right of immunity, and
                                                                   the entry into and performance of this Agreement and the other Buyback Documents to which it is party by China Eastern
                                                                   constitute private and commercial acts.

 

		(f)	No Liens: at the Delivery the Aircraft shall be free and clear of all Liens.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	21

    	 

    

 

SCHEDULE 3

 

AIRBUS REPRESENTATIONS AND WARRANTIES

 

Airbus represents and warrants
to China Eastern that:

 

		(g)	Status: Airbus is a company
                                                           duly incorporated under the laws of France.

 

		(h)	Power and authority: Airbus
                                                           has the power to enter into and perform, and has taken all necessary
                                                           corporate action to (i) authorise the entry into, performance and delivery
                                                           of this Agreement and the other Buyback Documents to which it is party;
                                                           (ii) own its assets; and (iii) carry on its business as it is
                                                           being conducted.

 

		(i)	Legal validity: this Agreement and the other Buyback Documents to which it is a party
                                                                  constitutes, or when entered into will constitute, Airbus' legal, valid and binding obligations enforceable against
                                                                  Airbus in accordance with the terms hereof and thereof;

 

		(j)	Non-conflict: neither the execution and delivery of this Agreement or any of the other Buyback
Documents to which Airbus is party, nor the performance of any of the obligations contained herein or therein will contravene any
law, judgement or order by which Airbus or any of its assets are bound or affected;

 

		(k)	No immunity:

  

		(i)	Airbus is subject to civil commercial law with respect to its obligations under this Agreement and the other Buyback Documents to which it is a party; and

 

		(ii)	neither Airbus nor any of its assets is entitled to any right of immunity, and the entry
                                                                   into and performance by Airbus of this Agreement and the other Buyback Documents to which it is a party constitute
                                                                   private and commercial acts.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	22

    	 

    

 

SCHEDULE 4

 

CHINA EASTERN CONDITIONS PRECEDENT

 

The obligation of China Eastern to sell
and deliver an Aircraft on the terms and conditions set out in this Agreement is conditional upon satisfaction in full, on the
Delivery Date, of the following conditions, each in form and substance satisfactory to China Eastern:

 

	(a)	***
	 	 
	(b)	***
	 	 
	(c)	***
	 	 
	(d)	***
	 	 
	(e)	***
	 	 
	(f)	***
	 	 
	(g)	***
	 	 
	(h)	***
	 	 
	(i)	***
	 	 
	(j)	***
	 	 
	(k)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	23

    	 

    

 

SCHEDULE 5

 

AIRBUS CONDITIONS PRECEDENT

 

The obligation of Airbus to purchase or
procure the purchase of an Aircraft on the terms and conditions set out in this Agreement is conditional upon satisfaction in full,
on the Delivery Date (unless otherwise stated), of the following conditions, each in form and substance satisfactory to Airbus:

 

	(a)	***
	 	 
	(b)	***
	 	 
	(c)	***
	 	 
	(d)	***
	 	 
	(e)	***
	 	 
	(f)	***
	 	 
	(g)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	24

    	 

    

 

	(h)	***
	 	 
	(i)	***
	 	 
	(j)	***
	 	 
	(k)	***
	 	 
	(l)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	25

    	 

    

 

SCHEDULE 6

 

FORM OF BILL OF SALE

 

BILL OF SALE

 

For valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, China Eastern Airlines Corporation Limited (China Eastern), owner of the
aircraft described below (hereinafter referred to as the Aircraft):

 

	1.	one (1) Airbus A340-300 aircraft bearing manufacturer's serial number [          ];
	 	 
	2.	four (4) CFM56/5C4 engines bearing manufacturer's serial numbers [          ], [          ], [          ] and [          ];
	 	 
	3.	all equipment, accessories and parts belonging to, installed in or appurtenant to such Aircraft; and
	 	 
	4.	the documents, data and records relating to the Aircraft,

 

does hereby sell, grant, transfer and deliver
all its right, title and interest in and to the Aircraft with full title guarantee to [         ] (the Buyer) to have and hold forever
free and clear of all Liens.

 

China Eastern hereby warrants to the Buyer,
and its successors and assigns, that there is hereby conveyed to the Buyer, with full title guarantee, all of China Eastern's
right, title and interest in and to the Aircraft free and clear of all Liens and that it will warrant and defend such title
forever against all claims and demands whatsoever.

 

Unless otherwise defined herein, all capitalised
terms and expressions used in this Bill of Sale shall have the meanings given in the aircraft sale agreement dated [            ] 2011 and
made between China Eastern, China Eastern Aviation Import and Export Corporation and Airbus S.A.S. (the Agreement).

 

Except as otherwise provided herein or
pursuant to the Agreement, the Aircraft is sold on the basis of an as is, where is sale.

 

This Bill of Sale is governed by English
law.

 

IN WITNESS whereof, China Eastern has caused
this Bill of Sale to be duly executed at [         ] am/pm in [         ] this [         ] day of [         ] 2012

 

	SIGNED by a duly authorised representative	)	 	 
	for and on behalf of	)	 	 
	 	)	 	 
	CHINA EASTERN AIRLINES	)	 	 
	CORPORATION LIMITED	)	 	 
	 	)	 	 
	 	 	 	 
	in the presence of:	 	 	 
	 	 	 	 
	Name:	 	 	 
	Address:	 	 	 

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	26

    	 

    

 

SCHEDULE 7

 

FORM OF ACCEPTANCE CERTIFICATE

 

ACCEPTANCE CERTIFICATE RELATING TO ONE
(1) A340-300 AIRCRAFT,

MANUFACTURER'S SERIAL NUMBER [         ] (the Aircraft)

 

[       
] (the Buyer) hereby certifies that pursuant to the buyback agreement dated [       
] 2011 between China Eastern Airlines Corporation Limited, China Eastern Aviation Import and Export Corporation and Airbus S.A.S.
(the Agreement):

 

		(a)	the Buyer has inspected the Aircraft, found it to be complete and satisfactory to it and the Aircraft
conforms with the description and is in the condition and equipped as required by the Agreement;

 

		(b)	the Buyer has accepted delivery of the Aircraft in the Delivery Condition; and

 

		(c)	the Buyer has inspected, found to be complete and satisfactory to it and has received all of the
documents, data and records relating to the Aircraft

 

Capitalised terms and expressions
used in this Acceptance Certificate shall have the meanings given in the Agreement

 

Date: [         ] 2012

 

	SIGNED by a duly authorised representative	)	 	 
	for and on behalf of	)	 	 
	 	)	 	 
	[           ]	)	 	 
	 	)	 	 
	 	)	 	 
	 	 	 	 
	in the presence of:	 	 	 
	 	 	 	 
	Name:	 	 	 
	Address:	 	 	 

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	27

    	 

    

 

SCHEDULE 8

 

Intentionally left blank.

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	28

    	 

    

 

SCHEDULE 9

 

DELIVERY CONDITION

 

At delivery of any Aircraft (the Delivery)
the Aircraft will comply with each of the conditions set out below (the Delivery Condition). The procedures for ascertaining
if the Aircraft comply with the Delivery Condition are set out in paragraphs 10 to 13 hereunder. Except if and where otherwise
expressly stated, the Delivery Condition shall be met at China Eastern's cost

 

All references to Airbus hereunder, in
its capacity as buyer of the Aircraft, shall be deemed also to include reference to any Airbus Nominee.

 

Capitalised terms not otherwise defined
in this Schedule 9 shall have the same meanings as are ascribed to them in Clause 1.1 of the Agreement.

 

		1.	Maintenance

 

***

 

		2.	General Condition

 

The Aircraft shall meet the following
requirements:

 

	(a)	***
	 	 
	(b)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	29

    	 

    

 

	(c)	***
	 	 
	(d)	***
	 	 
	(e)	***
	 	 
	(f)	***

 

		3.	Certificate of Airworthiness Matters

 

On the Delivery Date the Aircraft
shall:

 

	(a)	***
	 	 
	(b)	***

 

		4.	Export and Deregistration of the Aircraft

 

***

 

		5.	Condition of Aircraft

 

The Aircraft shall on the Delivery
Date meet the requirements and shall have such hours and cycles remaining as set forth below: 

 

	(a)	***
	 	 
	(b)	***
	 	 
	(c)	***

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	30

    	 

    

 

	(d)	***
	 	 
	(e)	***
	 	 
	(f)	***
	 	 
	(g)	***

 

		6.	Condition of Engines

 

Each Engine shall comply with the
following conditions:

 

	(a)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	31

    	 

    

 

	(b)	***
	 	 
	(c)	***
	 	 
	(d)	***

 

		7.	Condition of APU

 

	(a)	***
	 	 
	(b)	***
	 	 
	(c)	***

 

		8.	Aircraft Documents

 

	(a)	***
	 	 
	(b)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	32

    	 

    

  

	(c)	***

  

		9.	Ground Lock Safety Pins and covers

 

***

  

		10.	Ground Inspection by Airbus

 

	(a)	***
	 	 
	(b)	***

 

		11.	Operational Ground Check

 

***

 

		12.	Engine Performance Check

 

***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	33

    	 

    

 

*** 

 

		13.	Acceptance Flight

 

	(a)	***
	 	 
	(b)	***
	 	 
	(c)	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	34

    	 

    

 

SCHEDULE 10

 

AIRCRAFT DOCUMENTS

 

		A.	OPERATIONAL & TECHNICAL MANUALS

 

Complete set of following manuals:

 

	1.	***
	 	 
	2.	***
	 	 
	3.	***
	 	 
	4.	***
	 	 
	5.	***
	 	 
	6.	***

 

		B.	TECHNICAL RECORDS

 

***

 

		B-1.	GENERAL - AIRCRAFT RECORDS

 

	1.	***
	 	 
	2.	***
	 	 
	3.	***
	 	 
	4.	***
	 	 
	5.	***
	 	 
	6.	***
	 	 
	7.	***
	 	 
	8.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	35

    	 

    

 

		B-2.	AIRFRAME RECORDS

 

	1.	***
	 	 
	2.	***
	 	 
	3.	***
	 	 
	4.	***
	 	 
	5.	***
	 	 
	6.	***
	 	 
	7.	***
	 	 
	8.	***
	 	 
	9.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	36

    	 

    

 

	10.	***
	 	 
	11.	***
	 	 
	12.	***
	 	 
	13.	***
	 	 
	14.	***
	 	 
	15.	***
	 	 
	16.	***
	 	 
	17.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	37

    	 

    

 

	18.	***
	 	 
	19.	***
	 	 
	20.	***
	 	 
	21.	***
	 	 
	22.	***
	 	 
	23.	***
	 	 
	24.	***
	 	 
	25.	***
	 	 
	26.	***
	 	 
	27.	***
	 	 
	28.	***
	 	 
	29.	***
	 	 
	30.	***
	 	 
	31.	***
	 	 
	32.	***
	 	 
	33.	***
	 	 
	34.	***
	 	 
	35.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	38

    	 

    

 

	36.	***
	 	 
	B-3.	***
	 	 
	1.	***
	 	 
	2.	***
	 	 
	3.	***
	 	 
	4.	***
	 	 
	5.	***
	 	 
	6.	***
	 	 
	7.	***
	 	 
	8.	***
	 	 
	9.	***
	 	 
	10.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	39

    	 

    

 

	11.	***
	 	 
	12.	***
	 	 
	13.	***
	 	 
	14.	***
	 	 
	15.	***
	 	 
	16.	***
	 	 
	17.	***
	 	 
	18.	***
	 	 
	19.	***
	 	 
	20.	***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	40

    	 

    

 

		C.	ENGLISH TRANSLATION REQUIREMENT

 

The documents listed below shall be supplied
by CES under an understandable and readable English language or at least in dual language:

 

***

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	41

    	 

    

 

EXECUTION
PAGE –  BUYBACK AGREEMENT

  

	Airbus	 	 
	 	 	 
	SIGNED by a duly authorised representative	)	 
	for and on behalf of	)	 
	 	)	 
	AIRBUS S.A.S.	)	 
	 	)	/s/ Tom Enders
	 	)	Tom Enders
	 	 	Chief Executive Officer
	 	 	 
	China Eastern	 	 
	SIGNED by a duly authorised representative	)	 
	for and on behalf of	)	 
	 	)	 
	CHINA EASTERN AIRLINES	)	 
	COROPORATION LIMITED	)	 
	 	)	/s/ Liu Shaoyong
	 	 	Liu Shaoyong
	 	 	Chairman
	 	 	 
	Consenting Party	 	 
	SIGNED by a duly authorised representative	)	 
	for and on behalf of	)	 
	 	)	 
	CHINA EASTERN AVIATION IMPORT AND	)	 
	EXPORT COROPORATION	)	 
	 	)	/s/ Li Zhiyong
	 	 	Li Zhiyong
	 	 	General Manager

 

	Date	:	17th October 2011

 

    	China Eastern A340-300 Buyback Agreement
Reference CT1105153	42Exhibit 4.3

 

MIND CTI LTD.

 

2011 SHARE INCENTIVE PLAN

 

A.      NAME
AND PURPOSE

 

1.          Name:
This plan, as amended from time to time, shall be known as the “MIND CTI Ltd. 2011 Share Incentive Plan”.

 

2.          Purpose:
The purpose and intent of the Plan is to provide incentives to employees, directors, consultants and/or contractors of the
Company, by providing them with opportunities to purchase Shares, pursuant to a plan approved by the Board which is designed to
enable the company to issue equity related awards.

 

Incentives under the Plan will only be issued to Grantees (as
defined below) subject to the Applicable Laws in their respective country of residence.

 

B. DEFINITIONS

 

“Administrator” means (i) the Board, or (ii)
a committee of the Board appointed by the Board for the purpose of the administration of the Plan and, if a committee is appointed,
to the extent acting in accordance with specific authorization and guidelines provided by the Board for such purpose and subject
to any restriction under Applicable Laws.

 

“Adoption Date” means the Date of Grant,
or any other date of commencement of vesting of an Award, for the purposes of the Plan, that is determined by the Administrator
for a given grant of an Award.

 

“Affiliate” means any company (i) that holds
at least 10% of the issued share capital of MIND CTI Ltd. or of its voting power, or (ii) in which MIND CTI Ltd. holds at least
10% of the issued share capital or voting power, or (iii) in which a company under clause (i) above also holds at least 10% of
its issued share capital or voting power.

 

“Applicable Laws” means the requirements
relating to the administration of equity compensation plans under Israeli law, any share exchange or quotation system on which
the Shares are listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the
Plan.

 

“Award” means, individually or collectively,
a grant under the Plan of Options or Shares.

 

“Board” means the Board of Directors of the
Company.

 

“Cause” means (i) breach of the Grantee’s
duty of loyalty towards the Company, or (ii) breach of the Grantee’s duty of care towards the Company, or (iii) the commission
of any flagrant criminal offense by the Grantee, or (iv) the commission of any act of fraud, embezzlement or dishonesty towards
the Company by the Grantee, or (v) any unauthorized use or disclosure by the Grantee of confidential information or trade secrets
of the Company, or (vi) involvement in a transaction in connection with the performance of duties to the Company which transaction
is adverse to the interests of the Company and which is engaged in for personal profit, or (vii) any other intentional misconduct
by the Grantee (by act or omission) adversely affecting the business or affairs of the Company in a material manner, or (viii)
any act or omission by the Grantee which would allow for the termination of the Grantee’s employment without severance pay,
according to the Israeli Severance Pay Law, 1963, or any similar provision of law in the jurisdiction in which the Grantee is employed.

 

    	1

    	 

    

 

 

“Cessation of Service” means Grantee’s
cessation of providing services as a Service Provider of the Company.

 

“Companies Law” means the Israeli Companies
Law, 1999.

 

“Company” means MIND CTI Ltd., a company
organized under the laws of the State of Israel, or any Affiliate thereof.

 

“Consultant” means any person, including
an advisor, engaged by the Company to render services to it, who is not an Employee.

 

“Corporate Transaction” means the
occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)      a
sale or other disposition of all or substantially all, as determined by the Board in its discretion, of the consolidated assets
of the Company and its subsidiaries;

 

(ii)     a
sale or other disposition of at least eighty percent (80%) of the outstanding securities of the Company;

 

(iii)    a
merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

(iv)    a
merger, consolidation or reorganization following which the Company is the surviving corporation but the Ordinary Shares of the
Company outstanding immediately preceding the merger, consolidation or reorganization are converted or exchanged by virtue of the
merger, consolidation or reorganization into other property, whether in the form of securities, cash or otherwise.

 

Whether a transaction is a “Corporate Transaction”
as defined above, shall be finally and conclusively determined by the Administrator in its absolute discretion.

 

“Date of Grant” means the effective date
of grant of an Award, as detailed in Section 5.1 below.

 

“Date of Cessation” means the effective date
of a Cessation of Service.

 

“Director” means a member of the Board.

 

“Disability” means the inability to engage
in any substantial gainful occupation for which the Grantee is suited by education, training or experience, by reason of any medically
determinable physical or mental impairment that is expected to result in such person’s death or to continue for a period
of six (6) consecutive months or more.

 

“Employee” means any person, including officers
and Directors, employed by the Company or an Affiliate of the Company. Neither service as a Director nor payment of a director’s
fee by the Company will be sufficient to constitute “employment” by the Company.

 

 

    	2

    	 

    

 

“Exercise Conditions” means a Vesting Period.

 

“Exercise Price” means (i) the purchase price
per Share subject to an Award, or (ii) the nominal value per Share to be paid upon the vesting of an Award that does not require
exercise by the Grantee, to the extent the Grantee is required to pay such nominal value hereunder, as applicable.

 

“Exercised Share” means a Share issued upon
exercise of an Award or vesting of an Award, as applicable, or, if applicable, a freely transferable Share issued to a Grantee
not resulting from another type of Award.

 

“Grantee” means the person to whom an Award
shall be granted under the Plan.

 

“Notice of Exercise” means a written notice
of exercise of an Award, delivered by a Grantee to the Company.

 

“Notice of Grant” means a written notice
of the grant of an Award, accompanied by an applicable agreement between the Company and the Grantee relating to the terms of grant
of said Award.

 

“Option” means an option to purchase a Share
or Shares.

 

“Plan” means this “MIND CTI Ltd. 2011
Share Incentive Plan”, as amended from time to time.

 

“Representative” means any third party designated
by the Company for the purpose of the exercise of Awards, as provided in Section 8.2 below.

 

“Sale” means the sale of all or substantially
all of the issued and outstanding share capital of the Company.

 

“Service Provider” means an Employee, Director
or Consultant.

 

“Share” means an Ordinary Share, nominal
value of NIS 0.01 each, of the Company.

 

“Stock Market” means a stock
exchange or an electronic securities trading system (such as NASDAQ).

 

“Successor Entity Award” means securities
of any successor entity, as provided in Section 9.3 below.

 

“Tax” means any and all federal, provincial,
state and local taxes of any applicable jurisdiction, and other governmental fees, charges, duties, impositions and liabilities
of any kind whatsoever, including social security, national health insurance or similar compulsory payments, together with all
interest, linkage for inflation, penalties and additions imposed with respect to such amounts.

 

“Vesting Period” of an Award means, for the
purpose of the Plan and its related instruments, the period between the Adoption Date and the date on which (i) the Grantee may
exercise the Award into Exercised Shares; or (ii) if said Award does not require the Grantee to exercise it, the date on which
the Award vests into an Exercised Share; or (iii) the date on which a Share (not resulting from another type of Award) may be freely
transferred by the Grantee (subject to any other restrictions prescribed herein or by law).

 

 

    	3

    	 

    

 

C.   GENERAL TERMS AND CONDITIONS OF THE PLAN

 

3.   Administration: 

3.1.        The
Plan will be administered by the Administrator, subject to Applicable Laws, including but not limited to the instructions of the
Companies Law.

 

3.2.        Subject
to the general terms and conditions of the Plan, the Administrator shall have the full authority in its discretion, from time to
time and at any time to determine (i) the Grantees under the Plan, (ii) the number of Shares subject to each Award, the type of
Award, and the Exercise Price per Share, (iii) the time or times at which the same shall be granted, (iv) the schedule and conditions,
if applicable, on which Awards may vest or be exercised and on which Shares shall be paid for, (v) the method of payment for Shares
purchased pursuant to any Award, (vi) the method for satisfaction of any tax withholding obligation arising in connection
with an Award, including by the withholding, delivery or sale of Shares, (vii) rules and provisions, as may be necessary or
appropriate to permit eligible Grantees resident or employed in any specific jurisdiction to participate in the Plan and/or to
receive preferential tax treatment in their country of residence, with respect to Awards granted hereunder, including the adoption
of a sub-plan to this Plan, as provided in Section 11.2 below; and/or (viii) any other matter which is necessary or desirable for,
or incidental to, the administration of the Plan.

 

3.3.        The
Administrator may, from time to time, adopt such rules and regulations for carrying out the Plan, as it may deem necessary.

 

3.4.        The
interpretation and construction by the Administrator of any provision of the Plan or of any Award thereunder shall be final and
conclusive and binding on all parties who have an interest in the Plan or any Award or Exercised Share, unless otherwise determined
by the Board.

 

4.   Eligible
Grantees:

4.1           The
Administrator, at its discretion, may grant Awards to any Service Provider of the Company. Anything in the Plan to the contrary
notwithstanding, all grants of Awards shall be authorized and implemented only in accordance with the provisions of Applicable
Laws.

 

4.2           The
grant of an Award to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him from participating,
in any other grant of Awards pursuant to the Plan or any other incentive plan of the Company.

 

5.   Date
of Grant and Shareholder Rights:

5.1           Date
of Grant. Subject to Sections 7.1 and 7.2 hereof and to any Applicable Laws, the Date of Grant shall be the date the Administrator
resolves to grant such Award, or any future date determined as the effective date of a grant of an Award, if so expressly stated
by the Administrator in its determination relating to the grant of an Award. The Company shall promptly give the Grantee a Notice
of Grant following such resolution.

 

5.2           Voting
Rights; Shareholder Rights. The holder of an Award shall have no shareholder rights with respect to the Shares subject to
such Award until such person (i) shall have exercised such Award or such Award has vested into a Share, as applicable, and (ii)
shall have all restrictions applicable to any Shares issued to him removed, if applicable; and (iii) has paid the applicable Exercise
Price, if any; and (iv) has become the record holder of the Exercised Shares.

 

    	4

    	 

    

  

6.    Reserved
Shares:

6.1           The
Company shall reserve sufficient number of shares for the purpose of grants of Awards under this Plan.

 

6.2           All
Shares under the Plan, in respect of which the right of a Grantee to purchase or be issued the same shall, for any reason, terminate,
expire or otherwise cease to exist, shall again be available for grant through Awards under the Plan, and under any sub-plans of
this Plan, as the Administrator may determine at its own discretion, from time to time, provided, however, that until termination
of the Plan the Company shall at all times reserve sufficient number of unissued Shares to meet the requirements of the Plan.

 

6.3           Without
derogating from the foregoing, the Administrator shall have full authority in its discretion to determine that the Company may
issue, for the purposes of this Plan and/or any other plans, previously issued Shares that are held by the Company, from time to
time, as Dormant Shares (as such term is defined in the Companies Law).

 

7.   Required
Approvals; Notice of Grant; Vesting:

7.1           The
implementation of the Plan and the granting of any Award under the Plan shall be subject to the Company’s procurement of
all approvals and permits required by Applicable Laws or regulatory authorities having jurisdiction over the Plan, the Awards granted
under it, and the Shares issued pursuant to it.

 

7.2           The
Notice of Grant shall state, inter alia, the number of Shares subject to each Award, the type of Award, the vesting schedule,
the dates when the Award may be exercised and/or will vest (as applicable), any restrictions upon transfer or sale of Shares (if
applicable), the Exercise Price, the tax treatment to which the Award is subject and such other terms and conditions as the Administrator
at its discretion may prescribe, provided that they are consistent with the Plan.

 

7.3           Vesting
of Awards. Unless determined otherwise by the Administrator, the Vesting Period pursuant to which such Awards shall vest, shall
be such that all Awards shall be fully vested on the first business day following the passing of four (4) years from the
Adoption Date, such that 50% of the Awards shall vest on the second anniversary of the Adoption Date and 25% of the Awards shall
vest on each of the third and fourth anniversaries of the Adoption Date.

 

Unless determined otherwise by the Administrator,
any period in which the Grantee shall not be employed by the Company, or in which the Grantee shall have taken an unpaid leave
of absence (excluding a leave for military reserves duty or the mandatory maternity leave determined by law), or in which the Grantee
shall cease to serve as Service Provider of the Company, shall not be included in the Vesting Period.

 

8.   Options:

8.1          Exercise
Price; Re-pricing of Options.

 

8.1.1           The
Exercise Price per Share subject to each Option shall be determined by the Administrator in its sole and absolute discretion, subject
to Applicable Laws and to guidelines adopted by the Board, from time to time. In the event the Exercise Price is not determined
by the Administrator, and provided the Company’s shares are listed on any Stock Market, the Exercise Price of an Option shall
be equal to the average closing price per share of MIND's ordinary shares on the Stock Market during the 30 trading day period
immediately preceding the Date of Grant of such Option.

 

    	5

    	 

    

 

8.1.2           Subject
to Applicable Laws, the Administrator shall have full authority to, at any time and from time to time, (i) grant in its discretion
to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having an Exercise
Price lower than provided in the Option so surrendered and canceled and containing such other terms and conditions as the Administrator
may prescribe in accordance with the provisions of the Plan, or (ii) effectuate a decrease in the Exercise Price (see Section 8.1.1
above) of outstanding Options.

 

8.2          Exercise
of Options. Options shall be exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions
of the Plan. The exercise of an Option shall be made by a written Notice of Exercise delivered by the Grantee to the Company at
its principal executive office, and/or to a Representative, in such form and method as may be determined by the Company, specifying
the number of Shares to be purchased and accompanied by the payment of the Exercise Price, at the Company’s or the Representative’s
principal office, and containing such other terms and conditions as the Administrator shall prescribe from time to time.

 

Each payment for Exercised Shares shall be in respect of a whole
number of Shares, and shall be effected in cash or by a bank’s check payable to the order of the Company, or such other method
of payment acceptable to the Company.

 

8.3          Term
of Options.     Unless otherwise determined by the Administrator, anything herein to the contrary notwithstanding,
but without derogating from the provisions of Section 8.5 hereof, if any Option has not been exercised and the Shares subject thereto
not paid for within five (5) years after the Date of Grant (or any shorter or longer period set forth in the Notice of Grant),
such Option and the right to acquire such Shares shall terminate, all interests and rights of the Grantee in and to the same shall
ipso facto expire, and the Shares subject to such Options shall again be available for grant through Awards under the Plan,
or under any sub-plans of the Plan, as provided for in Section 6 herein.

 

8.4          The
exercise of the Options shall be subject to any Applicable Laws, including when applicable, the limitations in connection with
the use of nonpublic information.

 

8.5          Cessation
of Service.

 

8.5.1.   In
the event of a Cessation of Service, all Options theretofore granted to such Grantee, shall terminate as follows:

 

(a)          All
such Options that are not vested on the Date of Cessation shall terminate immediately.

 

(b)          If
the Grantee’s Cessation of Service is by reason of such Grantee's death or Disability, such Options (to the extent vested
at the Date of Cessation) shall be exercisable by the Grantee or the Grantee's guardian, legal representative, estate or other
person to whom the Grantee's rights are transferred by will or by laws of descent or distribution, at any time until the lapse
of twelve (12) months from the Date of Cessation (but in no event after the expiration date of such Options), and shall
thereafter terminate.

 

    	6

    	 

    

  

(c)          If
the Grantee’s Cessation of Service is due to any reason other than those stated in Sections 8.5.1(b) and 8.5.1(d) herein,
such Options (to the extent vested on the Date of Cessation) shall be exercisable at any time until the lapse of three (3) months
from the Date of Cessation (but in no event after the expiration date of such Options), and shall thereafter terminate; provided,
however, that if the Grantee dies within such period, such Options (to the extent vested on the Date of Cessation) shall
be exercisable by the Grantee's legal representative, estate or other person to whom the Grantee's rights are transferred by will
or by laws of descent or distribution at any time until the lapse of twelve (12) months from the Date of Cessation (but in no event
after the expiration date of such Options), and shall thereafter terminate.

 

(d)          Notwithstanding
the aforesaid, if the Grantee’s Cessation of Service is for Cause, all of the Options whether vested or not shall ipso
facto expire immediately and be of no legal effect.

 

(e)          Whether
the Cessation of Service of a particular Grantee is by reason of “Disability” for the purposes of paragraph 8.5.1(b)
hereof, or is a Cessation of Service other than by reason of such Disability for the purposes of paragraph 8.5.1(c), or is for
Cause as set forth in paragraph 8.5.1(d) hereof, shall be finally and conclusively determined by the Administrator in its absolute
discretion.

 

(f)          Notwithstanding
the aforesaid, under no circumstances shall any Option be exercisable after the specified expiration of the term of such Option.

 

8.5.2    Notwithstanding
the foregoing provisions of this Section 8.5, unless determined otherwise by the Administrator, and for the avoidance of doubt,
the transfer of a Grantee from the employ or service of the Company to the employ or service of an Affiliate, or from the employ
or service of an Affiliate to the employ or service of the Company or another Affiliate, shall not be deemed a termination of employment
or service for purposes hereof.

 

9.    Liquidation
and Corporate Transaction

9.1         Except
as expressly provided in this Section 9, the grant of Awards under the Plan shall in no way affect the right of the Company to
distribute bonus shares, to offer rights to purchase its securities, or to distribute dividends.

 

9.2         Liquidation.
Unless otherwise provided by the Board, in the event of the proposed dissolution or liquidation of the Company, all outstanding
Awards will terminate immediately prior to the consummation of such proposed action. In such case, the Board may declare that any
Award shall terminate as of a date fixed by the Board and give each Grantee the right to exercise his Award or have it vested,
including Award that would not otherwise vest or be exercisable.

  

9.3          Corporate
Transaction.

 

(a)         In
the event of a Corporate Transaction, immediately prior to the effective date of such Corporate Transaction, each Award may, among
other things, at the sole and absolute discretion of the Board, either:

 

    	7

    	 

    

 

(i)       Be
substituted for a Successor Entity Award such that the Grantee may exercise the Successor Entity Award or have it become vested,
as the case may be, for such number and class of securities of the successor entity which would have been issuable to the Grantee
in consummation of such Corporate Transaction, had the Award vested or been exercised (as applicable), immediately prior to the
effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate Transaction and the
Vesting Period of the Awards and such other terms and factors that the Administrator determines to be relevant for purposes of
calculating the number of Successor Entity Awards granted to each Grantee; or

 

(ii)      Be assumed by any successor entity such that the Grantee
may exercise the Award or have his/her Award vest (as applicable), for such number and class of securities of the successor entity
which would have been issuable to the Grantee in consummation of such Corporate Transaction, had the Award vested or been exercised
immediately prior to the effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate
Transaction and the Vesting Period of the Awards and such other terms and factors that the Board determines to be relevant for
this purpose.

 

(iii)     Determine
that the Awards shall be cashed out for a consideration equal to the difference between the price received by the shareholders
of the Company in the Corporate Transaction and the Exercise Price, purchase price, or nominal value, as the case may be, of such
Award.

 

In the event of a clause (i) or clause (ii) action, appropriate
adjustments shall be made to the Exercise Price per Share to reflect such action. In taking any of the actions permitted
under this Section 9.3(a), the Administrator shall not be obligated to treat all Awards, all Awards held by a Grantee, or all Awards
of the same type, similarly.

 

(b)        Immediately
following the consummation of the Corporate Transaction, all outstanding Awards shall terminate and cease to be outstanding, except
to the extent assumed by a successor entity.

 

(c)        Notwithstanding
the foregoing, and without derogating from the power of the Board or Administrator pursuant to the provisions of the Plan, the
Board shall have full authority and sole discretion to determine that any of the provisions of Sections 9.3(a)(i) or 9.3(a)(ii)
above shall apply in the event of a Corporate Transaction in which the consideration received by the shareholders of the Company
is not solely comprised of securities of a successor entity, or in which such consideration is solely cash or assets other than
securities of a successor entity.

 

9.4          Sale.
Subject to any provision in the Articles of Association of the Company and to the Board’s sole and absolute discretion, in
the event of a Sale, each Grantee shall be obligated to participate in the Sale and sell his or her Shares and/or Awards in the
Company, provided, however, that each such Share or Award shall be sold at a price equal to that of any other Ordinary
Share sold under the Sale (less the applicable Exercise Price), while accounting for changes in such price due to the respective
terms of any such Award, and subject to the absolute discretion of the Board.

 

For purposes of a Sale, whether “all or substantially
all of the issued and outstanding share capital of the Company is to be sold”, shall be finally and conclusively determined
by the Board in its absolute discretion.

 

9.5         The
grant of Awards under the Plan shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business
or assets.

 

    	8

    	 

    

  

10.   Limitations
on Transfer:

10.1     Unless
determined otherwise by the Administrator, no Award shall be assignable or transferable by the Grantee to whom granted otherwise
than by will or the laws of descent and distribution, and an Award shall vest or may be exercised (as applicable) during the lifetime
of the Grantee only by such Grantee or by such Grantee's guardian or legal representative. The terms of such Award shall be binding
upon the beneficiaries, executors, administrators, heirs and successors of such Grantee. Any Shares acquired upon exercise or vesting
of Awards shall be transferable only in accordance with applicable securities and other local laws, and may be subject to substantial
statutory or regulatory restrictions on transfer, except to the extent exemptions (whether by registration or otherwise) are available.

 

10.2      Underwriter’s Lock-up
and Limitations on the Use of Nonpublic Information. The Grantee’s rights to sell Exercised Shares may be subject
to certain limitations (including a lock-up period), as will be requested by the Company or its underwriters, from time to time,
or upon a specific occurrence, if applicable, and the Grantee unconditionally agrees and accepts any such limitations. Furthermore,
the Grantee’s right to sell Exercised Shares is subject to Applicable Laws, including in connection with limitation relating
to the use of non-public information, if and when applicable.

 

11.  Term and
Amendment of the Plan:

11.1     The
Plan shall terminate upon the earliest of (i) the expiration of the ten (10) year period measured from the date the Plan was
adopted by the Board, or (ii) the termination of all outstanding Awards in connection with a Corporate Transaction. All Awards
outstanding at the time of a clause (i) termination event shall continue to have full force and effect in accordance with the provisions
of the Plan and the documents evidencing such Awards.

 

11.2     Subject
to Applicable Laws and regulations, the Board in its discretion may, at any time and from time to time, amend, alter, extend or
terminate the Plan, as it deems advisable, including without limitation, change the vesting and exercise periods. In addition,
the Administrator may adopt, as part of the Plan and based on it, sub-plans, in order to comply with all relevant and Applicable
Laws and regulations of the country of residence of any Grantees.

 

12.         Withholding
and Tax Consequences:

12.1     All
Tax consequences and obligations arising from the grant, vesting, or exercise of any Award (as applicable), or the subsequent disposition
of, Shares subject thereto or from any other event or act (of the Company or of the Grantee) hereunder, shall be borne solely by
the Grantee, and the Grantee shall indemnify the Company and hold it harmless against and from any and all liability for any such
Tax, including without limitation, monetary liabilities relating to the necessity to withhold, or to have withheld, any such Tax
payment from any payment made to the Grantee. Notwithstanding the above, the Company’s obligation to deliver Shares upon
the exercise or vesting of any Awards granted under the Plan shall be subject to the satisfaction of all applicable Tax withholding
requirements as governed by Applicable Laws or practice.

 

12.2     Withholding
in Shares. The Company shall have the right, but not the obligation, to deduct from the Shares issuable to a Grantee upon the
exercise or vesting of an Award, or to accept from the Grantee the tender of, a number of whole Shares having a fair market value,
as determined by the Company, that will enable the Company to satisfy any Tax withholding obligations of the Company.

 

    	9

    	 

    

 

12.3    The
Company shall not be required to release any Shares (or Share certificate) to a Grantee until all required payments have been fully
made or secured.

 

12.4    The
Grantee shall, if requested at any time by the Company, provide to the Company within 10 calendar days of such request, any information
regarding the transfer or other disposition of Shares reasonably required by the Company in order for the Company to comply with
applicable local laws and regulations or to obtain any benefits thereunder.

 

13.   Miscellaneous:

13.1    Continuance
of Employment. Neither the Plan nor the grant of an Award thereunder shall impose any obligation on the Company to continue
the employment or service of any Grantee. Nothing in the Plan or in any Award granted thereunder shall confer upon any Grantee
any right to continue in the employ or service of the Company for any period of specific duration, or interfere with or otherwise
restrict in any way the right of the Company to terminate such employment or service at any time, for any reason, with or without
cause.

 

13.2    Notwithstanding
anything to the contrary in the Plan, it is hereby clarified, that any income attributed (or deemed to be attributed) to the Grantee
as a result of the Plan, the grant, vesting or exercise of Awards thereunder, or the sale of Exercised Shares, shall not be taken
into account for the purpose of calculating the Grantee’s eligibility for any rights deriving from the employee-employer
or service provider-client relationship between the Grantee and the Company.

 

13.3    Governing
Law. The Plan and all instruments issued thereunder or in connection therewith, shall be governed by, and interpreted in accordance
with, the laws of the jurisdiction in which the Grantee is generally employed by the Company or provides services to the Company,
excluding the choice of law rules thereof.

 

13.4    Application
of Funds. Any proceeds received by the Company from the sale of Shares pursuant to the exercise or vesting of Awards granted
under the Plan, as applicable, shall be used for general corporate purposes of the Company.

 

13.5    Multiple
Agreements. The terms of each Award may differ from other Awards granted under the Plan at the same time, or at any other
time. The Administrator may also grant more than one grant of Awards to a given Grantee during the term of the Plan, either in
addition to, or in substitution for, one or more Awards previously granted to that Grantee. The grant of multiple Awards may be
evidenced by a single Notice of Grant or multiple Notices of Grant, as determined by the Administrator.

 

13.6    Non-Exclusivity
of the Plan. The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of share-based Awards otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.

 

		14.	The provisions of the Plan shall not be construed as deviating
from any Applicable Laws, rules and regulations.

 

*****

 

    	10

    	 

    

 

APPENDIX “A”

 

MIND CTI LTD.

 

ADDENDUM TO THE 2011 SHARE INCENTIVE PLAN

FOR ISRAELI GRANTEES

 

1.   General:

1.1     This
addendum (the “Addendum”) shall apply only to Grantees who are residents of the State of Israel or those who
are deemed to be residents of the State of Israel for tax purposes (collectively, “Israeli Grantees”). The provisions
specified hereunder shall form an integral part of the “MIND CTI Ltd. 2011 Share Incentive Plan” (the “Plan”),
which applies to the grant of Awards.

 

1.2     This
Addendum is to be read as a continuation of the Plan and only modifies the terms of Awards granted to Israeli Grantees so that
they comply with the requirements set by the Israeli law in general, and in particular with the provisions of the Israeli Tax Ordinance
(as defined below), as may be amended or replaced from time to time. For the avoidance of doubt, this Addendum does not add to
or modify the Plan in respect of any other category of Grantees.

 

1.3     The
Plan and this Addendum are complimentary to each other and shall be deemed as one. In any case of contradiction with respect to
Awards granted to Israeli Grantees, whether explicit or implied, between the provisions of this Addendum and the Plan, the provisions
set out in this Addendum shall prevail.

 

1.4     Any
capitalized term not specifically defined in this Addendum shall be construed according to the definition or interpretation given
to it in the Plan.

 

2.    Definitions:

“102 Award” means a grant of an Award to
an Israeli Employee, Director or other office holder of the Company, other than to a Controlling Shareholder, pursuant to the provisions
of Section 102 of the Tax Ordinance, the 102 Rules, and any other regulations, rulings, procedures or clarifications promulgated
thereunder, or under any other section of the Tax Ordinance that will be relevant for such issuance in the future.

 

“102(c) Award” means a 102 Award that will
not be subject to a Taxation Route, as detailed in Section 102(c) of the Tax Ordinance.

 

“3(i) Award” means a grant of an Option to
an Israeli Consultant, contractor or a Controlling Shareholder of the Company pursuant to the provisions of Section 3(i) of the
Tax Ordinance and the rules and regulations promulgated thereunder, or any other section of the Tax Ordinance that will be relevant
for such issuance in the future.

 

“Beneficial Grantee” means the Grantee for
the benefit of whom the Trustee holds an Award in Trust.

 

“Capital Gains Route” means the capital gains
tax route under Section 102(b)(2) of the Tax Ordinance.

 

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“Controlling Shareholder” means a “controlling
shareholder” of the Company, as such term is defined in Section 32(9)(a) of the Tax Ordinance.

 

“Minimum Trust Period” means the minimum
period of time required under a Taxation Route for Awards and/or Exercised Shares to be held in Trust in order for the Beneficial
Grantee to enjoy to the fullest extent the tax benefits afforded under such Taxation Route, as prescribed at any time by Section
102 of the Tax Ordinance.

 

“Ordinary Income Route” means the ordinary
income route under Section 102(b)(1) of the Tax Ordinance.

 

“Rights” means rights issued in respect of
Exercised Shares, including bonus shares.

 

“102 Rules” means the Israeli Income Tax
Rules (Tax Relief in Issuance of Shares to Employees), 2003, as amended.

 

“Taxation Route” means each of the Ordinary
Income Route or the Capital Gains Route.

 

“Tax Ordinance” means the Israeli
Income Tax Ordinance [New Version], 1961, as amended.

 

“Trust” means the holding of an Award or
Exercised Share by the Trustee in Trust for the benefit of the Beneficial Grantee, pursuant to the instructions of a Taxation Route.

 

“Trustee” means a trustee designated by the
Administrator in accordance with the provisions of Section 3 below and, with respect to 102 Awards, approved by the Israeli Tax
Authorities.

 

3.   Administration:

3.1         Subject
to the general terms and conditions of the Plan, the Tax Ordinance, and any other applicable laws and regulations, the Administrator
shall have the full authority in its discretion, from time to time and at any time, to determine:

 

(a)          With
respect to grants of 102 Awards - whether the Company shall elect the Ordinary Income Route or the Capital Gains Route for grants
of 102 Awards, and the identity of the trustee who shall be granted such 102 Awards in accordance with the provisions of the Plan
and the then prevailing Taxation Route.

 

In the event the Administrator determines that the Company shall
elect one of the Taxation Routes for grants of 102 Awards, all grants of 102 Awards made following such election, shall be subject
to the elected Taxation Route and the Company shall be entitled to change such election only following the lapse of one year from
the end of the tax year in which 102 Awards are first granted under the then prevailing Taxation Route or following the lapse of
any shorter or longer period, if provided by law; and

 

(b)          With
respect to the grant of 102 (c) and 3(i) Awards - whether or not such Awards shall be granted to a trustee in accordance with the
terms and conditions of the Plan, and the identity of the trustee who shall be granted such Awards in accordance with the provisions
of the Plan.

 

3.2         Notwithstanding
the aforesaid, the Administrator may, from time to time and at any time, grant 102(c) Awards.

 

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4.   Grant
of Awards and Issuance of Shares:

Subject to the provisions of the Tax Ordinance and applicable
law:

 

(a)          All
grants of Awards to Israeli Employees, Directors and office holders of the Company, other than to a Controlling Shareholder, shall
be of 102 Awards; and

 

(b)          All
grants of Awards to Israeli Consultants, contractors or Controlling Shareholders of the Company shall be of 3(i) Awards.

 

5.   Trust:

5.1         General.

 

(a)          In
the event Awards are deposited with a Trustee, the Trustee shall hold each such Award and any Exercised Shares in Trust for the
benefit of the Beneficial Grantee.

 

(b)          In
accordance with Section 102, the tax benefits afforded to 102 Awards (and any Exercised Shares) in accordance with the Ordinary
Income Route or Capital Gains Route, as applicable, shall be contingent upon the Trustee holding such 102 Awards for the applicable
Minimum Trust Period.

 

(c)          With
respect to 102 Awards granted to the Trustee, the following shall apply:

 

(i)          A
Grantee granted 102 Awards shall not be entitled to sell the Exercised Shares or to transfer such Exercised Shares (or such 102
Awards) from the Trust prior to the lapse of the Minimum Trust Period; and

 

(ii)         Any
and all Rights shall be issued to the Trustee and held thereby until the lapse of the Minimum Trust Period, and such Rights shall
be subject to the Taxation Route which is applicable to such Exercised Shares.

 

(d)          Notwithstanding
the aforesaid, Exercised Shares or Rights may be sold or transferred, and the Trustee may release such Exercised Shares or Rights
from Trust, prior to the lapse of the Minimum Trust Period, provided however, that tax is paid or withheld in accordance with Section
102 of the Tax Ordinance and Section 7 of the 102 Rules, and any other provision in any other section of the Tax Ordinance and
any regulation, ruling, procedure and clarification promulgated thereunder, that will be relevant, from time to time.

 

(e)          The
Company shall register the Exercised Shares issued to the Trustee pursuant to the Plan, in the name of the Trustee for the benefit
of the Israeli Grantees, in accordance with any applicable laws, rules and regulations, until such time that such Shares are released
from the Trust as herein provided.

 

If the Company shall issue any certificates
representing Exercised Shares deposited with the Trustee under the Plan, then such certificates shall be deposited with the Trustee,
and shall be held by the Trustee until such time that such Exercised Shares are released from the Trust as herein provided.

 

(f)          Subject
to the terms hereof, at any time after the Awards are exercised or vested, with respect to any Exercised Shares the following shall
apply:

 

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(i)          Upon
the written request of any Beneficial Grantee, the Trustee shall release from the Trust the Exercised Shares issued, on behalf
of such Beneficial Grantee, by executing and delivering to the Company such instrument(s) as the Company may require, giving due
notice of such release to such Beneficial Grantee, provided, however, that the Trustee shall not so release any such
Exercised Shares to such Beneficial Grantee unless the latter, prior to, or concurrently with, such release, provides the Trustee
with evidence, satisfactory in form and substance to the Trustee, that payment of all taxes, if any, required to be paid upon such
release has been secured.

  

(ii)         Alternatively,
subject to the terms hereof, provided the Shares are listed on a Stock Market, upon the written instructions of the Beneficial
Grantee to sell any Exercise Shares, the Company and/or the Trustee shall use their reasonable efforts to effect such sale and
shall transfer such Shares to the purchaser thereof concurrently with the receipt of, or after having made suitable arrangements
to secure, the payment of the proceeds of the purchase price in such transaction. The Company and/or the Trustee, as applicable,
shall withhold from such proceeds any and all taxes required to be paid in respect of such sale, shall remit the amount so withheld
to the appropriate tax authorities and shall pay the balance thereof directly to the Beneficial Grantee, reporting to such Beneficial
Grantee the amount so withheld and paid to said tax authorities.

 

5.2          Voting
Rights. As long as the Trustee holds the Exercised Shares, the voting rights at the Company’s general meeting attached
to such Exercised Shares will remain with the Trustee. However, the Trustee shall not be obligated to exercise such voting rights
at general meetings nor notify the Grantee of any Shares held in the Trust, of any meeting of the Company’s shareholders.

 

Without derogating from the above, with respect to 102 Awards,
such shares shall be voted in accordance with the provisions of Section 102 and any rules, regulations or orders promulgated thereunder.

 

5.3          Dividends.
Subject to any applicable law, tax ruling or guidelines of the Israeli Tax Authority, as applicable, for so long as Shares deposited
with the Trustee on behalf of a Beneficial Grantee are held in Trust, the cash dividends paid or distributed with respect thereto
shall be distributed directly to such Beneficial Grantee, subject further to any applicable taxation on distribution of dividends,
and when applicable subject to the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders
promulgated thereunder.

 

5.4          Notice
of Exercise. With respect to a 102 Award held in the Trust, a copy of any Notice of Exercise shall be provided to the Trustee,
in such form and method as may be determined by the Trustee in accordance with the requirements of Section 102 of the Tax Ordinance.

 

6.   Notice
of grant:

6.1          The
Notice of Grant shall state, inter alia, whether the Awards granted to Israeli Grantees are 102 Awards (and in particular
whether the 102 Awards are granted under the Ordinary Income Route, the Capital Gains Route or as 102(c) Awards), or 3(i) Awards.
Each Notice of Grant evidencing a 102 Award shall be subject to the provisions of the Tax Ordinance applicable to such awards.

 

6.2          Furthermore,
each Grantee of a 102 Award under a Taxation Route shall be required: (i) to execute a declaration stating that he or she is familiar
with the provisions of Section 102 of the Tax Ordinance and the applicable Taxation Route; and (ii) to undertake not to sell or
transfer the Awards and/or the Exercised Shares prior to the lapse of the applicable Minimum Trust Period, unless he or she pays
all taxes that may arise in connection with such sale and/or transfer.

 

    	14

    	 

    

 

7.  Sale: 

In the event of a Sale described in Section 9.4 of the Plan,
with respect to Shares held in Trust the following procedure will be applied: The Trustee will transfer the Shares held in Trust
and sign any document in order to effectuate the transfer of Shares, including share transfer deeds, provided, however,
that the Trustee receives a notice from the Board, specifying that: (i) all or substantially all of the issued outstanding share
capital of the Company is to be sold, and therefore the Trustee is obligated to transfer the Shares held in Trust under the provisions
of Section 9.4 of the Plan; and (ii) the Company is obligated to withhold at the source all taxes required to be paid upon release
of the Shares from the Trust and to provide the Trustee with evidence, satisfactory to the Trustee, that such taxes indeed have
been paid; and (iii) the Company is obligated to transfer the consideration for the Shares (less applicable tax and compulsory
payments) directly to the Grantees.

 

8.   Limitations
of Transfer:

In addition to the provisions of Section 10 of the Plan, as
long as Awards and/or Shares are held by the Trustee on behalf of the Grantee, all rights of the Grantee over the Shares are personal,
can not be transferred, assigned, pledged or mortgaged, other than by will or pursuant to the laws of descent and distribution.

 

9.   Taxation:

9.1           Without
derogating from the provisions of Section 12 of the Plan, the provisions of Section 12.1 of the Plan shall apply also to actions
taken by the Trustee. Accordingly, without derogating from the provisions of Section 12.1 of the Plan, the Grantee shall indemnify
the Trustee and hold it harmless against and from any and all liability for any such Tax, including without limitation, monetary
liabilities relating to the necessity to withhold, or to have withheld, any such Tax from any payment made to the Grantee.

 

9.2           The
Trustee shall not be required to release any Share (or Share certificate) to a Grantee until all required Tax payments have been
fully made or secured.

 

9.3           With
regards to 102 Awards, any provision of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated
thereunder, which is necessary in order to receive and/or to preserve any Tax treatment pursuant to Section 102 of the Tax Ordinance,
which is not expressly specified in the Plan or in this Addendum, shall be considered binding upon the Company and the Israeli
Grantee.

 

9.4           Guarantee.
In the event a 102(c) Award is granted to a Grantee, if the Grantee’s employment or service is terminated, for any reason,
such Grantee shall provide the Company, to its full satisfaction, with a guarantee or collateral securing the future payment of
all Taxes required to be paid upon the sale of the Exercised Shares received upon exercise of such 102(c) Award, all in accordance
with the provisions of Section 102 of the Tax Ordinance, the 102 Rules and the regulations or orders promulgated thereunder.

 

10.  Cessation
of Service:

 

It is hereby clarified that the Cessation of Service of an Israeli
Grantee who is an Employee shall be the cessation of the employee-employer relationship between the Israeli Grantee and the Company.

  

    	15

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