Document:

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                                                                   EXHIBIT 10.14

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Azorim Park
A Business Park at the Gates of Tel Aviv

                                LEASE AGREEMENT
                                ---------------

                                   Between:

                         AZOREI MALLAL INDUSTRIES LTD.

                                     And:

                              ACCORD NETWORKS LTD.

Azorim Business Park Azorei Mallal Industries Ltd. 6 Koifman St. Tel Aviv 68012
                                                              Tel 972-3-5195492
                                                              Fax 972-3-5161842
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                               Table of Contents
                               -----------------

1.   Introduction
2.   Definitions.
First Section - the Lease
-------------------------
3.   The Lease and the Premises
4.   Option to Increase the Area of the Premises
5.   Lease of Parking
6.   Purpose of the Lease
7.   Lease Period
8.   Non Application of Tenants Protection Laws
9.   Management Agreement
Second Section - Delivery of Possession
---------------------------------------
10.  The Technical Specification
11.  Delivery of Possession of the Premises
12.  Postponement of the Delivery Date
Third Section - The Consideration
---------------------------------
13.  The Basic Rental
14.  Manner of Payment of the Rental
15.  Mortgage of the Company's Rights under this Agreement to the Bank
Fourth Section - Additional Payments Due by the Lessee
------------------------------------------------------
16.  Liability for Payment thereof
17.  Taxes
18.  Telephone, Electricity, Water and Maintenance
Fifth Section - Obligations of the Parties
------------------------------------------
19.  Lessee's Obligation to Effect Payments
20.  Limitation on the Use of the Premises
21.  Signs
22.  Service Lifts
23.  Observance of Laws
24.  Sewage
25.  Prohibition against the Installation of Air Conditioners
26.  Limitations on the Use of the Remainder of the Building Structure
27.  Public Areas and Common Property
28.  Cleanliness, Preservation and Repair of the Premises
29.  Preservation of the Premises, Alterations to the Premises, Shed
30.  Prevention of a Nuisance
31.  Occupiers of the Building
32.  The Company's Obligations
33.  Ancillary Services in the Park
Sixth Section - Liability and Insurance
---------------------------------------
34.  Liability for Damage
35.  The Lessee's and the Company's Insurance
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Seventh Section - Maintenance of the Premises
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36.  Maintenance of the Premises and Repairs
37.  Prohibitions
Eighth Section - The Company's Rights
-------------------------------------
38.  Entry onto the Premises
39.  Execution of Works on the Premises
40.  Execution of Works in the Building and in the Park
41.  Traffic and Parking Arrangements
Ninth Section - Guarantees
--------------------------
42.  Obligation to Furnish
43.  Bank Guarantee
Tenth Section - Breaches and Remedies
-------------------------------------
44.  Breaches
45.  Fundamental Breaches
46.  Late Payments
47.  Appointment of Receiver or Liquidator
48.  Taking Possession
49.  Cancellation of the Agreement
50.  Payment of the Lessee's Debts
Eleventh Section - Miscellaneous
--------------------------------
51.  Transfer of Rights
52.  Right of First Refusal
53.  Vacating
54.  Costs of the Agreement
55.  Taxes, Duties and Levies
56.  Value Added Tax
57.  Jurisdiction
58.  Prohibition against the Set Off of Payments
59.  Waivers and Alterations to the Agreement
60.  Delivery of Notices
61.  Addresses

Annexes
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Annex A : Drawing

Annex B : Management Agreement

Annex C : Technical Specification

Annex D : Operational Regulations

Annex E : Guarantee
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Annex F : Promissory Note
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                                LEASE AGREEMENT
                                ---------------

          Made and entered into at Tel Aviv on 25/th/ day of April 1999
                                               ------        -----

Between :      Azorei Mallal Industries Ltd.
               Care of Azorim Properties of 6 Koifman Street Tel Aviv.
               (hereinafter: "the Company")

               Herein represented by Mr. Daniel Lavon and Mr. Arnon Brodner, who
               declare that they are authorised to sign this Agreement on behalf
               of the Company.

                                                              Of the First Part;
                                                              -----------------

And :          Accord Networks Ltd.
               of 10 Martin Gahal Street, Kiryat Arieh, Petah Tikva
               (hereinafter: "the Lessee")

Herein represented by Mr. Zigi Gavish, who declares that he is authorised to
               sign this Agreement on behalf of the Lessee.

                                                              Of the Second Part
                                                              ------------------

Whereas      In accordance with Ruling No. 717 of the Israel Lands Board and
             pursuant to a development agreement between the Company and the
             Israel Lands Administration, the Company has established the Park
             upon the Land, which includes the Building, in accordance with the
             definition of the aforesaid terms as set forth below;

And Whereas  The Company declares that it is entitled to let the Premises as
             defined in paragraph 2.6 hereunder to the Lessee and there is no
             impediment under any law or agreement against its being let as
             aforesaid.

And Whereas  The Lessee wishes to lease the Premises from the Company, and the
             Company is prepared to lease the same to the Lessee for the
             purpose, the period, the consideration and on the further
             conditions set forth in this Agreement;

And Whereas  The parties desire to regulate the conditions pertaining to the
             lease of the Premises to the Lessee and to the operation of the
             Lessee's business on the Premises, together with whatever is
             involved therein,
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             connected therewith and resulting therefrom, pursuant to and in
             accordance with the matters set forth in this Agreement;

   Now therefore it is stipulated and agreed between the parties as follows :
   ------------------------------------------------------------------------

1.   Introduction
     ------------

     1.1  The preamble to this Agreement and the Annexes hereto constitute an
          integral part of the provisions of this Agreement.

     1.2  Paragraph numbering and headings are for the purpose of convenience
          only, and do not constitute a part of this Agreement.

2.   Definitions
     -----------

     The terms hereunder in this Agreement shall have the meaning recorded
     alongside them :

     2.1  "the Land"             A piece of land bordering on the Gehah Highway
                                 (Highway No. 4) approximately 43 dunams in
                                 extent, known as Block 6640 Parcels 87 (in
                                 part), 90 (in part), 92 (in part), 94 (in part)
                                 and 96 (in part).

     2.2  "the Development       An agreement dated 2/nd/ November 1997 between
          Agreement"             the Israel Lands Administration and the
                                 Company under which rights in and to the Land
                                 were conferred on the Company, pursuant to
                                 which the Company is establishing the Park, and
                                 under which the Company is entitled to let the
                                 Premises as set forth in this Agreement to the
                                 Lessee.

     2.3  "the Park"             Park Azorim - a business and employment complex
                                 which the Company is establishing on the Land.
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     2.4  "the Building"         A structure comprising 9 floors and 2 basement
                                 levels known as Building No. 1 in the Park,
                                 situate on lot no. 1065 on the diagram attached
                                 to the Development Agreement and known as
                                 "special industrial" on amended planning scheme
                                 no. PT/MK/2000/D11.

     2.5  "the Tenants           The Tenants Protection [Consolidated Version]
          Protection Law"        1972.

     2.6  "the Premises"         An area of approximately 790 square metres on
                                 the fourth floor of the Building, and a further
                                 area of approximately 790 square metres on the
                                 fifth floor of the Building as well as an area
                                 which constitutes 50% of the third floor in the
                                 Building (approximately 330 square metres), all
                                 as marked in yellow upon the Drawing attached
                                 as Annex A to this Contract.
                                    -------

     2.7  "the Area of the       The area of the Premises as shall be determined
          Premises"              in the manner set forth in paragraph
                                 3 hereunder.

     2.8  "the Lease Period"     The Lease Period specified in paragraph 7
                                 hereunder, including the First Additional Lease
                                 Period (if any) and the Second Additional Lease
                                 Periods (if any) as the case may be.
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      2.9  "the Consumer Price   The Consumer Price Index, including fruit and
           Index"                vegetables, published by the Central Bureau of
                                 Statistics and Economic Research, including
                                 that Index even though published by another
                                 entity or governmental institution as well as
                                 any official index in replacement thereof,
                                 irrespective of whether or not constructed on
                                 the same data as that on which the existing
                                 Index is constructed. Should the Consumer Price
                                 Index be replaced by another index, the
                                 relationship between the index so replaced and
                                 the other index shall be determined by the
                                 Central Bureau of Statistics. Should the
                                 Central Bureau not determine the relationship
                                 as aforesaid, the same shall be determined by
                                 an accountant agreed upon by the Company and
                                 the Lessee.

     2.10  "the Surveyor"        A certified surveyor appointed by the Company
                                 in its sole and absolute discretion, for the
                                 purpose of this Agreement.

     2.11  "the Supervisor"      The supervising engineer engaged by the Company
                                 for the supervision of the works relating to
                                 the erection of the Building or any other
                                 supervising engineer as determined by the
                                 Company, in its sole and absolute discretion,
                                 in regard to this Agreement.

     2.12  "the Dollar Rate"     The representative rate of exchange of the
                                 United States dollar as published by the Bank
                                 of Israel as at the date of signature of this
                                 Agreement, that is, NIS 4.094 (four new Israeli
                                 shekels and nine and four tenths agorot).

                           First Section - the Lease
                           -------------------------

3.   The Lease and the Premises
     --------------------------

     3.1   The Company hereby lets the Premises to the Lessee and the Lessee
           hereby leases the same from the Company for the period, at the
           consideration and on the conditions set forth heretofore and
           hereunder in

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          this Agreement.

     3.2  The Area of the Premises shall be determined by the Surveyor under a
          certificate signed by him, and his determination shall constitute the
          "Area of the Premises" for the purposes of this Contract. The Lessee
          shall be entitled to object to the determination by the Surveyor as
          aforesaid and in such event the matter shall be referred for decision
          of the Surveyor and of a surveyor appointed by the Lessee
          (hereinafter : "the Referee"), and should the Referee fail to reach
          agreement between them within 21 days from the date of the appointment
          of the Lessee's surveyor, a final umpire shall be appointed by
          consensus by the parties (hereinafter : "the Final Referee"). Should
          the parties fail to reach agreement as to the identity of the Final
          Referee, such surveyor shall be appointed by the Chairman of the
          Assessors Association within 7 days from the date of referral by
          either of the Parties. For the purposes of the determination of the
          Area of the Premises the Surveyor shall, after completion of the
          framework of the Building, measure, by external measurement, the Area
          of the Premises in square metres.

          Without prejudice to the generality of the foregoing, the Area of the
          Premises shall include :

         (a)   The whole of the floor area of the Premises without distinction
               as to the manner or form of use of the various sections and an
               internal empty space, if any, as well as the floor area of any
               projection or pillar or structure, whether permanent or
               temporary, that are situated within the external walls of the
               Premises.

         (b)   The floor area beneath the internal walls of the Premises in
               their entirety.

         (c)   The floor area beneath the external walls of the Premises.

         (d)   Half the floor area below the external walls of the Premises
               which also serves as the external wall of the other premises in
               the Building.

    3.3  The area so arrived at pursuant to the aforesaid computation set out in
         sub-paragraph 3.2 shall be increased by 10.5% with respect to the
         Lessee's pro rata share of the public areas serving or which may serve
         all or a specific part of the occupiers of the Building, or public
         areas serving or which may serve all or a specific part of the
         occupiers of the Park, or with respect to areas serving or which may
         serve for the
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          provision of services to all occupiers of the Park (such as machinery
          rooms, transformer, electricity, communication, refuse, etc.).

     3.4  The area so arrived at after the aforesaid increase set out in sub-
          paragraph 3.3 shall be regarded for all intents and purposes as the
          Area of the Premises.

4.   Option to Increase the Area of the Premises
     -------------------------------------------

     4.1  The Company hereby grants to the Lessee an option to lease an
          additional area of approximately 330 square metres in extent on the
          third floor of the Building, as marked in red on the Drawing Annex A
          to this Contract (hereinafter : "the Option"). The Option shall be in
          force and exercisable at any time from 3/rd/ October 1999 to 2/nd/
          July 2000 (hereinafter : "the Option Period").

          The exercise of the Option to increase the Area of the Premises as
          aforesaid shall be effected by way of the Lessee giving written notice
          to the Company as to the exercise of the Option not less than 30 days
          prior to the date of exercise thereof.

          Should the Option for the increase of the Area of the Premises be
          exercised, inasmuch as not otherwise expressly stated, all the
          provisions of this Agreement without exception shall be applicable to
          the area comprised within the Option, including the provisions of
          paragraph 3 above with respect to the calculation of the Area of the
          Premises.

          Should the Option be exercised in the aforesaid manner, delivery of
          possession of the area comprised within the Option shall be effected
          in accordance with the provisions of paragraph 11 of this Agreement,
          mutatis mutandis. The delivery date of the areas which are the subject
          of the Option shall be within 6 (six) months from the date of the
          exercise of the Option. The Company shall take steps in order to
          effect delivery of possession of the aforesaid areas as soon as may be
          during the aforesaid six months period, and the Lessee for its part
          undertakes to accept possession of the aforesaid areas immediately
          upon receipt of a notice from the Company as to the completion of the
          construction thereof. For the avoidance of doubt, it is hereby
          stipulated that the Lessee shall not be liable for the payment of
          rental under this Agreement with respect to the area comprised within
          the Option prior to the delivery to it of possession as set forth
          above.

          Notwithstanding the foregoing, with effect from 1/st/ April 2000 the
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          Lessee shall pay municipal rates, insofar as the Company may be
          required to pay the same, and in any event a management fee with
          respect to the area comprised within the Option.

          Should the Option Period have expired without the Lessee having
          exercised the Option in the manner set forth above, the Option for the
          increase in the Area of the Premises shall absolutely lapse and the
          Lessee shall have no further right to the exercise thereof nor shall
          it have any right in relation to the area comprised within the Option.

    4.2   In addition to the foregoing, the Company hereby grants to the Lessee
          a right of first refusal to lease a further specific area of
          approximately 500 square metres in extent on the second floor of the
          Building as marked in green on the Drawing Annex A to this Agreement
          (hereinafter : "the Additional Area"). The right of first refusal
          shall be in force with effect from the date of signature of this
          Agreement until 3 (three) months shall have elapsed from the Delivery
          Date of possession as set forth in paragraph 11.1 hereunder, to which
          the provisions of paragraph 52 hereunder, shall be applicable.
          Notwithstanding the aforesaid provisions of this sub-paragraph, it is
          hereby agreed that for the entire period of the availability of the
          right of first refusal as aforesaid, the Company, and it alone, shall
          retain the right to give notice from time to time to the Lessee, in
          its sole discretion, as to the transfer of such right of refusal so
          that such right shall apply to another specific area of 500 square
          metres on the second floor of the Building, which the Company shall
          define for the Lessee at the time of the notice as aforesaid and which
          shall constitute from the date of such notice as aforesaid the
          Additional Area as defined above, provided that if after all the areas
          on the second floor of the Building have been let or sold and only the
          last area of 500 square meters remains on the second floor of the
          Building, then the right of refusal shall apply to such last area of
          500 square meters on the second floor of the Building, and it is
          understood that the right of transfer of such area as set out above
          shall not be available to the Company.

    4.3   It is hereby clarified that so long as a right of first refusal as
          aforesaid is available to the Lessee with respect to 500 square meters
          on the second floor of the Building (during the course of the period
          of the aforesaid right), the Company, and it alone, shall have the
          right and sole discretion to give notice to the Lessee as to the
          transfer of such right to an alternative area on the second floor of
          the Building as set forth above, and the Lessee shall in relation
          thereto not have any claim, demand or right against the Company and/or
          any third party. It is further clarified for the avoidance of doubt
          that so long as the Company shall not have
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          give notice to the Lessee as to the transfer of the right of refusal
          to an alternative area on the second floor of the Building as set
          forth above, no right of any kind shall be available to the Lessee in
          relation to any areas whatsoever on the second floor of the Building
          save for the Additional Area as set forth above.

     4.4  Should the right of first refusal be exercised, the conditions which
          were offered to the Lessee, and which were accepted by it for the
          purpose of the exercise of a right of first refusal, shall be
          applicable to the Additional Area, as set forth in paragraph 52
          hereunder (hereinafter: "the Right of First Refusal Conditions").
          Furthermore, all the provisions of this Agreement shall be applicable,
          mutatis mutandis, to the Additional Area, and in any contradiction
          between the provisions of this Agreement and the Right of First
          Refusal Conditions, the Right of First Refusal Conditions shall be
          applicable.

5.   Lease of Parking
     ----------------

     Covered Parking
     ---------------

     5.1  The Company hereby lets to the Lessee, and the Lessee hereby leases
          from the Company, for the Lease Period as set forth in paragraph 7
          hereunder, areas constituting 25 covered parking bays for private
          motor vehicles on the underground basement level in the Building, as
          marked on the Drawing (Annex A) in yellow (hereinafter : "the Covered
          Parking Bays").

          In consideration for the Covered Parking Bays as aforesaid the Lessee
          shall pay a rental to the Company the sum of $ 70 per month for each
          parking bay, in addition to value added tax as required by law.

    5.2   The Lessee shall be entitled to give notice to the Company from time
          to time, at any time during the course of the Lease Period as set
          forth in paragraph 7 hereunder, that it wishes to increase the number
          of Covered Parking Bays allocated for its use, by way of giving 30
          days prior written notice thereof to the Company. Such notice shall
          set forth the number of additional Covered Parking Bays which the
          Lessee seeks to lease. In any event the overall number of Covered
          Parking Bays which may be let to the Lessee shall not exceed one
          Covered Parking Bay for every 20 square metres of the Area of the
          Premises as set forth in paragraph 3 above, including those areas
          leased following the exercise of the Option.
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          Should notice as aforesaid be delivered to the Company, the Company
          shall allocate to the Lessee, within 30 days from the date of delivery
          of notice, additional Covered Parking Bays in the number specified in
          such notice, based on the key set forth above.

          The Lessee shall pay the Company for the lease of the additional
          Covered Parking Bays the rental with respect to Covered Parking Bays
          as set forth in paragraph 5.1 above.

          It is hereby clarified that the Company shall be entitled to allocate
          additional Covered Parking Bays to the Lessee wherever it shall deem
          fit, according to its needs and in its sole discretion, and the Lessee
          shall have no inherent right of procurement and to receive additional
          Covered Parking Bays in any such specific or other location.

          It is agreed that in any event the number of Covered Parking Bays
          which may be let to the Lessee shall not exceed one Covered Parking
          Bay for every 20 square metres of the Area of the Premises.

          For the avoidance of doubt, it is stipulated that Covered Parking Bays
          allocated under this Agreement shall be marked and are fixed and the
          Company shall not change them same save with the consent of the
          Lessee.

     5.3  The Lessee shall be entitled to notify the Company once a year with
          effect from the Delivery Date of possession of the Premises, as set
          forth in paragraph 11.1 hereunder upon 3 months prior written notice,
          that it wishes to subtract 10 Covered Parking Bays from the parking
          facilities used by it.

          The choice and determination of the Parking Bays to be subtracted as
          aforesaid, shall be made in accordance with the Company's needs and as
          far as possible having regard to the needs of the Lessee.

          Non Covered Parking
          -------------------

     5.4  In addition to the Covered Parking Bays as aforesaid, the Company
          shall let 45 non-covered parking bays in the Park to the Lessee for
          private motor vehicles (hereinafter : "Open Parking Bays").

          In consideration for the Open Parking Bays as aforesaid the Lessee
          shall pay a rental to the Company in the sum of $ 45 per month for
          each
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                                       14

          parking bay, together with value added tax as applicable.

          The Company shall let the Open Parking Bays as aforesaid to the Lessee
          for a period of 24 months, commencing on the Delivery Date as defined
          in paragraph 11.1 hereunder. After the expiration of the period of 24
          months as aforesaid, possession the Open Parking Bays shall be
          restored to the Company and the Lessee shall not be entitled to
          further use thereof. Upon restoration of the Open Parking, Covered
          Parking shall be let to the Lessee and from the date of the lease of
          the Covered Parking as aforesaid in substitution for the Open Parking
          Bays, all the provisions of paragraphs 5.1 and 5.2 above shall be
          applicable to such Covered Parking, including those with respect to
          the rental as consideration for such Covered Parking. In regard to all
          the foregoing, it is hereby clarified that in relation to the Covered
          Parking which is let in substitution for the non covered parking, the
          provision that in any event the number of Covered Parking Bays which
          may be let to the Lessee shall not exceed one parking bay for each 20
          square metres of the Area of the Premises, shall be applicable.

          It is hereby agreed and stipulated that the Company shall be entitled
          to allocate the Open Parking Bays to the Lessee wherever in the Park's
          parking areas it shall deem fit and the Lessee shall have no inherent
          right to any specific or other location. Furthermore the Company shall
          be entitled to change from time to time the location of the Open
          Parking Bays in its sole discretion and in accordance with its needs,
          by giving prior written notice thereof to the Lessee.

     5.5  Upon the expiration of the lease of the Premises pursuant to this
          Agreement for any reason whatsoever, the lease of all Parking Bays of
          every kind as let to the Lessee at the same  time, shall also be
          terminated.

     5.6  For the avoidance of doubt, it is hereby stipulated that the Lessee
          shall not be required to be liable for compulsory payments, municipal
          rates and taxes with respect to any non covered parking,

6.   Purpose of the Lease
     --------------------

     The sole purpose of the lease is the conduct of a business and laboratory
     in the fields of electronics, video and communication and the storage of
     the Company's stocks only.

     The Lessee hereby expressly undertakes not to use the Premises or any part
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                                       15

     thereof for the whole of the Lease Period for any purpose whatsoever save
     for the purpose set forth in this paragraph.

7.   Lease Period
     ------------

     7.1   The lease under this Agreement shall be for a period of 60 months,
           commencing on the Delivery Date of possession to the Lessee, within
           the meaning attributed to this term in paragraph 11.1 hereunder
           (hereunder: "the Lease Period").

     7.2   The Lessee is hereby granted the right to extend the Lease Period for
           a further period of 30 months (hereinafter : "the First Additional
           Lease Period"), only on prior written notice to the Company not less
           than 6 months prior to the expiration of the Lease Period, and
           subject to the fulfilment of the provisions hereunder :

           7.2.1  The Lessee has complied with all its obligations under this
                  Agreement in their entirety and on their due date.
                  Notwithstanding the foregoing, it is agreed that a delay of 14
                  days in the fulfilment of any particular provision under this
                  Agreement shall not in itself prejudice the right of the
                  Lessee to an extension of the Lease Period under this
                  paragraph 7.2.

           7.2.2  In relation to the First Additional Lease Period, all the
                  provisions of this Agreement shall mutatis mutandis apply save
                  for the matter of rental, in regard to which the provisions of
                  paragraph 13.2 hereunder shall be applicable and save for the
                  right of extension of the Lease Period as set forth in this
                  paragraph 7.2.

     7.3   The Lessee is hereby granted the right to extend the Lease Period
           subsequent to its extension for the First Additional Lease Period,
           for a second additional period of a further 30 months (hereinafter :
           "the Second Additional Lease Period"), with respect to which all the
           provisions relating to the First Additional Lease Period as set forth
           in paragraph 7.2 above shall apply mutatis mutandis, including the
           conditions to which the right to extend the Lease Period for the
           First Additional Lease Period is subject.

           It is recorded that after exercise of the Second Additional Lease
           Period right, the Lessee shall not be granted a further right of
           extension of the

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                                       16

          Lease Period.

    7.4   For the avoidance of doubt, it is hereby stipulated that the
          provisions of this Agreement in relation to the Lease Period and/or
          the First or Second Additional Lease Period and this expiration, as
          set forth above, shall be applicable to all the Areas of the Premises
          including those areas which are the subject of the Option and/or of
          the right of first refusal.

8.  Non Application of Tenants Protection Laws
    ------------------------------------------

    It is hereby agreed between the parties as follows :

    8.1   Neither the lease, the Lessee nor the Premises are protected under the
          Tenants Protection Law and/or under the provisions of any other law,
          whether in existence or which may be enacted in the future - which
          protects in any manner whatsoever - a lessee or occupier, and the
          aforesaid laws, the amendments thereof and regulations and/or orders
          which have been and/or may be promulgated by virtue thereof do not nor
          shall be applicable to the lease and to the Lessee under this
          Agreement.

    8.2   The structure is a new building the construction of which was
          completed after 1971 and hence on 20th August 1968 no occupier had
          been entitled to occupation of the Premises; the Premises constitute a
          new property within the meaning attributed to this term in section 14
          (a) of the Tenants Protection Law and the Lessee has not been
          requested to pay nor has it paid key money or any other payments to
          the Company capable of being regarded as key money.

    8.3   Since neither the Premises nor the lease under this Agreement are
          protected by virtue of the Tenants Protection Law, at the time of the
          vacating of the Premises - whether as a result of the expiration of
          the Lease Period or as a result of its discontinuance for any other
          reason whatsoever - the Lessee shall not be entitled to receive from
          the Company and/or from any other entity any consideration whatsoever
          for such vacating either as key money, as payment for additions and
          improvements or for any other reason.

9.  Management Agreement
    --------------------
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                                       17

    In conjunction with this Lease Agreement and as an integral part hereof,
    the Lessee shall enter into the Management Agreement attached to this Lease
    Agreement as Annex B (hereinabove and hereinafter : "the Management
                 -------
    Agreement").

                    Second Section - Delivery of Possession
                    ---------------------------------------

10. The Technical Specification
    ---------------------------

    The Company shall erect the Premises in accordance with the Technical
    Specification attached as Annex C to this Agreement.
                              -------

11. Delivery of Possession of the Premises
    --------------------------------------

    11.1  The Company shall deliver possession of the Premises to the Lessee,
          suitable for use and constructed as stipulated in this Agreement in
          accordance with the Technical Specification (Annex C), on 1st April
          2000 (hereinafter : "the Delivery Date"). Notwithstanding the
          foregoing, the Lessee shall have the right to request the Company to
          advance the Delivery Date by giving 4 months prior written notice.
          Should the Lessee have given notice as aforesaid of its desire to
          advance the Delivery Date, delivery shall be effected within 4 months
          from the date of such aforesaid notice having been given. The
          Company's aforesaid obligation shall be conditional upon the Lessee
          for its part having fulfilled all such obligations as it is required
          so to fulfil under the provisions of this Agreement prior to
                                                              --------
          obtaining possession of the Premises.

          It is recorded that the Premises shall be regarded as suitable for
          delivery to the Lessee as set forth in this paragraph 11.1 once they
          are suitable for use, constructed in accordance with the Technical
          Specification, permanently connected to the water and electricity
          systems, capable of being connected to the Bezeq network and there is
          reasonable and safe access to the Building and to the Premises, both
          for the passage of pedestrians and for transit of private motor
          vehicles to parking areas.

    11.2  Notwithstanding the provisions of sub-paragraph 11.1 above, it is
          hereby agreed that in relation to the areas comprised within the
          Premises located on the third floor of the Building, the Company shall
          be entitled to effect delivery at an earlier date, after it shall have
          given not less than 28 days prior written notice thereof to the
          Lessee, but in any event not
<PAGE>

                                       18

          before 3/rd/ October 1999. Should the Company have given notice as to
          the advance of the Delivery Date as aforesaid, the Lessee undertakes
          to accept the aforesaid areas and all the provisions of this Agreement
          shall be applicable with respect thereto.

    11.3  The Company undertakes to give not less than 28 days advance notice
          and prior to the Delivery Date in regard to :

          11.3.1  The dates for the inspection of the condition of the Premises.

          11.3.2  The Delivery Date of possession of the Premises.

          11.3.3  The date on which the Lessee is given the right to enter upon
                  the Premises for the purpose of carrying out the necessary
                  works for the Lessee for the purpose of its entry into the
                  Premises.

    11.4  The Company undertakes that not less than 14 (fourteen) days prior to
          delivery of possession of the Premises, it shall complete the laying
          of the carpets in the Premises.

    11.5  The Lessee undertakes to attend at the Premises on the date of the
          inspection of the Premises, at a time to be determined by the Company
          as set out in paragraph 11.3 above, to examine the Premises and to
          verify to the Company the condition of the Premises and its conformity
          with the Technical Specification, in a protocol as prescribed in
          paragraph 11.10 hereunder.

    11.6  In addition to the provisions of sub-paragraph 11.5 above, the Lessee
          shall be obliged to attend at the Premises on the Delivery Date in
          order to accept possession of the Premises, and the signature by both
          parties on the protocol of the delivery of the Premises shall
          constitute proof of delivery of possession.

    11.7  Should the construction of the Premises be completed and the Lessee
          fail to appear to accept possession of the Premises on the date
          prescribed by the Company as set forth in paragraph 11.6 above, or
          should it appear and refuse to accept possession of the Premises, the
          Company shall again invite it to appear on a further date scheduled
          for 7 days from the date of dispatch of the invitation. Should the
          Lessee fail to appear to accept possession of the Premises or refuse
          to accept possession of the Premises on such postponed date, this date
          shall be regarded as the Delivery Date for all intents and purposes
          relating to the Lessee's obligations under this Agreement, including,
          and without derogating
<PAGE>

                                       19

          from the generality of the foregoing, effecting payments (including
          those by virtue of the Management Agreement), responsibility for the
          condition of the Premises, for the maintenance and preservation
          thereof and liability for all the costs, taxes and levies flowing from
          possession of the Premises.

    11.8  It is recorded that the Lessee shall not undertake any work on the
          Premises, nor shall it install any fixture nor introduce any movables
          onto the Premises so long as it shall not have completed the procedure
          for inspection of the Premises as laid down in paragraphs 11.5 and
          11.6 above.

    11.9  For the avoidance of doubt it is hereby stipulated that prior to
          delivery of possession of the Premises to the Lessee, at any time that
          the Lessee may be on the Premises including its presence within the
          framework of carrying out works under paragraph 11.3.3, it shall be
          regarded as an invitee only without any right of possession
          whatsoever.

    11.10 On the date of the inspection of the Premises as set forth in
          paragraphs and 11.5 above, a protocol of the inspection of the
          Premises shall be prepared which shall be recorded by a representative
          of the Company or by a person acting on its behalf and which shall be
          signed by both parties. The Lessee shall confirm that it has seen and
          inspected the Premises and that the construction thereof conforms to
          the Technical Specification. Should the Lessee be of the opinion that
          the Premises are not in conformity with the Technical Specification
          and/or that any  works have not been completed and/or have not been
          carried out as agreed, it shall itemise its objections in the protocol
          of the inspection of the Premises.

    11.11 Should the Lessee indicate in the protocol of the inspection of the
          Premises that the condition of the Premises is not, in its opinion, in
          conformity with the Technical Specification, the Supervisor shall
          investigate its claims within 7 days and should it be found that there
          is substance in such claims, or in any part thereof, the Company shall
          attend to the remedy thereof as soon as possible. It is agreed that
          repairs and/or non conformities with the Technical Specification which
          are not sufficient to prevent the reasonable use of the Premises by
          the Lessee, and which have been indicated in the protocol of the
          inspection of the Premises, shall not constitute grounds for the
          postponement of the Delivery Date.
<PAGE>

                                       20

    11.12 As soon as may be after the date of the inspection of the Premises
          and at such time as is prescribed under paragraph 11.3 above, the
          Lessee shall accept possession of the Premises. The receipt of the
          keys of the Premises by the Lessee and its signature of the protocol
          of the delivery of the Premises shall constitute proof that the Lessee
          has received the Premises finished and completed in accordance with
          this Agreement and that save for those matters itemised in the
          protocol of the inspection of the Premises, if any, and that it has no
          claim or demand against the Company in connection therewith.

12.  Postponement of the Delivery Date
     ---------------------------------

    12.1  Should as a result of factors which are not dependant on the Company
          or over which the Company has no control or should as a result of
          force majeure, any interruption in construction take place, or should
          there be any delay in the completion of the Premises, the date on
          which the Company is obliged to complete the construction of the
          Premises shall be postponed for the period of time reasonably
          necessitated by such interruption or delay as aforesaid, provided that
          the Company shall have taken reasonable steps in good time in order to
          prevent or reduce the delay in the delivery of the Premises as a
          result of one of the foregoing causes, including consultation with the
          Lessee's representative.

          For the avoidance of doubt, it is hereby expressly declared that any
          extension determined under this paragraph shall not entitle the Lessee
          to any rebate in rental or to the payment of compensation and/or any
          expenses whatsoever. However, should the aforesaid interruption and/or
          delay continue for 6 months, the Lessee shall be entitled to be
          released from its obligations under this Agreement, on dispatch of 30
          days advance written notice of cancellation. Should the Lessee cancel
          this Agreement in pursuant to this sub-paragraph 12.1 and in the
          circumstances described in this sub-paragraph, the parties shall
          relinquish the contractual arrangements between them without either
          party having any claim, cause of action, demand or such like against
          the other in connection with the cancellation of the Agreement.

    12.2  Notwithstanding any provisions contained in this Agreement, a delay in
<PAGE>

                                       21

          the completion of the Premises and delivery thereof to the Lessee not
          exceeding 14 days, as well as any delay arising from the causes
          enumerated in paragraph 12.1 above, shall not constitute a breach of
          the Company's obligations under this Agreement and shall not entitle
          the Lessee to any remedy whatsoever.

    12.3  Any delay in effecting delivery other than in pursuance of paragraphs
          12.1 and/or 12.2 above shall entitle the Lessee to agreed compensation
          of $ 650 for each day of delay.

    12.4  It is hereby agreed and recorded that the Delivery Date of possession
          of the Premises to the Lessee as set forth in paragraph 11.1 above  is
          determined by the parties having regard to and on the basis of the
          Technical Specification and of the works involved in the completion of
          the Premises in accordance therewith. Accordingly, in any instance of
          substantial changes to be made to the Technical Specification at any
          time after signature of this Agreement, the Delivery Date shall be
          postponed for a period of time reasonably necessitated by such changes
          to the Technical Specification.

          For the avoidance of doubt it is clarified that changes to the
          Technical Specification may be made only at the request of the Lessee
          on prior written notice to the Company and with its approval.

                       Third Section - the Consideration
                       ---------------------------------

13. The Basic Rental
    ----------------

    The parties hereby agree as follows :

    13.1  The rental payable by the Lessee to the Company shall be an amount in
          new Israeli shekels equivalent to $ 13.30 (thirteen United States
          dollars and thirty cents) per month for each square meter of the Area
          of the Premises, in accordance with the manner of computation of the
          area thereof as set forth above (hereinafter : "the Rental Fee").

          The Lessee shall be entitled to give written notice to the Company, by
          _________ as to its wish to subtract certain items from those
<PAGE>

                                       22

          components of the Technical Specification which are in addition to and
          beyond the standard specification as applied by the Company and which
          had been included in the Technical Specification by agreement between
          the parties, by detailing the number of the subtracted items
          (hereinafter : "the Subtraction from the Technical Specification"),
          provided that the subtraction of these items from the Technical
          Specification is feasible from a technical - implementation aspect,
          and does not prejudice the normal course of completion of the
          Premises.

          Should the Lessee give notice of its wish to subtract from the
          Technical Specification as aforesaid, the Company's Engineer shall
          determine, in consultation with the Lessee's architect the monetary
          value of the aforesaid subtraction. Should the Company's Engineer and
          the Lessee's architect fail to reach agreement as regards the monetary
          value of the aforesaid subtraction within 14 days from the date of
          notification by the Lessee as to its wish to subtract from the
          Technical Specification, the parties shall appoint an referee by
          consensus who shall adjudicate within 7 days of referral by either
          party on the monetary value of the aforesaid subtraction.

          Should items to the overall value of $10,000 (ten thousand United
          States dollars) be subtracted from the Technical Specification, the
          Rental Fee shall be reduced by an amount in new Israeli shekels equal
          to $0.04 (four United States cents) for every square metre of the Area
          of the Premises. For example, should items to the overall value of
          $20,000 (twenty thousand United States dollars) be subtracted from the
          Technical Specification, the Rental Fee payable by the Lessee to the
          Company shall be an amount in new Israel shekels equal to $13.22
          (thirteen United States dollars and twenty two cents) per month for
          every square metre of the Area of the Premises, in accordance with the
          manner of computation of the Area thereof as set forth above.

          The Rental Fee shall be paid by the Lessee to the Company in its
          shekel value in accordance with the representative rate of exchange of
          the United States dollar on the date of signature of this Agreement
          together with differentials linked to the Index as set forth hereunder
          with effect from the date of signature of this Agreement to the actual
          date of effecting each of the Rental Fee payments.

          The component of the differentials linked to the Index comprised
          within the Rental Fee as aforesaid, shall be computed in accordance
          with the following definitions :
<PAGE>

                                       23

          The Base Index :        The Index as published on 15th April 1999 and
          --------------          standing at 163.9497 points.

          The New Index :         The latest Index as published from time to
          -------------           time prior to the date prescribed in this
                                  Agreement for effecting payment of the Rental
                                  Fee.

          Linkage Differentials : The difference between the New Index and the
          ---------------------   Base Index, divided by the Base Index and
                                  multiplied by the Rental Fee at the above
                                  rate.

    13.2  Should the Lessee exercise its right as set forth in paragraph 7.2
          above to extend the Lease Period for the First Additional Lease
          Period, a Rental Fee 7% higher than the last Rental Fee payable during
          the Lease Period shall be due with respect to the Additional Lease
          Period, and all the remaining conditions set out above shall apply in
          connection therewith, mutatis mutandis.

    13.3  Should the Lessee exercise its right as set forth in paragraph 7.3
          above to extend the Lease Period for the Second Additional Lease
          Period, a rental 5% higher than the last Rental payable during the
          First Additional Lease Period shall be due with respect to the First
          Additional Lease Period, and all the remaining conditions set out
          above shall apply in connection therewith, mutatis mutandis.

14. Manner of Payment of the Rental Fee
    -----------------------------------

    14.1  The Lessee shall pay to the Company on the first day of the first
          month of each quarter (3 months) during the Lease Period, the Rental
          Fee for the Premises and the Rental Fee for the parking for that
          quarter, with effect from the Delivery Date of possession of the
          Premises as set forth in paragraph 11 above.

    14.2  The Lessee shall be responsible for value added tax on the aforesaid
          Rental Fee payments and shall pay the amount of value added tax to the
          Company on 15/th/of the month of each quarter as set forth in
          paragraph 14.1 above, against receipt of an appropriate tax invoice, 7
          (seven) days prior to 15/th/of the month as aforesaid.
<PAGE>

                                       24

    14.3  Should the Delivery Date of possession not occur on the date
          prescribed therefor in this Agreement, then the Lessee shall pay the
          Rental Fee for the period up to the commencement of the quarter
          following the Delivery Date of possession, and from the date of
          commencement of the following quarter as aforesaid and thereafter the
          provisions contained in paragraph 14.1 shall be applicable.

15. Mortgage of the Company's Rights under this Agreement to the Bank
    -----------------------------------------------------------------

    The Company is mortgaging and assigning to Bank Hapoalim Ltd. (hereinafter :
    "the Bank"), in an assignment by way of mortgage, all its rights vis a vis
    the Lessee under this Agreement, and hereby furnishes the Lessee with an
    irrevocable instruction to pay the Rental and all other amounts due and to
    become due to it by the Lessee under this Agreement into a special account
    numbered 421006 at the Balfour Branch (Branch No. 527) of the Bank.
    Signature by the Lessee of the Lease Agreement constitutes an undertaken on
    its part in favour of the Bank to act as aforesaid. In accordance therewith,
    the Lessee hereby undertakes that the payments for which it is liable under
    the provisions of this Agreement shall be paid into the aforesaid special
    account. The Lessee shall continue to pay the Rental to the Bank as set out
    above for so long as it shall not have received written notice otherwise in
    this regard from the Company.

    The Lessee shall not be responsible or be liable to the Company and/or to
    the Bank in any matter relating to the aforesaid mortgage, save for its
    express obligation towards the Company and the Bank, to remit the Rental Fee
    for the Premises, as set out in this Agreement, to the Bank into the special
    account as aforesaid.

             Fourth Section - Additional Payments Due by the Lessee
             ------------------------------------------------------

16. Liability for Payment thereof
    -----------------------------

    In addition to the Rental Fee which the Lessee is obliged to pay to the
    Company under this Agreement, the Lessee hereby undertakes to pay to the
    competent authorities and/or to the Company the amounts set forth hereunder
    in this section.

17. Taxes
    -----
<PAGE>

                                       25

    The Lessee hereby undertakes to pay to the governmental and municipal
    authorities :

    17.1  All such duties, levies, rates, taxes and other compulsory payments,
          both governmental and municipal, as are imposed and/or which may be
          imposed in the future on a lessee and/or occupier of the Premises,
          whether with respect to the Premises themselves, or arising from the
          use thereof, as well as with respect to the Covered Parking Bays
          leased by the Lessee under this Agreement and arising from the use
          thereof.

    17.2  All such duties, levies, rates, taxes and other compulsory payments,
          both governmental and municipal, as are imposed and/or which might be
          imposed in the future on the business conducted by the Lessee on the
          Premises, including - but without derogating from the generality of
          the foregoing - business licence fees, sign tax, business tax and the
          like.

    17.3  The Company shall have the right to demand and to obtain from the
          Lessee, in advance, all payments with respect to municipal taxes and
          other compulsory taxes as set forth above, for the purpose of the
          remittance of payments to the authorities on due date, provided that
          the Company shall have conveyed to the Lessee the appropriate demand
          for payment.

18. Telephone, Electricity, Water and Maintenance
    ---------------------------------------------

    18.1  The Lessee shall pay all costs relating to the use of a telephone
          direct to the communications service provider, in accordance with the
          reading on a meter which the communications service provider shall
          install on the Premises. It is hereby clarified that no cost
          whatsoever shall be occasioned to the Lessee for the installation of
          the foregoing meter, and such cost, if any, shall be borne by the
          Company.

    18.2  The Lessee shall pay to the Company :

          (a)  The costs of water consumption on the Premises in accordance with
               the reading on a meter which the Company shall install on the
               Premises, the operation of which is the measurement of water
               consumption only on the Premises. It is hereby recorded that no
               cost whatsoever shall be occasioned to the Lessee for the
               installation of the foregoing meter, and such cost, if any, shall
               be borne by the Company.

          (b)  The cost of electricity consumption in accordance with the
<PAGE>

                                       26

               reading on a separate meter which the Company shall install on
               the Premises, the operation of which is the measurement of
               electricity consumption only on the Premises. It is hereby
               clarified that no cost whatsoever shall be occasioned to the
               Lessee for the installation of the foregoing meter, and such
               cost, if any, shall be borne by the Company.

         (c)   The costs and payments set forth in the Management Agreement.

                   Fifth Section - Obligations of the Parties
                   ------------------------------------------

Obligations of the Lessee
-------------------------

19. Lessee's Obligation to Effect Payments
    --------------------------------------

    The Lessee is obliged to pay to the Company the whole of the Rental Fee and
    all other payments which it undertook to pay in pursuant to this Agreement,
    irrespective of whether or not the Premises are being used, whatever the
    reason for such non use of the Premises may be, save if the Lease Period has
    duly expired. The Lessee shall not be entitled to and shall be precluded
    from raising any claim against its absolute obligation to pay Rental Fees to
    the Company in accordance with this Lease Agreement.

20. Limitation on the Use of the Premises
    -------------------------------------

    20.1  The Lessee shall not be entitled to install dining halls, kitchens and
          such like on the Premises unless it shall have obtained prior written
          approval therefor from the Company, and should such aforesaid approval
          be given, it shall be obliged to act only in accordance with such
          conditions as shall be prescribed - to the extent so prescribed - in
          the aforesaid approval.

          Notwithstanding the foregoing, the Lessee shall be entitled to install
          on each floor of the Premises a kitchenette in the area marked in the
          colour _______ on the Drawing attached as Annex A to this Contract.

    20.2  It is hereby expressly agreed that the Lessee shall not be entitled to
          grant and to confer rights for the placement of automatic food and
          beverages vending machines on the Premises, unless it shall have
          obtained prior written approval therefor from the Company.

21. Signs
    -----
<PAGE>

                                       27

    21.1  The Lessee shall not erect signs on the Premises save on the authority
          of the Company furnished in writing. For the avoidance of doubt, it is
          hereby stipulated that the obligation and responsibility for
          obtaining a sign licence from the authority authorised thereto under
          any law is imposed on the Lessee as well as to pay any duty and/or
          levy which is payable under any law to the competent authorities. In
          the event of the erection of an illuminated sign, the Lessee shall be
          obliged to install an electricity connection at its cost and to bear
          the cost of the supply of electricity to such sign. In any event the
          Lessee may not erect signs on the Premises prior to receipt of a
          licence under any law for the installation thereof as aforesaid.

    21.2  The Lessee's signs shall be affixed only with the consent of the
          building designer acting on behalf of the Company and with his
          approval. The Company shall be entitled to prescribe the form of the
          sign and the size thereof, and the Lessee shall be obliged to install
          such sign in accordance with such determination by the Company.

    21.3  The Company shall be entitled to remove at the expense of the Lessee
          any sign erected by it in breach of the provisions of this paragraph.

    21.4  The Lessee declares that it has no objection to and that it agrees
          that the Company shall be entitled at its discretion to erect the
          Company's signs and/or those of the company Azorim Investments Ltd.
          and/or the company Azorim Properties Ltd. on the roof of the Building.
          Furthermore, it is agreed that the Company shall be entitled to attach
          a sign to the walls of the Building which includes the name of the
          Company.

    21.5  The Lessee declares that it has no objection to and that it agrees
          that other lessees and/or occupiers in the Building may erect signage
          on their behalf on the roof of the Building and/or on the external
          walls thereof, subject to the directions of the Company and to such
          conditions as are prescribed by it and with its prior approval,
          provided that there shall be no signs of an advertising nature only.

    21.6  It is hereby clarified that the signs on the Building, including the
          signage in the lobby of the Building, shall be uniform and the
          Company, in its sole discretion, may determine the location of the
          placement of such sign, their form and the materials from which they
          are made. The Lessee shall be referred by the Company to the
          manufacturer / contractor who is to carry out the signs on the
          Building for the purpose of ordering signs
<PAGE>

                                       28

          for the Lessee's purposes.

          The Lessee undertakes not to undertake installation of any sign,
          including any within the Building, contrary to the foregoing.

22. Service Lifts
    -------------

    22.1  The Lessee hereby declares that it is aware that one of the lifts on
          the Premises is also to be used for the haulage of loads. The Lessee
          hereby undertakes to inform any entity due to deliver loads of any
          kind and nature whatsoever to it that it is obliged to do so by means
          of the aforesaid lift.

    22.2  The Company hereby undertakes to effect the modification the controls
          in the aforesaid lift so that employees of the Lessee and/or any
          person on its behalf who is supplied with a suitable key, may make
          sole use of this lift for the purpose of haulage of loads and goods to
          the Premises only, for a period of time not exceeding 15 (fifteen)
          protocols at any time, and subject to the technical limitation of the
          lift and the manufacturer's instructions regarding the haulage of
          loads and goods.

23. Observance of Laws
    ------------------

    The parties shall comply with the provisions of any law relating to the
    Premises and the use thereof. Generally, the Lessee undertakes to comply
    with all the laws, regulations and by-laws and requirements of any competent
    authority applicable and/or which may be applicable to the Premises during
    the Lease Period, concerning the use thereof and relating to the Lessee's
    business and operations of every nature on the Premises.

24. Sewage
    ------

    The Lessee hereby undertakes not to discharge into the sewage network, or to
    cause to discharge into it any waste which, from the aspect of its
    properties, is incompatible with any directives of the Ministry of Health on
    that subject.

25. Prohibition against the Installation of Air Conditioners
    --------------------------------------------------------

    For the avoidance of doubt, it is hereby expressly clarified that the Lessee
    shall not be entitled to install air conditioners in the walls and/or in the
    windows of the Premises.

26. Limitation on the Use of the Remainder of the Building Structure
    ----------------------------------------------------------------
<PAGE>

                                       29

    The Lessee hereby undertakes not to keep any materials, tools, equipment,
    products, stocks and any other movable property outside the Premises and it
    shall not be entitled to use any area and/or any part of the Building other
    than the Premises for any purpose whatsoever, save for the use of the modes
    of access to the Premises.

    It is hereby agreed as follows :

    26.1  Should notwithstanding the provisions of this paragraph any movable
          property whatsoever belonging to the Lessee be found outside the
          Premises and should it fail to remove the same upon the Company's
          first demand, the Company shall be entitled - but not obliged - to
          remove such movable property from the Building and/or from the Park at
          the Lessee's expense, without its bearing any responsible for their
          remaining intact.

    26.2  The non exercise by the Company of its rights under sub-paragraph 26.1
          above shall not be construed as any assent on its part to the
          aforesaid movable property remaining outside the Premises, nor as
          conferring on the Lessee any right to continue to keep such movable
          property there, nor as precluding the Company from taking any
          proceedings to which it is entitled by law and/or under the conditions
          of this Agreement.

27. Public Areas and Common Property
    --------------------------------

    27.1  It is hereby agreed and declared that the public areas and the common
          property in the Park (as determined solely by the Company) including
          roads, pavements, gardens, lawns and so forth, and the public areas
          and common property within the Building, including roofs, shelters,
          basements, the entrances and the lobby of the Building and such like,
          shall pass into the sole possession of the Company and the Lessee
          shall have no rights of any kind in relation to the aforesaid areas.

    27.2  The Lessee shall not be entitled to make any use whatsoever of the
          public areas in the Park and/or within the Building and/or in those
          areas which are outside the Premises, other that for the purpose for
          which such public areas were intended.

    27.3  (a)  The meaning of the common property is - as defined in
               paragraph 2.1 of the Management Agreement (Annex B).
<PAGE>

                                       30

          (b)  The Lessee shall be entitled to make use of the common property
               only in accordance with the purposes and/or designations and/or
               uses for which such common property is intended. The Company
               shall be entitled from time to time, in its sole discretion, to
               allow any third party the use of one or another part of the
               common property for such purposes as shall be determined by it,
               provided that in so doing there shall be no prejudice to the use
               by the Lessee of the Premises pursuant to  this Agreement.

          (c)  For the avoidance of doubt, the Lessee hereby declares that it is
               aware that it shall be entitled to make use of the common
               property areas only in accordance with the provisions of any law
               and of this Agreement.

28. Cleanliness, Preservation and Repair of the Premises
    ----------------------------------------------------

    28.1  The Lessee hereby undertakes to use the Premises in a prudent and
          reasonable manner, to keep the Premises, the Building and the Park
          clean and to prevent any damage and/or deterioration of the Premises
          and the Building (save for deterioration caused as a result of wear
          arising from ordinary and reasonable use). Without derogating from the
          generality of the foregoing, the Lessee undertakes  that it shall
          remove any waste from the Premises and see to the disposal by it
          and/or by its employees and/or any person acting on its behalf of such
          waste only in places designated therefor within the area of the Park.

    28.2  The Lessee shall be obliged to repair, immediately and at its expense,
          any damage and/or deterioration caused to the Premises and/or the
          Building by it and/or by its employees and/or by its users and/or by
          any person acting on its behalf, save for deterioration caused as a
          result of wear arising from ordinary and reasonable use and save for
          repairs the obligation for the repair of which rests with the Company,
          such as construction flaws during the inspection period.

    28.3  Should the Lessee fail to effect any repair for which it is liable by
          virtue of the provisions of sub-paragraph 28.2 above, the Company
          shall be entitled - but not obliged - to effect the aforesaid repair
          at the Lessee's expense, and the Lessee shall be obliged to refund to
          the Company the entire amount which had been expended by it in
          effecting such repair together with interest and linkage at the rate
          specified in sub-paragraph 43.1, or where the linkage differentials
          and interest are reckoned from the date of disbursement of the monies
          by the Company until the actual
<PAGE>

                                       31

          refund thereof to it.

29. Preservation of the Premises, Alterations to the Premises, Shed
    ---------------------------------------------------------------

    29.1  The Lessee hereby undertakes not to prepare nor to carry out on the
          Premises or in any part thereof, in its systems and in its
          installations, any alterations and/or additions and/or improvements
          and/or construction works of any scope or nature (hereinafter : "the
          Additions") without having obtained prior written approval therefor
          from the Company, save for carrying out acts and works under
          paragraphs 11.3.3 and 28.2 above. The Company shall be entitled - but
          not obliged, at its sole discretion - to approve the aforesaid works
          or any part thereof and to stipulate the execution thereof on
          specified conditions, including the matter of insurance of such works
          and the execution thereof, and in accordance with a specification and
          measurements to be furnished by the Lessee and approved by the
          Company, and as to the manner of execution with minimum interference,
          if any, to other occupiers of the Building and/or of the Park.

    29.2  (a)  Should the Lessee request to make use of the walls of the
               Premises and/or the ceilings and roof systems of the Premises
               and/or the Building and/or other components of the Premises for
               the purpose of the affixing or loading of installations and/or
               items of any nature whatsoever, of considerable weight and which
               might be injurious thereto, the Lessee shall be obliged to obtain
               the Company's written consent prior to such aforesaid execution.

          (b)  The Lessee shall be entitled to remove any Addition effected to
               the Premises in accordance with the foregoing provisions,
               provided that it reinstates the Premises to their former
               condition. The Lessee shall be entitled to leave the Addition on
               the Premises. Should the Addition be left on the Premises, the
               Addition shall become the property of the Company without any
               consideration whatsoever being furnished by the Company.

          (c)  The Company shall be entitled to remove or demolish any Addition
               effected by the Lessee without its consent, or to reinstate the
               Premises to their former condition and the Lessee shall be
               responsible for any expense occasioned to the Company in
               connection therewith.

          (d)  Notwithstanding the provisions of this paragraph, the Lessee
               shall
<PAGE>

                                       32

               be entitled at any time up to the expiration of the Lease Period,
               to dismantle any Addition installed on the Premises with the
               consent of the Company and to deal therewith, after the
               dismantling thereof, as owner subject to the Lessee not causing
               any damage to the Premises by the dismantling of the Addition.
               Generally, it is recorded that any Additions which are
               permanently affixed to the Premises shall not be dismantled
               notwithstanding the foregoing, unless the prior written consent
               of the Company shall have been obtained.

     29.3 (a)  The Lessee declares and acknowledges that it is aware that the
               erection of an Addition (galleries and/or sheds) on the Premises,
               should this be possible in accordance with the applicable Urban
               Building Scheme in connection with the Land and/or the Building,
               is subject to a building permit being obtained from the relevant
               planning authorities.

               A gallery in this regard means - the addition of a floor to an
               area of the Premises, built within space on the Premises, between
               the floor and ceiling.

          (b)  Should the Lessee apply to erect an Addition on the Premises and
               receive the Company's consent thereto, it shall be obliged to
               obtain an appropriate building permit for the purpose of the
               erection of the Addition, and to bear the permit fee and/or any
               other amounts payable to the Israel Lands Administration as well
               as all such levies and duties as are required to be paid to the
               Israel Lands Administration and/or to the local committee and/or
               local authority as a condition for the receipt of a building
               permit, without in so doing any liability whatsoever being
               imposed on the Company, whether a planning liability or any other
               liability.

               Subject to the foregoing, any plan for the erection of an
               Addition shall be submitted in the first instance for approval by
               the Company and the Company shall be entitled to refuse to
               approve the aforesaid plan so submitted, should it be of the
               opinion that the approval of the aforesaid plan could jeopardise
               any of its building rights or any other of its rights.
<PAGE>

                                       33

    29.4  Should the Company be liable for the payment of a betterment levy
          arising out of the erection of an Addition and/or a shed and/or
          through the Lessee - irrespective of whether or not the Company's
          consent has been obtained - the Lessee shall be obliged to pay such
          betterment levy or to reimburse the amount of such betterment levy to
          the Company, if paid by the Company, within 30 days from the date of
          dispatch of a notice demanding payment thereof.

30. Prevention of a Nuisance
    ------------------------

    30.1  The Lessee shall not keep within the Premises or in the vicinity
          thereof, nor shall it make use of any material or object which is
          likely to be easily combustible, to burst, to be poisonous or to cause
          any material damage and/or bodily injury whatsoever, and/or any other
          material involving risk to the structure, occupiers and/or visitors to
          the Building and the Park. Should it be necessary for the Lessee, for
          the purpose of the exercise of the purpose of the lease, to keep and
          use any material or object as enumerated above, it shall do so only
          after obtaining the prior written approval of the Company, and - in
          the event of the grant of such approval - it shall implement with
          respect to such material and object as aforesaid, such safety,
          equipment and material arrangements as are required under any law.

    30.2  The Lessee and the Company, inasmuch that it itself and inasmuch that
          another lessee occupies and uses an area of the Building, shall
          prevent the creation of any nuisance whatsoever, and in general the
          Lessee and the Company undertake not to create a high level of noise,
          nor to cause odours and shocks likely to cause a disturbance to the
          Company, the Lessee and/or other businesses in the Park.

    30.3  In the event of a breach of the provisions of paragraph 30.1 above,
          the Lessee and the Company undertake to discontinue such nuisance
          within 7 days from the date of receipt of a letter of demand from the
          Company or the Lessee. Without derogating from the foregoing, in
          addition to any other right available to the Company or Lessee under
          this Agreement and/or under the provisions of law, the Company or the
          Lessee shall be
<PAGE>

                                       34

          entitled to carry out any inspection and/or measurement and/or repair
          and/or any other act as the Company or the Lessee shall see fit for
          reinstatement of the former situation and/or removal of the nuisance.
          All the costs arising with respect thereto incurred by the Company or
          by the Lessee shall be due and payable by the Lessee or the Company
          respectively.

          The Lessee and the Company hereby undertake to refund to the Company
          or to the Lessee, respectively, any amount incurred as set out above,
          together with linkage differentials and interest as set forth in
          paragraph 46.1 or interest alone as set forth in paragraph 46.2, from
          the date of disbursement of such amount to date of reimbursement
          thereof by the Lessee.

31. Occupiers of the Building
    -------------------------

    The Company undertakes that in any contractual arrangements for the sale or
    letting of areas in the Building it shall include an obligation on the part
    of the purchasers and/or lessees to refrain from causing any nuisance
    according to law, to act in accordance with and subject to the law and to
    observe the provisions of the urban building scheme which is or which shall
    become applicable to the Building.

32. The Company's Obligations
    -------------------------

    It is agreed that should the Lessee be required to pay any amount whatsoever
    or be obliged within the framework of an action or any other proceedings, to
    pay any monies whatsoever to any financial authority as a result of non
    compliance by the Company with the conditions of the Development Agreement
    and/or any other condition for which the Company is liable to any financial
    authority, whether contained in the Development Agreement or external
    thereto, the Company shall indemnify the Lessee against any amount for which
    it is liable as aforesaid and shall compensate the Lessee for any expense
    actually incurred by it in connection therewith. The indemnity and
    compensation as aforesaid shall cover legal costs, including attorneys'
    fees. It is hereby clarified that all the foregoing contained in this sub-
    paragraph shall be subject to the Company being given notice by the Lessee
    as to any demand and/or claim or proceedings as aforesaid immediately upon
    receipt thereof by the Lessee, and that the Company is given the right and
    the opportunity to defend the claim and the dismissal thereof, including by
    way of joining the Company to such proceedings as a third party. The Company
    shall not object to the erasure of the Lessee from the action as aforesaid,
    should the Company
<PAGE>

                                       35

    be joined as a third party or alternatively should it have been the
    defendant from inception.

    Should the Company delay the payment of any amount which it is obliged to
    make to the Lessee under the provisions of this Agreement, without
    derogating from the Lessee's right to obtain any other relief to which it is
    entitled under this Agreement and/or according to any law, it shall be
    entitled to receive interest at the rate specified in sub-paragraph 46.2
    hereunder from the Company, reckoned from the due date of payment to the
    date of actual payment, or linkage to the Index, together with the maximum
    interest which Bank Hapoalim Ltd. would recover as at the date of payment
    arising from loans linked to the Index, at the Lessee's election.

33. Ancillary Services in the Park
    ------------------------------

    33.1  Should the number of those interested in an annual subscription to a
          health and sports club (hereinafter : "SPA") in the Park reach 200
          persons, and such persons wish to purchase subscriptions from the
          Company, the Company and/or the Management Company shall attend to the
          operation of the SPA. Should the SPA operate as aforesaid, the cost of
          an annual subscription shall be NIS 125 per month, linked to the Index
          together with value added tax as applicable.

          Subscriptions for the SPA services shall be issued, as far as
          possible, only to occupiers of the Park.

    33.2  The Company and/or the Management Company shall attend to the
          operation of a catering centre in the Park, with effect from the
          Delivery date of possession of the Premises as set forth in paragraph
          11 above.

                    Sixth Section - Liability and Insurance
                    ---------------------------------------

34. Liability for Damage
    --------------------

<PAGE>

                                       36

     34.1 The Lessee shall be liable for any loss, harm or damage of any kind
          and nature whatsoever, to person and/or property, occasioned to the
          Company and/or the Management Company (should it be incorporated)
          and/or any person on their behalf and/or any third parties whatsoever
          including - but without derogating from the generality of the
          foregoing - visitors to the Park and/or employees of the Company
          and/or employees of the Lessee and/or the Lessee' customers and/or
          other customers, should such loss, harm or damage as aforesaid have
          resulted directly or indirectly from the Lessee's activity on the
          Premises and/or from the state of the Premises (but save for damage
          resulting from defects in the construction of the Premises or in the
          maintenance thereof by the Company and/or the Management Company)
          and/or caused by and/or my means of the equipment and/or fittings on
          the Premises and/or should it be caused during the course of and/or as
          a result of works which are carried out on the Premises and/or through
          act and/or omission of the Lessee and/or its employees and/or users
          and/or representatives and/or suppliers and/or any person rendering
          services on its behalf.

     34.2 Without derogating from the provisions of sub-paragraph 34.1 above and
          from the Lessee's obligations to effect the insurance referred to
          hereunder, the Lessee hereby undertakes to take all such steps as are
          required for the purpose of the cancellation of any demand referred to
          the Company or to the Management Company and/or any claim lodged
          against them in relation to damage for which the Lessee is responsible
          under sub-paragraph 31.1 above and to indemnify the Company or the
          Management Company immediately on first demand therefor, against any
          damage caused to it or to the Management Company and any amount which
          it is compelled to disburse by reason of any demand and/or claim as
          aforesaid, including - but without derogating from the generality of
          the foregoing - the costs of the case and attorneys fees.

35.  The Lessee's and the Company's Insurance
     ----------------------------------------

     The Lessee's Insurance
     ----------------------

     35.1 Without derogating from the Lessee's liability, whether by law or
          under
<PAGE>

                                       37

          the provisions of this Agreement, the Lessee hereby undertakes to
          arrange and to maintain, at its cost and for the entire Lease Period,
          the insurance set forth hereunder (hereinafter collectively called
          "the Lessee's Insurance") with a duly authorised insurance company
          under law, namely:

          (a)  Property Insurance insuring the contents of the Premises and the
               additions and improvements thereto by and/or on behalf of the
               Lessee (but not those effected by the Company and at its cost) at
               their establishment value, against loss or damage capable of
               being caused as a result of fire, smoke, lightning, explosions,
               earthquake, storm and gale, flooding, damage through liquids and
               burst pipes, impact by aircraft, accident impact, riots, strikes,
               malicious damage, break-in and robbery.

               Under such aforesaid insurance the insurer shall waive its right
               of subrogation vis a vis the Company and all persons acting on
               its behalf against any damage caused by them, and its right of
               subrogation vis a vis the other lessees in the structure and in
               the Park under whose insurance a corresponding clause is included
               with respect to a waiver of subrogation vis a vis the Lessee
               arising from any damage caused by it, provided that the foregoing
               provisions regarding the waiver of the right of subrogation shall
               not apply in favour of a person who had caused damage with wilful
               intent.

          (b)  Third Party Liability Insurance insuring the Lessee's liability
               for any loss, harm or damage to any third party to whom the
               Lessee is liable by law or under the provisions of this
               Agreement, with a limit of liability of not less than $ 1,000,000
               (one million United States dollars) per occurrence and per annual
               insurance period. The foregoing insurance shall not be subject to
               any limitation as to liability resulting from fire, explosions,
               alarm, lifting, discharging and loading apparatus, defective
               sanitary installations, poisoning, harmful substances in food and
               drink, a strike, lock-out as well as subrogation claims on the
               part of the National Insurance Institute.

               The foregoing insurance shall be extended in order to include the
               Company as an additional insured with respect to its liability
               for acts and/or omissions of the Lessee, subject to a cross
               liability
<PAGE>

                                       38

               clause under which the insurance shall be deemed to have been
               separately effected on behalf of each individual insured.

          (c)  Employers Liability Insurance insuring the Lessee's liability
               towards its employees arising from any bodily injury or illness
               caused to them during the course of and as a result of their
               employment, with such standard limit of liability as is applied
               in Israel at the time of effecting the insurance and/or the
               renewal thereof. Such insurance shall not be subject to any
               limitation whatsoever as to hours of work, working at heights or
               at depths, contractors, sub-contractors and their employees,
               bait, poisons as well as the engagement of juveniles.

               The foregoing insurance shall be extended in order to indemnify
               the Company should it be regarded as the employer of the Lessee's
               employees or any of them.

          (d)  Loss of Revenue Insurance (save for Rental Fees), to the full
               value thereof in regard to the Lessee, by reason of damage caused
               to the Premises or destruction thereof as a result of the risks
               insured under paragraph (a) of this sub-paragraph, for an
               indemnity period of not less than 12 months. The foregoing
               insurance shall include a waiver of the right of subrogation vis
               a vis the Company and other lessees in the structure and the
               Park, under whose insurance a corresponding clause is included
               with respect to a waiver of the right of subrogation vis a vis
               the Lessee, provided that the foregoing provisions regarding the
               waiver of the right of subrogation shall not apply in favour of a
               person who had caused damage with wilful intent.

     35.2 Should the Lessee be of the opinion that it is necessary to effect
          insurance supplementary and/or additional to the Lessee's insurance
          set forth above, the Lessee hereby undertakes to effect and to
          maintain such supplementary and/or additional insurance, insofar as
          required.

          In any additional and/or supplementary insurance as aforesaid, a
          clause shall be included as to the waiver of the right of subrogation
          vis a vis the Company and all persons acting on its behalf (with
          respect to Property Insurance), and/or the insurance shall be extended
          to include the Company as an additional insured under the policy,
          subject to a cross liability clause (with respect to Third Party
          Liability Insurance).

     35.3 The Lessee's insurance shall include an express condition whereby it
<PAGE>

                                       39

          takes precedence over any insurance effected by the Company, and the
          insurer waives any provision regarding participation by the Company's
          insurance. In addition the Lessee's insurance shall include an express
          condition whereby it shall not be cancelled nor reduced nor lapsed
          unless 60 days advance notice thereof shall have been given to the
          Company by registered post.

     35.4 The Lessee shall furnish the Company with confirmation, on the date of
          acceptance of possession of the Premises, as to the Lessee's insurance
          having been effected, signed by the insurer.

          Should at any time the Lessee's insurer notify the Company that the
          Lessee's insurance is about to be reduced, cancelled or lapsed, as set
          out in paragraph 35.3 above, the Lessee shall be obliged to effect the
          Lessee's insurance anew and to furnish confirmation of having so
          effected insurance anew, 14 days prior to the date of such reduction
          or cancellation or lapsing as aforesaid.

          It is hereby expressly agreed that furnishing confirmation of the
          Lessee's insurance having been effected and examination thereof by the
          Company shall in no manner be construed as imposing any responsibility
          whatsoever on the Company and/or on any person on its behalf in
          relation to such insurance, the accuracy thereof and/or its conformity
          with the provisions of this Agreement, and the Lessee hereby releases
          the Company and/or all persons on its behalf from any liability as
          aforesaid.

     35.5 The Lessee hereby undertakes to comply with the conditions of the
          insurance policies, to revise the insured amount with respect to the
          insurance effected under paragraphs (a) and (d) of sub-paragraph 35.1
          above, to pay the insurance premium in its entirety and on the due
          date thereof and to ensure that such insurance is renewed from time to
          time as required, in order that the same shall remain in force for the
          whole of the Lease Period.

     35.6 Should the Lessee fail to effect and/or maintain the insurance or any
          part
<PAGE>

                                       40

          thereof referred to in this paragraph, the Company shall be entitled -
          but not obliged - to effect and/or maintain such insurance at the
          Lessee's cost, and the Lessee shall be obliged to refund to the
          Company any sum of money expended for such purpose together with
          linkage differentials and interest at the rate specified in sub-
          paragraph 46.1 or with interest at the rate specified in sub-paragraph
          46.2 hereunder, at the Company's election, where the linkage
          differentials and interest, or interest alone, is reckoned from the
          date of disbursement of such monies by the Company to the actual date
          of refund thereof.

     35.7 The Lessee declares that it shall have no claim and/or demand and/or
          action against the Company and persons acting on its behalf arising
          from damage against which it is entitled to indemnification or against
          which it would have been so entitled but for the excess specified in
          the policy under the insurance to be effected as set forth above, and
          it hereby releases those persons set forth at the head of this sub-
          paragraph from any liability for damage as aforesaid.

          The provisions of this paragraph shall not apply in the event of
          damage as set out in this sub-paragraph caused as a direct result of
          the Company's gross negligence, provided that the Company had received
          written warning to the effect that failure to remedy its gross
          negligence as aforesaid would result in the insurance company not
          giving effect to the indemnity.

     35.8 It is recorded that effecting the insurance by the Lessee as set forth
          above shall in no manner be construed as reducing or detracting in any
          form whatsoever from the Lessee's obligations under the Lease
          Agreement and Management Agreement, or as releasing it from its
          obligation to compensate the Company and/or the Management Company
          and/or any person whatsoever arising from any damage caused either
          directly or indirectly for which it is responsible. The actual payment
          of any particular insurance benefits shall not be construed other than
          as reducing the amount of the indemnity and/or compensation to which
          the Company and/or the Management Company is entitled arising from
          damage or loss.

     35.9 The provisions contained in this section shall only add to (not
          derogate from) any other provision of the Lease Agreement or
          Management Agreement relating to the release of the Company and/or the
          Management Company from liability.
<PAGE>

                                       41

     The Company's Insurance
     -----------------------

     35.10 Without derogating from the Company's liability, whether by law or
           under the provisions of this Agreement, the Company and/or the
           Management Company hereby undertakes to arrange and to maintain, at
           its cost and for the entire Lease Period, the insurance set forth
           hereunder (hereinafter collectively called "the Company's Insurance")
           with an insurance company duly authorised by law, namely:

           (a) Insurance of the structure of the Premises against loss or damage
               capable of being caused as a result of fire, smoke, lightning,
               explosions, earthquake, storm and gale, flooding, damage through
               liquids and burst pipes, impact by aircraft, accident impact,
               riots, strikes, malicious damage, break-in and robbery.

               The aforesaid insurance shall include a waiver of the right of
               subrogation (indemnification) vis a vis the Lessee and all
               persons acting on its behalf arising from any damage caused by
               them, provided that the foregoing provisions regarding the waiver
               of the right of subrogation shall not apply in favour of a person
               who had caused damage with wilful intent. For the purposes of
               this paragraph, "Structure of the Premises" includes all the
               systems constituting an integral part of the structure and
               expressly does not include the contents of the Premises as
               indicated in paragraph 35.1 (a) above, as well as any Addition
               and/or improvement and/or expansion effected to the Premises by
               or on behalf of the Lessee.

           (b) Third party liability insurance insuring the liability of the
               Company and/or the Management Company under any law and/or of the
               Lessee arising from bodily injury or damage capable of being
               caused to the person within the public areas, not constituting
               part of the areas let to the Lessee under this Agreement, with a
               limit of liability of not less than $ 2,500,000 (two and a half
               million United States dollars) per occurrence and per annual
               insurance period. The Insurance shall be subject to a special
               extension by which the Lessee shall be included as an additional
               insured with respect to its liability for an insurance occurrence
               within the public areas in the structure of the Premises outside
               the Area of the Premises, and shall be subject to a cross
               liability clause whereby the insurance shall be deemed to have
               been separately effected on behalf of each individual insured.
               For the purpose of this extension an express condition shall be
               added
<PAGE>

                                       42

               to the insurance whereby the cover under the policy with respect
               to the public areas takes precedence over any insurance effected
               by the Lessee and that the insurer waives any claim and/or demand
               regarding participation by the Lessee's insurance.

           (c) Employer's liability insurance arising from the Company's
               liability towards its employees and any person acting on its
               behalf with such standard limit of liability as is applied in
               Israel at the time of effecting the insurance and/or the renewal
               thereof. Such insurance shall not be subject to any limitation
               whatsoever as to hours of work, working at heights or at depths,
               contractors, sub-contractors and their employees, bait, poisons
               as well as the engagement of juveniles.

               The aforesaid insurance shall be extended in order to indemnity
               the Lessee should it be regarded as the employer of the Company's
               employees or any of them.

           (d) Insurance covering loss of revenue from rental and management fee
               expenses to the full value thereof, by reason of damage caused to
               the Premises in such manner as does not permit of the Lessee's
               activity therein, or by reason of destruction thereof as a result
               of the risks insured under paragraph (a) of this sub-paragraph,
               for an indemnity period of not less than 12 months. The foregoing
               insurance shall include a waiver of the right of subrogation
               (indemnification) vis a vis the Lessee and/or any person on its
               behalf, provided that the foregoing provisions regarding the
               waiver of the right of subrogation shall not apply in favour of a
               person who had caused damage with wilful intent.

     35.11 The Lessee undertakes to utilise the monies which it receives from
           the insurance company under the policies only for the purpose of the
           immediate reconstruction of the damage and/or the policies. The
           foregoing shall not in any manner be construed as limiting or
           derogating from the Company's right to exercise its rights under the
           policies.
<PAGE>

                                       43

                 Seventh Section - Maintenance of the Premises
                 ---------------------------------------------

36.  Maintenance of the Premises and Repairs
     ---------------------------------------

     36.1 The Lessee shall be liable for the proper maintenance of the Premises
          and shall repair at its expense any defect and/or fault and/or damage
          caused to the Premises, whether by the Lessee or by others, whether by
          reason of wear and tear or for any other reason, save for repairs
          expressly applicable to the Company.

     36.2 The Lessee shall not be obliged to repair damage to the Premises
          resulting from defects in the construction of the Premises, arising
          from reasonable wear and tear, from acts of war, an earthquake or from
          any other unforeseen act of nature, or repairs due by a contractor in
          pursuance of the Sale (Apartments) - Maintenance Period Law (even
          though the aforesaid Law does not apply to this Agreement and/or to
          the relationship of the parties thereunder).

          The Company shall repair any damage caused to the Premises as set
          forth in this paragraph within a reasonable time and subject to the
          provisions of sub-paragraph 36.5 hereunder and upon receipt of the
          insurance benefits as set forth in paragraph 35 of this Agreement.
          Should urgent repairs be required, the Lessee shall be entitled but
          not obliged to repair the same at its cost and the Company shall
          compensate it therefor on first demand by the Lessee and subject to
          the cost of repair being reasonable. Notwithstanding the foregoing,
          the Company shall repair damage to the Premises for which a contractor
          is responsible under the Sale (Apartments) - Maintenance Period Law,
          unrelated to the receipt of insurance benefits.

     36.3 Notwithstanding the foregoing, should any damage whatsoever be
          occasioned to the Premises and/or the Building such that, in the
          opinion of the Company and/or the Lessee the it is not possible for
          the Lessee to continue to use the Premises, the Company shall be
          entitled, in its sole and absolute discretion, to determine whether or
          not to rebuild the Premises and reinstate the same to such a condition
          as would enable their continued use. Should the Company decide not to
          rebuild the Premises, the parties to this Agreement shall be released
          from their obligations thereunder without any compensation.

     36.4 If the aforesaid damage is classed as a "total loss" in relation to
          the Premises only, the Company shall rebuild the Premises should
          liability for the damage be imposed on the Company. Should the damage
          be to
<PAGE>

                                       44

          the Area of the Premises alone, the provisions of paragraph 36.3 above
          shall apply.

     36.5 The Lessee shall give notice to the Company as to any damage caused to
          the Premises as set forth in sub-paragraph 36.2 above, within three
          business days from the time of discovery thereof. Should the Lessee
          fail to give notice as aforesaid, the Lessee shall bear any further
          expense occasioned to the Company as a result of the failure to give
          notice as aforesaid and on time.

     36.6 The Company and/or the Management Company shall be entitled to prepare
          management rules for the Park. The Lessee undertakes to observe such
          management rules which shall constitute Annex D to this Agreement,
                                                  -------
          subject to the provisions of such rules not obliging the Lessee to pay
          any monies beyond those prescribed in this Agreement and in the
          Management Agreement, and subject to the provisions of the rules not
          prejudicing the Lessee's capability to make on-going use of the
          Premises.

37.  Prohibitions
     ------------

     For the avoidance of doubt it is hereby expressly clarified :

     37.1 Subject to the provisions of paragraph 36.2 above, the Lessee shall
          not be entitled to attend to the air conditioning installations on the
          Premises, the maintenance and/or repair thereof and/or to carry out
          any act whatsoever thereon and/or to enable other persons (even though
          they may be professionals and air conditioning specialists) to
          undertake any of the foregoing in regard to the air conditioners on
          the Premises.

     37.2 Should the Lessee breach the provisions of sub-paragraph 37.1 above
          and as a result thereof any damage be occasioned to the air
          conditioning installations, the Lessee shall bear the full cost of the
          repair of such damage together with linkage differentials as specified
          and interest at the rate specified in sub-paragraph 46.1, or together
          with interest at the rate specified in sub-paragraph 46.2, at the
          Company's election, and it shall be liable for the payment of an air
          conditioning charge even though the supply of air conditioning to the
          Premises may be discontinued for any period whatsoever.

          A lessee leasing the Premises which, or a part of which, are not air
          conditioned, shall not itself be entitled to be connected in any form
          whatsoever to the air conditioning system. Any such aforesaid
<PAGE>

                                       45

          connection may be undertaken only by the Company.

          Any connection by a lessee to the air conditioning other than through
          the Company, either for the purpose of receiving air conditioning
          services or for any other purpose, shall be regarded as a fundamental
          breach of the provisions of this Agreement and shall entitle the
          Company to any relief accorded to it as a result of the aforesaid
          breach pursuant to this Agreement and under any law.

                     Eighth Section - the Company's Rights
                     -------------------------------------

38.  Entry onto the Premises
     -----------------------

     Employees of the Company and its agents shall be entitled to enter upon the
     Premises at any time during ordinary working hours and in co-ordination
     with the Lessee, for the purpose of inspection or effecting repairs and
     such other works as are, in the Company's opinion, necessary.

     In the event of an emergency, the Company and/or any person on its behalf
     shall be entitled to enter onto the Premises without having obtained the
     prior consent of the Lessee.

39.  Execution of Works on the Premises
     ----------------------------------

     39.1 It is stipulated and agreed between the parties that the Company
          and/or its representatives and/or any person acting in its name and/or
          on its behalf shall be entitled to lead through the Premises (or
          thereon) pipes, conduits and other conductors for water, sewage, gas,
          electricity, telephone and/or for any other purpose and to execute
          works and/or other installations on the Premises for the purposes of
          use by the property adjacent to the Premises, or for any other similar
          purpose provided that :

          (a)  The Company exercises the powers conferred upon it in this
               paragraph in such form and manner as not to be injurious to the
               reasonable use of the Premises and any inconvenience and/or
               disturbance occasioned to the Lessee is reduced as much as
               possible.

          (b)  The Company carries out in those parts of the Premises - as well
               as in installations carried out by the Lessee with the Company's
               authority - which are adversely affected by the carrying out the
<PAGE>

                                       46

               aforesaid works, any repairs which may be required to reinstate
               the Premises to their former condition.

          (c)  The Company shall co-ordinate  with the Lessee to the extent
               possible the dates on which the aforesaid works are to be carried
               out.

40.  Execution of Works in the Building and in the Park
     --------------------------------------------------

     40.1 The Lessee declares that it is aware that the establishment of the
          Park has not yet been completed and that works relating to the
          construction of additional structures in the area of the Park are
          being, and shall in the future be, undertaken, and it hereby expressly
          waives any claim of inconvenience likely to be caused to it as a
          result of noise, waste and such like associated with the execution of
          the aforesaid works, subject to the Company doing whatever it can in
          order that the execution of the foregoing works does not unreasonably
          prejudice the Lessee's potential to use the Premises.

     40.2 The Company shall be entitled, in its sole discretion, to effect any
          addition to the construction areas of the Land, to the extent that the
          urban building scheme which is, and/or which shall become, applicable
          to the Land shall enable this, without the need for prior notice
          thereof to be given to the Lessee or to obtain the Lessee's consent
          thereto and without the Lessee preventing and/or interfering with
          and/or opposing such addition to the aforesaid construction areas by
          the Company.

     40.3 The Lessee declares and undertakes that it shall not in any manner
          whatsoever, either directly or indirectly, prevent nor lodge any
          objection to any plan submitted by the Company for any addition to the
          construction areas on the Land and/or in the Building, whether an
          urban building scheme or a plan for building permits or any other
          plan, provided that no construction in the Building (as distinct from
          any construction in the Park and/or in any part thereof), under any
          such aforesaid plan, shall be carried out during the Lease Period.

     40.4 The Lessee undertakes to remove at its cost any obstacle and/or object
          and/or installation and/or the construction of any additional areas
          accessory belonging and situate in any place intended for  by the
          Company. The Company shall, insofar as is possible, see to it that an
          alternative place is found for the Lessee for the placement of the
          installations and/or accessories which had been removed as aforesaid.
<PAGE>

                                       47

     40.5 It is stipulated and agreed that there is no obligation on the Company
          under this Agreement to exercise, either in whole or in part, the
          existing and/or future building rights over the Land of the Park. The
          exercise of the aforesaid rights and the construction and
          establishment of further property in the Park, to whatever extent,
          shall be in the sole and absolute discretion of the Company, and the
          Lessee hereby undertakes to refrain from any act and/or omission would
          amount to interference and/or disturbance and/or delaying in any
          manner whatsoever the exercise of the Company's rights in regard
          thereto and/or the carrying out of any acts whatsoever by the Company
          in accordance with the aforesaid discretion.

41.  Traffic and Parking Arrangements
     --------------------------------

     41.1 The Lessee hereby acknowledges that it is aware, and it is agreed by
          it, that the Company shall be entitled to prescribe such traffic and
          parking arrangements in the Park as it shall see fit, to levy, with
          effect from such date as shall be determined by it, a payment for
          parking in the Park, both in the covered parking areas (wherein it is
          possible that a one-off payment may also be prescribed for the
          purchase of a "smart card" which would enable ingress to the parking
          area and egress therefrom), in the parking lots and in the parking
          areas linked to the structures, all in such amounts and on such
          conditions as shall be laid down by it from time to time, in its
          discretion, without prejudice to the rights of the Lessee in relation
          to the parking areas allocated for its use under the provisions of
          this Agreement.

     41.2 The Lessee hereby undertakes to comply with all such rules as shall be
          prescribed by the Company on the subjects of traffic and parking
          within the Park and to pay the amounts which the Company so determines
          for persons parking within the confines thereof, should it wish to
          park within the Park, as distinct from the allocated parking areas
          available to it.

     41.3 The Lessee acknowledges that it is agreed upon by it that parking
          contrary to the signage and/or the instructions of any person
          appointed by the Company to supervise the traffic and parking
          arrangements within the Park shall confer on the Company the right to
          have the vehicle towed away at the expense of the owner of the vehicle
          and/or the right to impose fines on the owner of the vehicle and/or
          the right to take such other steps as shall be published.
<PAGE>

                                       48

                           Ninth Section - Collateral
                           --------------------------

42.  Obligation to Furnish
     ---------------------

     As security for the performance by the Lessee of all the provisions of this
     Agreement in their entirety and on the due dates thereof, and without
     derogating from the generality of the foregoing, as security for the
     payment of the Rental Fees and the other amounts for which the Lessee is
     liable under this Agreement, the Lessee hereby undertakes to furnish the
     collateral set forth hereunder in this section.

43.  Bank Guarantee
     --------------

     43.1 The Lessee hereby undertakes to deposit an autonomous unconditional
          and linked bank guarantee with the Company in an amount equal to the
          rental for the Premises, for the parking and for maintenance charges
          (as set out in paragraph 4 of the Management Agreement Annex B) for 3
          months of the lease together with value added tax as applicable,
          operative for a period of 14 months and renewable from time to time
          with effect from the date of delivery thereof and until 60 days shall
          have elapsed from the date of termination of the lease under this
          Agreement  (hereinafter: "the Guarantee").

          The Guarantee shall be in the form attached to this Agreement as Annex
                                                                           -----
          E.
          -

     43.2 The Lessee shall deposit the letter of Guarantee with the Company by
          not later than 8th June 1999. Until the date of furnishing the
          Guarantee as set out in this sub-paragraph, the Company shall be
          entitled, at its sole discretion, not to carry out any act and/or
          obligation of any nature under this Agreement involving the
          disbursement of monies. The non-performance of acts and/or obligations
          as aforesaid, shall not be regarded in any circumstances as a breach
          of the Company's obligations. Upon furnishing the Guarantee by due
          date as aforesaid, the Company's obligation to carry out acts and
          obligations as aforesaid shall have been perfected. Until the
          furnishing of the aforesaid letter of Guarantee to the Company, a
          promissory note signed by the Lessee, shall serve as collateral, which
          the Lessee shall deposit with the Company on the date of signature of
          this Agreement in the sum of
<PAGE>

                                       49

          NIS 395,000. The provisions pertaining to the aforesaid promissory
          note and the form thereof are set forth in Annex F to this Agreement
          and in Schedule 1 to the aforesaid Annex F. The promissory note shall
                 ----------                  -------
          be returned to the Lessee against receipt by the Company of the
          aforesaid Guarantee. It is recorded that the furnishing of the
          promissory note shall not in any manner be construed as derogating
          from the Lessee's liability to put up the aforesaid Guarantee on the
          date set out in this sub-paragraph by fulfilment of all the provisions
          of the Agreement pertaining thereto.

     43.3 Should the Lessee fail to pay rental and/or any other amount for which
          it is liable under the provisions of this Agreement and/or those of
          the Management Agreement on the due date, and/or fail to fulfil any of
          its obligations towards the Company under the provisions of this
          Agreement or the Management Agreement, the Company shall be entitled -
          but not obliged and after 14 days prior written notice thereof shall
          have been given to the Lessee - to realise and recover from the amount
          of the Guarantee, the amount unpaid on the due date thereof and/or any
          other amount owed by the Lessee at such time to the Company (together
          with linkage and interest due to it with respect thereto) as well as
          to take proceedings against the Lessee arising from the breach of this
          Agreement and/or the Management Agreement, or not to take proceedings
          as aforesaid, without derogating from the rights available to the
          Company under any law against the Lessee.

     43.4 The Lessee hereby declares and agrees that without derogating from the
          aforesaid Guarantee, the full validity of the Guarantee shall not be
          attacked, including the Company's right to realise the same, in its
          entirety or in part, by reason of any claim or right available to the
          Lessee under the provisions of this Agreement, since the collateral is
          final, decisive and absolutely autonomous, not capable of alteration,
          of being made conditional, of being set off, mortgaged, attached or
          seized, for any reason whatsoever.

          In addition the realisation of the Guarantee by the Company as
          aforesaid shall not confer on the Lessee any right whatsoever in and
          to the Premises and shall not amount to a waiver or to its being
          conditional upon any of the rights of the Company or of the
          obligations of the Lessee under the provisions of this Agreement, nor
          shall it replace any of the same.

     43.5 Should the Company have realised the Guarantee and made use of all or
          any part of the amount of the Guarantee, in the circumstances
          described
<PAGE>

                                       50

          above, the Lessee shall be obliged to raise the Guarantee to the
          original amount thereof immediately upon receipt of the Company's
          first demand therefor, by way of the furnishing of a fresh Guarantee,
          for the period and at the amount of the original Guarantee. Should a
          new Guarantee be furnished as aforesaid, the Company shall refund to
          the Company the amount of the original Guarantee after the deduction
          of the amount which had been so utilised as aforesaid and after set
          off of the costs occasioned to the Company in connection with the
          realisation of the Guarantee.

     43.6 The Lessee shall, 45 days prior to the expiration of the validity of
          the Guarantee, furnish the Company with an original extension of the
          Guarantee, together with all the conditions thereof, duly signed by
          the bank issuing the same. Should the Lessee fail to extend the
          Guarantee as required, the Company shall be entitled to realise the
          original Guarantee and to hold the proceeds in lieu thereof.

     43.7 Prior to the commencement of the last year of the lease the Lessee
          shall deliver a Guarantee to the Company the validity of which shall
          lapse 60 days after the date of expiration of the lease, to secure the
          actual fulfilment of all the Lessee's obligations under this
          Agreement, including those covering any indebtedness of the Lessee as
          well as those relating to the termination of the lease, which includes
          those in connection with the vacating of the Premises by the Lessee at
          the expiration of the Lease Period.

          It is stipulated and agreed that the expiration of the Lease Period
          and/or the restoration of possession of the Premises to the Company
          shall in no manner be construed as a derogation of the Company's right
          to realise the Guarantee in the manner set out above in relation the
          aforesaid period of 60 days.

          Should, after realisation of the Guarantee as aforesaid, any amount
          remain out of the amount of the Guarantee held by the Company, the
          Company shall refund to the Lessee the balance of the amount of the
          Guarantee, setting off the costs occasioned to the Company in
          connection with the realisation of the Guarantee, together with
          linkage differentials as set forth in paragraph 46.1 hereunder, from
          the date of expiration of the lease to date of actual payment.

          It is stipulated and agreed that the realisation of the Guarantee as
          set forth in this sub-paragraph shall in no manner be construed as
          derogating from any claim or right of the Company against the Lessee
<PAGE>

                                       51

          pursuant to this Agreement or under any law.

     43.8 All costs and/or payments and/or commissions arising from the issue of
          the Guarantee under this paragraph shall be due by the Lessee and
          shall be paid by it.

     43.9 A breach of the provisions of this paragraph shall be regarded as a
          fundamental breach of the provisions of this Agreement.

                    Tenth Section - Breaches and  Remedies
                    --------------------------------------

44.  Breaches
     --------

     Any party breaching and/or failing to fulfil any of its obligations under
     this Agreement shall be obliged to compensate the party fulfilling for any
     damage and/or loss occasioned to it as a result thereof, without derogating
     from the right of the party fulfilling to obtain any further and/or other
     relief and/or remedy, including orders for the enforcement of the Agreement
     and/or injunctions against the its breach.

45.  Fundamental Breaches
     --------------------

     45.1 The parties hereby expressly agree that in addition to the provisions
          which lay down in this Agreement itself that a breach thereof shall be
          regarded as a fundamental breach, any of the breaches set forth
          hereunder shall be a fundamental breach:

          (a)  deleted

          (b)  A breach of any of the provisions of paragraphs: 6, 7, 10, 11,
               19, 23, 30, 32, 42, 53 and/or a breach of any of the provisions
               of the Third, Fourth, Sixth or Seventh Sections of the Agreement.

          (c)  Failure to effect the insurance which the Lessee undertook to
               arrange under the provisions of the Sixth Section of this
               Agreement, or failure to maintain such insurance in effect.

          (d)  Failure to deposit any of the amounts of the deposit on the date
               prescribed therefor or failure to supplement the amount of the
               deposit after the Company shall have been compelled to make use
               thereof.
<PAGE>

                                       52

          (e)  The use of the Premises other than for the lease purpose as set
               forth in this Agreement.

     45.2 Should either of the parties to this Agreement commit a fundamental
          breach and fail to remedy such breach within 14 days from the date on
          which it was required in writing to do so, the other party shall be
          entitled, on the expiration of the foregoing date, to give written
          notice to the party in breach as to the cancellation of this Agreement
          and the lease thereunder. Should it have been the Lessee who had
          breached the Agreement as aforesaid, the Lessee shall be obliged to
          vacate the Premises and to restore the same to the Company's
          possession within 14 days from the date of such notice.

          Nothing contained in this sub-paragraph shall be construed as
          derogating from the Company's right to sue for and to obtain, together
          with the cancellation of the Agreement or in place thereof, any other
          lawful relief, including compensation and/or a mandamus and/or an
          injunction.

46.  Late Payments
     -------------

     Without derogating from the provisions of paragraphs 44 and 45 above, it is
     stipulated and agreed between the parties as follows:

     46.1 Should the Lessee be in arrears in the payment of any amount which it
          is obliged to pay to the Company under the provisions of this
          Agreement, without derogating from the Company's right to sue and
          obtain any relief to which it is entitled under this Agreement and/or
          according to any law, it shall be entitled to receive interest from
          the Lessee at the rate specified in sub-paragraph 46.2 hereunder,
          reckoned from the due date of the payment to the date of actual
          payment, or linked to the Index, together with the maximum interest
          which Bank Hapoalim Ltd. would recover at the time of such payment
          with respect to loans linked to the Index, at the Company's election.

     46.2 The interest which the Lessee is obliged to pay to the Company under
          the provisions of sub-paragraph 46.1 shall be that which is applied
          from time to time at Bank Hapoalim Ltd. with respect to irregular
          unauthorised overdrafts in current loan accounts together with 4% per
          annum.

     46.3 Should the Lessee be in arrears in the payment of any amount
          whatsoever which it is obliged to make to the Company, any amount paid
          by it after the commencement of the arrears as aforesaid shall be
<PAGE>

                                       53

          credited firstly on account of interest or linkage and interest,
          thereafter on account of the capital of the debt and thereafter on
          account of current payments, irrespective of whether the Lessee had
          remitted the amount on account of the debt or whether it had purported
          to effect current payments.

     46.4 It is hereby agreed between the parties that should the Lessee be in
          arrears in the payment of rental and/or in the payment of amounts
          pursuant to  the Management Agreement and/or in the payment of
          electricity consumption charges, the Company shall be entitled, in
          addition to its right to any other relief, conferred upon it under
          this Agreement and/or by law - including the right to cancel this
          Agreement and to obtain or to seize possession of the Premises, and
          after the Company shall have given the Lessee 3 business days prior
          written warning - to take all or any of the follow steps, even without
          cancellation of the Agreement, and to persist therewith until the
          Lessee shall have paid its indebtedness (including linkage
          differentials and/or interest), namely:

          (a)  To cut off the supply of electricity and/or water and/or air
               conditioning to the Premises.

          (b)  To discontinue the provision of any maintenance service to the
               Premises.

47.  Appointment of Receiver or Liquidator
     -------------------------------------

     It is hereby stipulated and agreed between the parties that in the event of
     the appointment of a receiver to the Lessee, whether provisional or
     permanent, and/or a pre-liquidator and/or liquidator and/or should a
     winding up order have been granted against it, and should such aforesaid
     appointment or order not have been cancelled within 90 days, the very fact
     of such appointment and/or the grant of such order and the non cancellation
     thereof within the period of time set out above shall amount to a
     fundamental breach of this Agreement, and it is hereby expressly agreed
     that in such circumstances the validity of this Agreement shall lapse and
     neither the Lessee, the receiver, the pre-liquidator and/or liquidator
     shall have any further rights in and to the Premises (save for the right to
     take therefrom the Lessee's property found therein) and such receiver, pre-
     liquidator and/or liquidator shall be obliged to vacate the Premises and to
     restore possession thereof to the Company within the 90 days referred to
     above.

48.  Taking Possession
     -----------------
<PAGE>

                                       54

     Should the Company cancel this Agreement as a result of a fundamental
     breach by the Lessee, or should the validity of this Agreement have lapsed
     in the circumstances set out in paragraph 47 above and should the Lessee,
     the receiver, pre-liquidator and/or liquidator have failed to vacate the
     Premises and restored possession thereof to the Company within 14 days from
     the date of cancellation or on the date of lapse of validity, as the case
     may be, the Company shall be entitled to take possession of the Premises,
     to replace its locks, to remove from the Premises the equipment, goods and
     effects belonging to the Lessee and to store the same, at the expense of
     the Lessee, the receiver, pre-liquidator or liquidator, wherever it shall
     deem fit. Should the Company exercise the right accorded to it under this
     paragraph, the Lessee, the receiver, pre-liquidator or liquidator, as the
     case may be, shall be obliged to refund to it such monies as it shall have
     expended for the purposes of the removal of such equipment, goods and
     effects, the transportation and storage thereof together with linkage
     differentials and/or interest at the rate specified in sub-paragraph 46.1
     or 46.2, at the Company's election.

     The Lessee, the receiver, pre-liquidator or liquidator, as the case may be,
     hereby release the Company from liability for any loss and/or damage which
     might be caused to such equipment, goods and/or effects during the course
     of the transfer and storage thereof, provided that such transfer is carried
     out by persons qualified as such, in the presence of a representative of
     the Company, and that storage is effected at a suitable location.

49.  Cancellation of the Agreement
     -----------------------------

     49.1 Without derogating from the foregoing, the parties agree that the
          Company shall be entitled to bring this Agreement to an end on any one
          of the occurrences set forth hereunder taking place:

          (a)  Should a receiving order be made against the Lessee or should the
               Lessee arrive at an agreement with its creditors.

          (b)  Should judgement for the winding up of the Lessee be granted.

          (c)  Should a receiver be appointed over the Lessee's assets or any
               part of its assets.

          The Company shall give written notice to the Lessee as to the
          cancellation of the Agreement and the such cancellation shall take
          effect from the date of lodgement of the application against the
          Lessee for the
<PAGE>

                                       55

          grant of the receiving order or application for an arrangement with
          creditors or application for winding up or application for the
          enforcement of charges and/or for the appointment of a receiver,
          provided that such aforesaid application is not cancelled within 90
          days from the date of lodgement thereof.

     49.2 In addition to any relief for which the Company is entitled to sue
          pursuant to this Agreement and/or under any law and without derogating
          from the generality of the foregoing, the Company shall be entitled to
          bring about the cancellation of this Agreement, after giving 14 days
          written notice in the instances set forth hereunder:

          (a)  Failure to deliver the Bank Guarantee as set out in paragraph 44
               above.

          (b)  Use of the Premises other than as set forth in paragraph 6 above.

          (c)  Transfer of the lease rights in and to the Premises to another
               person, contrary to the provisions of paragraph 51 hereunder.

          (d)  Failure to pay an amount which the Lessee is obliged to pay to
               the Company - within 14 days from the date prescribed for the
               payment thereof.

          (h)  The creation of a continuing nuisance in such manner as to be a
               disturbance to offices and/or factories and/or other businesses
               in the Building and/or within the Park.

     49.3 Should the Agreement be cancelled, the Lessee shall vacate the
          Premises within 30 days from the date of such cancellation.

     49.4 Nothing contained in this paragraph shall be construed as derogating
          from the Company's rights under this Agreement or by law.

     49.5 Should the Lessee be obliged to vacate the Premises arising from the
          provisions of sub-paragraphs 53.1 or 53.2 hereunder, the Lessee shall
          not be entitled to any compensation and/or payment whatsoever from the
          Company.

50.  Payment of the Company's Debts
     ------------------------------

     50.1 Should the Company be obliged to pay any amount relating to the
          Premises instead of the Lessee, the payment of which is due by the
<PAGE>

                                       56

          Lessee pursuant to this Agreement or under any law, including payments
          for electricity, water, municipal rates, Bezeq and so forth, the
          Company shall give notice to the Lessee as to its intention to pay the
          aforesaid amount instead of the Lessee 14 days prior to the payment
          thereof. Should the Lessee itself fail to pay the aforesaid amounts,
          even after receipt of notice from the Company, the Company shall be
          entitled - but not obliged - itself to pay such sum as set out above.

     50.2 The Lessee shall refund to the Company any amount paid by the Company
          as aforesaid within 14 days from the date of receipt of a demand to do
          so, together with interest and linkage differentials as set forth in
          paragraph 46.1 or with interest alone as set forth in paragraph 46.2,
          in the Company's absolute discretion, from the date of dispatch of
          such notice to date of actual payment.

                       Eleventh Section - Miscellaneous
                       --------------------------------

51.  Transfer of Rights
     ------------------

     51.1 The Lessee shall not be entitled to transfer and/or to mortgage in any
          form or manner all or any part of the rights conferred upon it under
          this Agreement to any other person or persons. Any act of a
          corporation constituting the Lessee, whether a single act or a number
          of acts cumulatively, including any act as a result of which control
          is passed, directly or indirectly, from the owners of the corporation
          at the time of signature of this Agreement to any third party
          whatsoever, shall not under any circumstances and in any manner
          derogate from the obligations of the Company under this Agreement, nor
          alter in any form whatsoever the purpose of the lease and/or shall not
          constitute grounds for the alteration of any of the provisions of the
          Agreement or the manner of fulfilment of the Lessee's obligations
          hereunder.

          Notwithstanding the provisions of paragraph 51.1 above, the transfer
          of rights and the use of the Premises shall be permitted to an
          associated and/or affiliated company and/or subsidiary of the Lessee
          (hereinafter: "the Transferee Company"), provided that the Transferee
          Company enters into this Agreement as a further party or signs a
          separate agreement with the Company, along with the Lessee and under a
          reciprocal guarantee between them, and provided that the Transferee
          Company furnishes the Company with guarantees as set forth in the
          Ninth Section of this Agreement, for the fulfilment of the Agreement
          to the Company's satisfaction.
<PAGE>

                                       57

     51.2 Notwithstanding the provisions of paragraph 51.1 above, it is hereby
          agreed that the Lessee shall be entitled to permit the use of parts of
          the Premises (as distinct from the whole of the Premises) to other
          persons as sub-lessees provided that the identity of the foregoing
          sub-lessees is approved in advance and in writing by the Company, and
          subject in any event notwithstanding the permission to use as
          aforesaid, the Lessee remaining absolutely liable to the Company for
          the fulfilment of all its obligations under this Agreement in their
          entirety and on the due dates thereof, in relation to the areas in
          which the sub-lessee is permitted to operate as aforesaid. The Lessee
          and the sub-lessee shall be guarantors under a reciprocal guarantee
          inter se in relation to their obligations with respect to the
          Premises.

          It is stipulated that the Lessee shall not be entitled to let parts of
          the Premises to other persons as sub-lessees for any period in excess
          of the Lease Period under this Agreement and/or for the Additional
          Lease Period (if applicable) and/or for the Second Lease Period (if
          applicable), and nothing contained in any sub-lease made contrary to
          the foregoing shall be construed as binding the Company.

          Should the Lessee let parts of the Premises as set out in paragraph
          51.2 above, the Company shall be entitled, but not obliged, to enter
          into contractual arrangements direct with such sub-lessee by
          subtraction from the relevant Areas of the Premises of the Lessee.

     51.3 The Company shall be entitled to transfer and/or mortgage its rights
          and obligations under this Agreement  to any other person provided
          that this does not derogate from the Lessee's rights under this
          Agreement.

     51.4 It is stipulated that in any event, even though transfer is effected
          in accordance with and subject to the provisions of this paragraph,
          all the provisions of this Agreement shall continue to apply and be
          binding on the Lessee and such transfer shall in no manner be
          construed as detracting from any of its obligations towards the
          Company.

52.  Right of First Refusal
     ----------------------

     52.1 As set out above, the Company hereby grant to the Lessee a right of
          first refusal to lease from the Company the Further Area, in addition
          to the remainder of the leased areas to the Lessee under this
          Agreement. The right of first refusal shall be operative with effect
          from the date of signature of this Agreement until 3 (three) months
          shall have elapsed
<PAGE>

                                       58

          from the Date of Delivery of possession as set forth in paragraph 11.1
          above (hereinafter: "the Right of Refusal Period").

     52.2 It is hereby recorded that the right of first refusal shall apply only
          in relation to contractual arrangements wherein the Company grants
          lease rights in the Additional Area to any third party whatsoever.
          With respect to any contractual arrangements between the Company and
          any third party whatsoever for the sale of the whole or any part of
          the Further Area, no right of refusal whatsoever shall accrue to the
          Lessee.

     52.3 In regard to the aforesaid right of first refusal, the following
          provisions shall apply:

          (a)  Should the Company, in its sole discretion, make the Additional
               Area available for letting, and should it reach an agreement with
               any third party whatsoever, subject to the right of first refusal
               hereby granted to the Lessee, with respect to the letting of the
               Additional Area to such third party, the Company shall offer to
               let the Additional Area to the Lessee prior to its offer to
               conclude any transaction whatsoever with that third party, on
               conditions identical with those agreed as aforesaid with that
               third party. Should the Lessee be desirous of leasing the
               Additional Area from the Company on the foregoing conditions, the
               Lessee shall give notice thereof to the Company within 15 days
               from the date of delivery to it of the offer to let the
               Additional Area as aforesaid. In the event of the Lessee giving
               notice to the Company that it does not wish to lease the
               Additional Area on the foregoing conditions, or should no notice
               whatsoever be given to the Company, and upon the expiration of
               the 15 days as aforesaid, the Lessee shall be regarded as having
               waived its right to lease the Additional Area on the foregoing
               conditions, and in such event the Company shall be entitled to
               let the Additional Area to any third party whatsoever on
               conditions no more favourable than those under which the
               Additional Area had been offered to the Lessee.

          (b)  Should, after waiver on the part of the Lessee of its right to
               lease the Additional Area on the conditions set out in paragraph
               (a) above, the Company reach an agreement with any third party
               whatsoever, subject to the right of refusal hereby granted to the
               Lessee, as to the letting of the Additional Area to that third
               party on conditions more favourable than those offered to the
               Lessee as set forth in paragraph (a) above, the Lessee's right of
               first refusal
<PAGE>

                                       59

               shall be renewed and the Company shall be obliged to offer the
               Additional Area to the Lessee for the second time prior to its
               letting the same to that third party, on conditions identical to
               those agreed upon as set out in this paragraph (b) with that
               third party, and all the provisions set forth in paragraph (a)
               above shall apply in connection therewith.

               The Company shall enable the Lessee, at its request, to peruse
               the relevant parts of the lease agreement entered into with that
               third party in order to verify the fulfilment of the provisions
               of this paragraph.

          (c)  It is hereby recorded that upon expiration of the Right of
               Refusal Period or waiver by the Lessee of its right as set out in
               sub-paragraph (a) above, irrespective of whether the Lessee had
               given notice that it did not wish to lease the Additional Area,
               or whether it had not given any notice whatsoever to the Company,
               and upon the expiration of the period of 15 days as set out
               above, the Lessee shall have no rights in and to the Additional
               Area, nor shall it have any claim against the Company and/or
               against any third party whatsoever with whom the Company enters
               into contractual  arrangements, if so entered into.

53.  Vacating
     --------

     53.1 The Lessee shall vacate the Premises on the expiration of the Lease or
          the First Additional Lease Period or on the expiration of the Second
          Additional Lease Period, as the case may be, and shall restore  sole
          possession of the Premises to the Company free of any person or
          property not being the property of the Company.

          In the event of the Lessee being obliged to vacate the Premises in
          accordance with the conditions of this Agreement, either for the
          reason set forth in this paragraph or for any other reason set forth
          in this Agreement and/or under any law, it shall be obliged to restore
          sole possession of the Premises, together with the keys, totally
          vacant and in good condition and fit for immediate use, save for
          reasonable wear and tear.

          Furthermore the Lessee shall, on expiration of the Lease Period or the
          actual vacating of the Premises, furnish the Company with
          confirmations from the Electricity Corporation and the local authority
<PAGE>

                                       60

          that the Lessee has no indebtedness arising from electricity
          consumption and/or water consumption and/or taxes and/or dues to the
          local authority with respect to the Premises up to the expiration of
          the Lease Period or up to the date of actual vacating, whichever of
          the two shall be the later.

     53.2 Without derogating from any of the Company's other rights, should the
          Lessee fail to vacate the Premises  as set forth in sub-paragraph 53.1
          above, the Lessee shall pay the Company pre-determined and pre-
          estimated compensation (hereinafter: "the Compensation") for each day
          in default, in an amount equal to double the Rental Fees applicable to
          the Premises for one day's Rental Fee during the last month of the
          last year of the lease. The Compensation shall be linked to the Index,
          and the computation of the linkage differentials shall be effected,
          mutatis mutandis, by the Company monthly.

     53.3 The foregoing shall not in any manner be construed as prejudicing
          and/or derogating from any right of the Company, including its right
          to receive the Compensation referred to in sub-paragraph 53.2, even if
          the Company had issued a demand and/or invoice to the Lessee for
          payment of rental.

          In addition, nothing contained in this sub-paragraph shall be
          construed as prejudicing and/or derogating from the Company's right to
          demand the vacating of the Premises.

          The provisions of this paragraph take precedence over any other
          provision contained in this Agreement.

          For the avoidance of doubt, it is clarified that the Lessee's
          liability as set forth in this paragraph shall also apply after the
          expiration of the Lease Period up to the actual vacating of the
          Premises.

     53.4 Upon the expiration of the validity of this Agreement, and/or should
          this Agreement be cancelled by the Company and/or should a judgement
          be granted for the eviction of the Lessee  from the Premises, and
          should the Lessee fail to vacate the Premises forthwith, the Company
          shall be entitled to realise and/or to utilise any collateral and/or
          guarantee furnished to it by the Lessee.

          Nothing contained in this paragraph shall be construed as a waiver of
          any of the Company's rights vis-a-vis the Lessee under this Agreement
<PAGE>

                                       61

          or by law, or be construed as giving the Lessee permission to make use
          of the Premises after cancellation of the Lease Agreement or the grant
          of judgement for eviction as aforesaid.

          The cancellation of this Agreement under the provisions of paragraph
          49 above shall in no manner be construed as prejudicing the Lessee's
          obligations pursuant to the provisions of this paragraph above.

     53.5 Without prejudice to any of the Company's rights under this Agreement,
          it is agreed that upon the expiration of the Lease Period and/or after
          cancellation of this Agreement by the Company and/or in the event of
          the Lessee failing to make two consecutive rental payments to the
          Company, should the Lessee fail to vacate the Premises and/or fail to
          restore possession of the Premises to the Company free of any person
          or property, the Company shall be entitled to take possession of the
          Premises, after giving written notice to the Lessee as to the date of
          taking possession.

          The Company shall be entitled to act as set out above and to clear all
          movable property found on the Premises and to store the same as it
          sees fit in its absolute discretion at any other location and/or to
          sell the same to a third party, in its absolute discretion. The cost
          of such clearing, storage and sale shall be due and payable by the
          Lessee. The Company shall be entitled to deduct from the sale price
          (if any) the costs incurred arising from such clearing, storage and
          sale.

          Should the Premises be cleared by the Lessee or should the equipment
          be stored or sold as set forth above in this sub-paragraph, the Lessee
          shall have no plea in defence and/or any other claim against the
          Company in connection with the implementation of such clearing,
          storage or sale as aforesaid, provided that such clearing and/or
          storage is carried out by persons qualified as such, in the presence
          of a representative of the Company, and that storage is effected at a
          suitable location.

     53.6 The Company shall be entitled to take possession of the Premises
          and/or to prevent the Lessee from using the Premises (including the
          replacement of locks on the Premises) in the event the Lessee fails to
          make two consecutive payments of the Rental to the Company provided
          that it had given written notice thereof to the Lessee.

          The books of the Company shall serve as prima facie proof for the
          purpose of the Lessee's indebtedness to the Company for the Rental
<PAGE>

                                       62

          Fees.

     53.7 Further to the provisions of sub-paragraph 53.4 above, the collateral
          shall serve to secure the discharge of all the Lessee's indebtedness
          to the local planning and building committee, to the local authority
          (including any indebtedness arising from water consumption) and/or to
          the Electricity Corporation and the communications service provider
          with respect to the Premises.

54.  Costs of the Agreement
     ----------------------

     The costs of stamping this Agreement shall be due by the parties in equal
     shares.

55.  Taxes, Duties and Levies
     ------------------------

     All such taxes, duties and levies, governmental and/or municipal and/or
     otherwise, and other payments of any kind or nature whatsoever, relating to
     the conduct of the business of the Lessee and/or of the occupier of the
     Premises and/or due in relation to the Premises and/or which shall become
     due by the Lessee and/or in relation to the Premises during the Lease
     Period, shall be payable by the Lessee including such taxes, duties and/or
     levies as are due on the common property (hereinafter: "Compulsory Charges
     in connection with the Common Property"). The Lessee's share of the
     Compulsory Charges in connection with the Common Property shall be
     determined in accordance with the provisions of the Management Agreement.

56.  Value Added Tax
     ---------------

     Any amount and/or security which the Lessee is obliged to pay or deposit
     under this Agreement shall be subject to value added tax at the lawful rate
     as at the date of such payment or deposit payable by the Lessee. Subject to
     the provisions of paragraph 14.2 above, value added tax shall be payable on
     the date prescribed for effecting all such payments or deposits as set
     forth in this Agreement, and against an appropriate tax invoice under law.

57.  Jurisdiction
     ------------

     It is agreed by the parties that they choose the competent court in the Tel
     Aviv district as having exclusive jurisdiction in any matter connected with
     and/or pertaining to this Agreement.

58.  Prohibition against the Set Off of Payments
     -------------------------------------------
<PAGE>

                                       63

     The parties agree that the amounts which they owe and/or shall owe to each
     other arising from this Agreement, or from any cause whatsoever, shall not
     be capable of set off, unless otherwise specified in this Agreement. For
     the avoidance of doubt it is stipulated that where the Lessee has a claim
     and/or demand against the Company, it shall not be entitled to set off the
     amount of such demand and/or claim.

59.  Waivers and Alterations to the Agreement
     ----------------------------------------

     59.1 Any alteration to the conditions of this Agreement shall be in force
          only if executed  in  writing and signed by both parties.

     59.2 Any waiver of the rights of either party under this Agreement shall be
          effected only in writing and under the signature of those authorised
          to bind that party. Any delay in the utilisation of any rights under
          this Agreement shall not be regarded as a waiver.

60.  Delivery of Notices
     -------------------

     Any notice which the parties to this Agreement are obliged to deliver to
     each other shall be regarded as having been delivered within 48 hours from
     the time of dispatch thereof by registered post from a post office in
     Israel to the address of the parties as set forth in this Agreement.

     The delivery of any notice at the Premises to the Lessee or to any employee
     thereof, or the affixing of any such notice to the door of the Premises
     shall be regarded as due delivery under law to the Lessee.

     In addition to the foregoing, the parties shall be entitled to send notices
     to each other by messenger and in such event the time of delivery shall be
     regarded as the time of delivery which appears on the delivery notice
     signed by such messenger.

     The address of the parties as set forth in paragraph 61 hereunder shall
     also be regarded as their address for the purpose of the service of court
     processes.

61.  Addresses
     ---------

     The addresses of the parties for the purpose of this Agreement are:

     The Lessee:    10 Martin Gahal Street, Kiryat Arieh, Petah Tikva, and from
     ----------
                    the date of acceptance of possession of the Premises and
<PAGE>

                                       64

                    thereafter the address of the Lessee shall be at the
                    Premises.

     The Company: ______________________________________________
     ----

          In witness whereof the parties have affixed their signatures

     "signed" Accord Networks Ltd.      "signed" Azorei Mallal Industries Ltd.
     -----------------------------      --------------------------------------
               The Lessee                               The Company
<PAGE>

                                       65

                                 Certification
                                 -------------

I the undersigned Alon Badihi, Advocate, certify that this Agreement and the
Annexes thereto were signed by Zigi Gavish who is authorised to sign on behalf
of the Lessee corporation, and that the signature of the above-named in
conjunction with the seal of the corporation is binding on it for all intents
and purposes.

This 25/th/ day of April 1999.

                                        "signed" Alon Badihi, Adv.
                                             Licence No. 24356
                                             -----------------
                                                 Signature

                                 Certification
                                 -------------

I the undersigned Vicki Zamir-Sharon, Advocate, certify that this Agreement and
the Annexes thereto were signed by Daniel Lavon and by Arnon Brodner who are
jointly authorised to sign on behalf of the corporation being the Company, and
that the signature of the above-named in conjunction with the corporation's seal
is binding on it for all intents and purposes.

This 26/th/ day of April 1999.

"signed" Vicki Zamir-Sharon, Adv.
                                                 Licence No. 21299
                                                 -----------------
                                                     Signature
<PAGE>

                                       66

                                    ANNEX A

[Drawing showing areas in Building number 1 in the Park Azorim business complex
in Tel Aviv, Israel, including an area of 790 square meters on the fourth floor,
790 square meters on the fifth floor and approximately 330 square meters on the
third floor.]

                                  [PAGE ONE]

                                  [PAGE TWO]
<PAGE>

                                       67

                             MANAGEMENT AGREEMENT
                             --------------------

                        Annex B to the Lease Agreement
                        ------------------------------

       Made and entered into at _________ on ____ day of __________ 1999

Between:      Azorei Mallal Industries Ltd.
              of __________________ Street
              (hereinafter: "the Company")

                                                              Of the First Part:
                                                              -----------------

And:          Accord Networks Ltd.
              of 22 Hayetzira Street, Kiryat Arieh, Petah Tikva
              (hereinafter: "the Lessee")

                                                             Of the Second Part:
                                                             ------------------

Whereas       In pursuance of a ruling of the Israel Lands Board No. 717 and in
              accordance with the Development Agreement, the Company is
              establishing the Park on the Land, which includes the Building, as
              these terms are defined in the Lease Agreement;

And Whereas   The Lessee has leased from the Company, in accordance with the
              matters set forth in the Lease Agreement dated ________
              (heretofore and hereinafter: "the Lease Agreement"), the Premises
              as defined in the Lease Agreement;

And Whereas   The Lessee has agreed that the management, maintenance and
              operation of the Park and of the Building, together with all the
              sections thereof, shall be undertaken exclusively by the Company
              and/or some person on its behalf and it undertakes and agrees to
              act in accordance with the conditions of this Agreement and to
              participate in the management costs as set forth herein;

And Whereas   This Agreement is intended to regulate the reciprocal obligations
              between the parties in all matters pertaining to the management
              and rendering of the services in the Building;

   Now therefore it is agreed and stipulated between the parties as follows:
   ------------------------------------------------------------------------

1    Preamble
     --------
<PAGE>

                                       68

     1.1  The preamble to this Agreement, including the definitions and the
          declarations contained therein, constitute an integral part hereof and
          bind the parties for all intents and purposes.

     1.2  The numbering of the paragraphs in this Agreement and the headings
          thereof are for the purpose of convenience only, do not constitute a
          part of the Agreement and no use shall be made of them in the
          interpretation of the Agreement.

     1.3  Upon signature of this Agreement and the Lease Agreement all
          declarations of the parties and/or all obligations and/or any
          representation made by them prior to signature of these Agreements
          shall be void ab initio.

     1.4  The terms in this Agreement shall have the meanings attributed to them
          in the Lease Agreement save if expressly otherwise indicated.

2.   Definitions
     -----------

     In the absence of an intention otherwise arising from the contents of the
     text, the following terms shall have the following meaning:

    2.1   "Common Property"

          Any part of the Building and/or Park which the Company has designated
          and/or shall designate from time to time and in its sole and absolute
          discretion, for the common use of all or any part of the occupiers of
          the Building and/or of the Park, including and without derogating from
          the generality of the foregoing:

          (1)  All sections of the Building including shelters, protected open
               areas, machinery rooms, electricity rooms, the roofs, external
               walls, foundation, stairwells, passages, entrances, lifts, refuse
               rooms, electricity rooms, courtyards, gardens, parking lots,
               installations, roads, ramps and pavements as well as the other
               areas in the Building, save for the Premises, and all areas of
               the Park, apart from those sections that have been leased or sold
               and/or intended for sale or lease in the future, and save for
               those parts of the Building and/or the Park which are to be
               extracted by the Company from the Common Property in its
               discretion.
<PAGE>

                                       69

          (2)  Air conditioning installations and lifts, plumbing of every kind
               whatsoever and all the other installations situated in the
               Building and/or serving it and/or using it and which the Company
               has designated for common use by all the occupiers of the
               Building or by the majority thereof even though located within
               the confines of those areas which have been sold or let or those
               areas linked to them.

          (3)  In any event the Common Property shall not include sections which
               have been linked by the Company to any particular unit in the
               Building, in the Company's discretion. In addition it is
               stipulated that the Common Property shall not include parking
               bays in the parking lots of the Building and Park which have been
               let to occupiers in the Building or Park and with respect to
               which a subscription fee is charged. In addition the SPA, as
               defined in the Lease Agreement, shall not be included.

     2.2  "The Services"

          The provision of information services in the Building and Park,
          management, operation, repair, maintenance, insurance, upkeep,
          lighting and gardening of the Common Property as defined above and of
          plumbing, installations and areas in the Building serving and/or using
          the Building and/or the carrying out of acts in the Building and/or
          supplies serving or which are intended to serve or to be of service to
          the Premises or the Building.

          It is hereby recorded and agreed that the Services under this
          Agreement also include the maintenance of the service rooms situated
          on the floors of the Premises.

          Without derogating from the generality of the foregoing, the Company
          shall be entitled, in its discretion, to manage, undertake, initiate
          and to provide or to cease to provide or to undertake the Services set
          forth above or any part thereof as well as any other service, at its
          election.

          Having regard to the special nature of the Park and to the complexity
          thereof, the services may also include special services which are not
          ordinarily available in an average building, such as: the payment of
          duties, taxes and levies due and/or which may become due with respect
          to the Common Property, advertising, signs, public relations, the
          organisation of functions and so forth, all of which are at the
          Company's discretion.
<PAGE>

                                      70

    2.3  "The Effective Date"

         The date on which the Management Company commences the management and
         rendering of the services, as prescribed in paragraph 5.1 hereunder.

    2.4  "The Lease Agreement"

         The agreement between the Company and the Lessee dated ________,
         whereby the Lessee leases the Premises from the Company, and to which
         this Management Agreement is attached as an integral part thereof as
         Annex B.

3.   Management of the Services and the Rendering thereof
     ----------------------------------------------------

     3.1  (a)  The Company assumes responsibility for the sole management
               and rendering of the Services in the Building and Park for the
               period of the Agreement as set forth in paragraph 5 hereunder,
               and the Lessee agrees thereto and delegates to the Company the
               sole management and rendering of the Services for the period of
               the Agreement, and undertakes not to render the Services itself
               or through others.

          (b)  The Company shall be entitled, from time to time and in its
               discretion, to determine the scope of the Services, the type and
               character thereof and that part of them which are to be provided
               to the Park and/or to the Building and/or to certain parts of
               them, if at all, the time and manner of the provision thereof and
               the period thereof.

          (c)  The management and rendering of the Services shall be undertaken
               by the Company itself and/or by others and/or some personally and
               some by others, at the Company's discretion. Without derogating
               from the foregoing, it is hereby agreed that the Company shall be
               entitled to enter into contractual arrangements from time to time
               with any other entity under agreements in the matter of the
               provision of maintenance services for the systems, installations
               and areas of the Building, depending on the economic viability to
               the Company on the one hand and the quality assurance of the
               service on the other.
<PAGE>

                                      71

    3.2   The Lessee agrees in advance to the Company being entitled to
          determine from time to time procedures and provisions in connection
          with the management and rendering of the Services as it shall see fit,
          and to change the same from time to time. The Lessee undertakes to act
          in accordance with the foregoing provisions, so long as these do not
          expressly conflict with the provisions of this Agreement and do not
          prejudice its reasonable use of the Premises.

    3.3   For the purpose of the management and rendering of the Services as set
          forth in this Agreement the Company shall be entitled to establish an
          office in the Building and may engage a staff of technical,
          professional, managerial and other employees for the carrying out the
          work involved in the management and rendering of the Services as well
          as being entitled to manage and render all or any part of the Services
          through contractors, sub-contractors or in any other manner as may be
          determined by it, including the part time and full time employment
          under special contracts or on such conditions as it shall deem fit of
          service providers according to need.

    3.4   The Lessee hereby undertakes:

          (a)  To be bound to the Company in all matters pertaining to the
               management and rendering of the Services under this Agreement.

          (b)  That it and all persons acting by virtue of it and on its behalf
               shall co-operate with the Company and shall extend assistance to
               it in all instances where such co-operation or assistance is
               required, in order to enable the good and regular management and
               rendering of the Services.

          (c)  To allow the Company and those acting by virtue thereof to enter
               upon the Premises for the purpose of undertaking work connected
               with the management and rendering of the Services, irrespective
               of whether such works are being carried out for the Lessee or for
               any other occupier of the Building, or for the purposes of
               effecting repairs required in other areas of the Building, and
               inter alia to open walls, floors, ceilings and other parts, to
               replace and repair plumbing and conduits and to connect up to
               them and to
<PAGE>

                                      72

               carry out any work required in the Company's discretion for the
               purpose of the fulfilment of its obligations under this
               Agreement, and the Lessee shall have no claim against the Company
               arising from any interference caused to it as a result thereof.
               In any such instance of the aforesaid acts, the Company shall
               endeavour to ensure that the interference to the Lessee is as
               minimal as possible and that the Premises are restored to their
               former state as soon as possible.

          (d)  To notify the Company concerning any failure requiring action on
               the part of the Company.

          (e)  The Lessee declares that it is aware that the Company shall be
               entitled - but not obliged - to register this Agreement when this
               becomes possible in the Land Registration Office, either through
               its inclusion within the framework of the condominium rules
               relating to the Park or to the Building, or through the
               registration of a note as to the existence of this Agreement and
               that it is binding, or in any other manner, in the absolute
               discretion of the Company.
<PAGE>

                                      73

4.   Costs of Management and of Rendering the Services
     -------------------------------------------------

     4.1  The Lessee hereby undertakes to bear, in conjunction with the other
          occupiers of the Building and of the Park, all the costs involved in
          the management and rendering of the Services, including the cost of
          financing involved in the rendering of the Services (hereinafter:
          "the Basic Costs") together with a management fee at the rate of 15%
          of the Basic Costs (hereinafter: "the Management Fee"). The Basic
          Costs together with the Management Fee shall hereinafter be called
          "the Costs".

     4.2  The Lessee's share in all the Costs shall be determined in accordance
          with a key to be prepared by the Company and subject to the provisions
          hereunder. In the apportionment of the Costs among the occupiers in
          the Building and in the Park, the Company shall act as follows:

          (a)  The computation of the Lessee's pro rata share of the Costs
               (hereinafter: "the Pro Rata Share") shall be made by dividing
               the area of the Premises by the total area of the Building or
               Park designated for sale and/or letting, in the absolute
               discretion of the Company.

               Differentials linked to the Index as defined in paragraph 8.3
               hereunder, mutatis mutandis, shall be added to the Lessee's share
               of Costs, where the Base Index for the computation thereof is
               that Index as published on the 15th day of the month prior to the
               date of the notice of demand.

               The Lessee shall not be entitled to appeal against its share in
               the Costs or against any data serving as a basis for the
               computation of its share in the Costs, nor against the date to be
               determined by the Company for the payment thereof.

          (b)  It is hereby agreed that the Company shall be entitled to alter
               the key for the apportionment of the Costs and to lay down
               another ratio between the areas having a different character or
               use in the Building or Park, in its sole discretion, and the
               Lessee shall have no claim and/or demand and/or action against
               the Company in connection therewith. In addition the Company
               shall be entitled to determine a key for the computation of the
               Lessee's share in the Costs as a Pro Rata Share among all
               occupiers of the Park of the Costs with respect to the Park and
               the Building and the rest of
<PAGE>

                                      74

               the Buildings in the Park together or the separate computation of
               the Pro Rata Share of all the occupiers of the Park of the Costs
               with respect to the Common Areas in the Park, and the separate
               computation of the Pro Rata Share of all occupiers of the
               Building of the Costs with respect to the Common Areas in the
               Building only, in its absolute and sole discretion.

          (c)  The Costs shall be payable by the Lessee and the other occupiers
               of the Building and/or the Park in accordance with the provisions
               in paragraph (a) above of this paragraph.

          (d)  The Lessee undertakes to pay to the Company its share of the
               Costs, in accordance with the Company's estimation, for each
               quarter in advance, on the first day of the first calendar month
               for the quarter for which such payment is being made.

               For the purposes of this paragraph "quarter" means: a period of
               three months commencing in January of each year and ending in
               March of each year; a period of three months commencing in April
               of each year and ending in June of each year; a period of three
               months commencing in July of each year and ending in September of
               each year; a period of three months commencing in October of each
               year and ending in December of each year.

     4.3  Notwithstanding the provisions of paragraphs 4.1 and 4.2 above, it is
          agreed that during the course of the first year of the lease, in place
          of the Costs as defined above, the Lessee shall pay to the Company an
          fixed sum of $ 3.50 per month for every square metre of the Area of
          the Premises (as defined in the Lease Agreement).

     4.4  For the avoidance of doubt, it should be hereby clarified that the
          Lessee shall not be liable for any duplication of the payments set
          forth in sub-paragraph 4.1, 4.2 and 4.3 above, and payments which are
          remitted to the Company under sub-paragraph 4.3 above shall cancel
          liability for the payment prescribed in sub-paragraph 4.1 and 4.2
          above, and vice versa.

     4.5  The Lessee hereby undertakes to pay to the Company the amounts set
          forth above, irrespective of whether or not it makes use of the
          Premises, as set forth in paragraph 11 of the Lease Agreement.

     4.6  The Company shall prepare, within a period not exceeding 6 (six)
          months from the end of each calendar year, a final account of the
          Costs
<PAGE>

                                      75

          during the aforesaid calendar year (hereinafter: "the Annual
          Account") and shall furnish the Lessee with a copy of such Account.
          For the purposes of the preparation of the Annual Account, all income
          and expenditure shall be linked to the Consumer Price Index, on the
          basis of the last known indices, on the date of effecting such income
          or expenditure. The aforesaid Annual Account, audited and confirmed by
          the Company's accountant, shall serve as conclusive proof as to the
          level of the Costs and as to the Lessee's liability for the payment of
          the Costs in accordance therewith.

    4.7   The Lessee hereby undertakes to pay to the Company the differentials,
          if any, between the amounts paid by the Lessee on account of its share
          of the Costs and its share of the Costs as determined in the Annual
          Account. Such payment shall be effected within 7 days from the date of
          submission of the Annual Account by the Company to the Lessee. Should
          the differentials be to the credit of the Lessee, the Lessee's account
          shall be credited accordingly.

    4.8   The Lessee shall pay value added tax to the Company on each payment
          for which it is liable under this Agreement, together with such
          payment, at such rate as shall be applicable at the time of actual
          payment, and it shall receive an appropriate tax invoice from the
          Company.

    4.9   As regard the first calendar year: the Company shall be entitled, in
          its absolute discretion, to submit an Annual Account relating to the
          period commencing on the Effective Date and ending at the end of that
          year, or to add the Annual Accounts relating to this period to the
          following calendar year.

    4.10  In order to enable the Company to effect maintenance and repairs to
          the Building and/or the repair and/or replacement of installations
          and/or equipment and/or systems in the Building designated for the
          common use of all or any section of the occupiers of the Building
          and/or the Park, the Company shall conduct an amortisation fund
          (hereinafter: "the Amortisation Fund").

          Simultaneously with the payment of the Lessee's share of the Costs as
          defined above and at the time of payment thereof, the Lessee shall pay
          to the Company, in addition to the amount of the Costs linked as
          aforesaid, a sum equal to $ 0.25 (one quarter of a United States
          dollar) for each square metre of the Premises, as its participation in
          the Amortisation Fund (hereinafter: "the Participation Amount"). The
          Company shall be entitled to increase the Participation Amount to as
          much
<PAGE>

                                      76

          as $ 0.30 (Thirty United States Cents) at the end of the year from the
          Date of Delivery of possession as set forth in paragraph 11 of the
          Lease Agreement.

          The Amortisation Fund shall be conducted and audited by the Company's
          accountant in accordance with accepted accounting principles in
          relation to amortisation funds, and its reports shall be open for
          perusal by the Lessee at the Company's offices.

          For the avoidance of doubt it is hereby stipulated that the
          Participation Amount which the Lessee pays arising from this paragraph
          4.10 shall constitute for all intents and purposes a part of the
          payments for which the Lessee is liable with respect to its share of
          the Costs as set forth in paragraphs 4.1 and 4.3 above.

5.   The Period of the Agreement
     ---------------------------

     5.1  The Company undertakes to render and manage the Services with effect
          from the Date of Delivery of the Premises to the Lessee under the
          Lease Agreement. The Management Company may render partial or full
          services according to need and in its discretion from the date the
          Building is first occupied until the Date of Delivery to the Lessee.
          However, under no circumstances shall the Company be obliged to
          commence the management of the Services and the rendering thereof
          prior to the date on which the Common Property of the Building and/or
          the Park is delivered to its possession by the contractor /
          contractors carrying out the work of the construction of the Building
          and/or the Park, depending on the context.

     5.2  The occupiers of 75% of all areas in the Park designated for letting
          and/or sale are entitled, under a document signed by them, to give
          notice to the Company that they do not wish the subsistence any
          particular service from among the Services provided by the Company at
          that time. In such an event, the Company shall cease to provide that
          service on the expiration of three months from receipt of the
          foregoing notice, provided that should the Company be of the opinion
          that it is essential to maintain the foregoing service in the
          Building, it shall be entitled to approach the managing director of
          the Company and to obtain his final ruling in connection therewith. It
          is hereby recorded that with respect to any service the supply of
          which has been discontinued under this paragraph above, the occupiers
          of the Park shall not be entitled to provide or supply that service
          themselves or through any other corporation or entity whatsoever. For
          the avoidance of doubt, in regard to areas in the
<PAGE>

                                      77

          Building and/or the Park designated for letting and/or sale which have
          not been so let or sold, the Company shall be regarded, for the
          purposes set forth in this sub-paragraph 5.2 and sub-paragraph 5.3
          hereunder, as the lessee of those areas.

     5.3  The occupiers of 75% of all areas in the Park designated for letting
          and/or sale are entitled, in a document signed by them to be submitted
          to the Company, to request the supply of a service which is not among
          those provided by the Company at that time. The Company shall notify
          the occupiers as aforesaid within 30 days from receipt of their
          foregoing request, whether it is possible for it to supply the
          additional services, and if so, when such aforesaid services are to be
          provided and the approximate cost thereof. In the event of the Company
          deciding that a particular service shall not be provided by it, the
          occupiers of not less than 75% of all the areas in the Park as
          aforesaid shall be entitled to enter into contractual arrangements
          with any third party whatsoever for the purpose of the provision of
          the service as aforesaid, but only subject to obtaining the prior
          written consent of the Company. The Company shall be entitled to
          refuse its consent as aforesaid should it be of the opinion that
          entering into contractual arrangements as aforesaid is liable to
          prejudice the Company and/or the remaining lessees and/or users of the
          Building and the Park.

     5.4  Any change in the Costs, if required, resulting from the
          discontinuance of the supply of any of the Services or the supply of
          additional services as set out above, shall be determined by the
          Company in its sole discretion and the Lessee shall bear any addition
          to the Costs laid down as a result thereof.

     5.5  The Lessee undertakes to be responsible for all the obligations
          imposed upon it under this Agreement with effect from the Date of
          Delivery of the Premises to it in accordance with the Lease Agreement,
          or from such earlier date as is prescribed therefor in the Lease
          Agreement.

6.   Value Added Tax
     ---------------

     Any amount which the Lessee is obliged to pay or deposit shall be subject
     to value added tax at the lawful rate thereof as at the date of the payment
     or depositing thereof. It is agreed that the Company shall be entitled to
     round off the amounts which the Lessee is obliged to pay or deposit
     pursuant to this Agreement or under any law to the nearest whole shekel
     value. The payment of value added tax shall be effected on the date
     prescribed for making any of the payments or deposits set forth in this
     Agreement, and against a tax invoice.
<PAGE>

                                      78

7.   Transfer of Handling of Management of Services
     ----------------------------------------------

     Should the Company decide to transfer the handling of the management of the
     Services and the rendering thereof and all matters flowing therefrom,
     including all its rights and obligations under this Agreement, to a third
     party, prior to effecting the transfer of such handling as aforesaid, it
     shall be obliged to obtain a letter of undertaking from such third party
     whereby the aforesaid third party agrees to assume the fulfilment of all
     the Company's obligations under this Contract.

8.   Relief in the event of a Breach of the Agreement
     ------------------------------------------------

     8.1  In the event of the Lessee failing to pay on due date any amount
          whatsoever due or which shall become due by it to the Company under
          this Agreement and/or should the Lessee be in breach of any of the
          provisions of this Agreement, the Company shall be entitled, without
          prejudice to its right to any other lawful relief, and at its
          election, to take one or more of the following steps:

          (a)  To discontinue the management and rendering of the Services
               provided to the Lessee under this Agreement, in whole or in part.

          (b)  To seek an injunction and/or mandamus, to take any action
               whatsoever or to refrain from any action as aforesaid, for the
               purpose of enforcing the aforesaid payment and/or any other
               obligation of the Lessee under this Agreement as the Company
               shall see fit.

          (c)  To act in any other manner available to it according to law,
               including the cancellation of this Agreement and the cancellation
               of the Lease Agreement with the Lessee and the eviction of the
               Lessee from the Premises.

     8.2  It is agreed that with respect to any amount which the Lessee failed
          to pay on the due date thereof (hereinafter: "the Amount in Arrears")
          the Lessee shall be obliged to pay to the Company, in addition to the
          Amount in Arrears, linkage differentials, the manner of computation of
          which is set out hereunder (the Amount in Arrears together with
          linkage differentials shall hereinafter be called: "the Re-valued
          Indebtedness"). The Re-valued Indebtedness shall bear interest at the
          rate of 10% per
<PAGE>

                                      79

          annum (hereinafter: "the Annual Interest") from the date of creation
          of the indebtedness to the Effective Date as defined hereunder.

     8.3  In this paragraph:

             Index -          means the Consumer Price Index, including
             --------         vegetables Bureau of Statistics. Should the base
                              of the Index be replaced  or should the method
                              of computation and preparation thereof be changed
                              or should it be published by another entity in
                              place of the aforesaid Bureau, the Company shall
                              make the computation of the rise of the
                              Index for the purposes of this clause, by having
                              regard to the foregoing changes.

                              the last Index as shall be known prior to the
             Base Index -     date payment of any of the amounts which the
             ------------     Lessee is obliged to pay as set forth in this A
                              Agreement and not so paid on the due date thereof.

                              the last Index as shall be known on the first
             New Index -      day of the month in which the payment was
             ---------        actually made (hereinafter: "the Effective
                              Date").

             Linkage          the difference between the New Index and the Base
             --------         Index, divided by the Base Index and multiplied
             Differentials -  by the Amount in Arrears.
             ---------------

    8.4   Should the actual payment of the Amount in Arrears be made on any date
          after the Effective Date and up to the last day of the month of
          payment, inclusive, (hereinafter: "the Date of Actual Payment") daily
          interest at a rate to be determined from time to time during the month
          of payment, in unauthorised current overdraft accounts at Bank
          Hapoalim Ltd., shall also be added to the Re-valued Indebtedness, from
          the Effective date to the Date of Actual Payment.

          Any amount paid by the Lessee to the Company arising from any
          indebtedness in arrears shall be split and attributed proportionately
          against the components of the indebtedness in arrears, namely, the
          daily interest component, the annual interest component, the linkage
          differentials component and the Amount in Arrears component.
<PAGE>

                                       80

          Should the aforesaid payment be insufficient to cover the full
          indebtedness of the Lessee to the Company as at the Date of Actual
          Payment, the provisions set forth in sub-paragraph 8.2 above shall
          apply with respect to the balance of the Amount in Arrears which had
          not been discharged as set out above.

    8.5   It is agreed and declared between the parties that in addition to any
          relief provided for under this Agreement and in any law, the Lessee
          shall be obliged to pay to the Company, in addition to the Amount in
          Arrears, all the costs occasioned to the Company in all matters
          relating to legal action against the Lessee in connection with any
          hearing or legal proceedings or Execution Office action, including the
          legal fees of the Company attorney who dealt with the matter
          (hereinafter: "the Legal Costs").

          For the avoidance of doubt it is stipulated that the Lessee shall be
          obliged to refund to the Company all the Costs occasioned to the
          Company arising from the filing of a claim and/or the institution of
          execution proceedings against the Lessee, even though such Costs had
          not been approved by the Court or the Execution Office for payment for
          any reason whatsoever. The Costs set out in this paragraph shall be
          included within the framework of the Company's legal costs and the
          provisions of sub-paragraphs 8.5 and 8.6 hereunder shall also apply
          thereto.

    8.6   The Lessee shall pay the aforesaid Legal Costs to the Company
          immediately after receipt of a written demand therefor from the
          Company, together with linkage differentials and interest, as
          indicated above in this paragraph, from the date of dispatch of the
          demand to date of actual payment.

    8.7   The parties agree that the Company's documents shall serve as prima
          facie and conclusive proof as to the amount of the Legal Costs.

9.  The Lessee's Obligation to Effect Payments
    ------------------------------------------

    The Lessee's refusal or unwillingness to receive any service whatsoever
    and/or desire to discontinue the management and rendering of the Services
    with respect to the Premises, in whole or in part, and/or the discontinuance
    of the management and rendering of the Services by the Company, shall not
    release the Lessee from the obligation to participate in all the Costs and
    Management Fees under the conditions of this Agreement.
<PAGE>

                                      81

10.  Non Set Off of Payments
     -----------------------

     The parties agree that the amounts which they owe or shall owe to each
     other under the provisions of this Agreement shall not be capable of set
     off.

11.  Condominium Representation
     --------------------------

     The Lessee hereby agrees that during the entire period of the Agreement the
     Company or any person appointed by it shall serve as the "Condominium
     Representation" in accordance with section 65 of the Lands Law
     (hereinafter: "the Lands Law") 1969, and it shall support the foregoing
     appointment insofar as may this be necessary.

12.  Costs of the Agreement
     ----------------------

     The Lessee undertakes to bear the cost of duly stamping this Agreement, or
     any tax or duty which may be recoverable with respect thereto in the
     future.

13.  Delivery of Notices
     -------------------

     Any notice which the parties are obliged to deliver to each other under
     this Agreement shall be regarded as having been delivered on the expiration
     of 3 business days from the time of dispatch thereof by registered post
     from a post office in Israel to the address of the parties as set forth in
     this Agreement, or to such address as shall be operative as at the date of
     dispatch of such notice.

     The delivery of a notice at the Premises to the Lessee or to any of its
     employees or the affixing thereof to the door of the Premises shall be
     regarded as duly delivery to the Lessee.

     In addition to the foregoing, the parties shall be entitled to send notices
     to each other by messenger and in such event the time of delivery shall be
     regarded as the time of delivery which appears on such delivery notice
     signed by such messenger.

     The transmission of a notice by facsimile shall be regarded as delivery
     thereof by a messenger at the time of such transmission.

     The address of the parties as set forth in the Lease Agreement shall be
     regarded as their address both for the purpose of this Agreement and for
     the purpose of the service of court processes.
<PAGE>

                                      82

14.  General
     -------

     All the provisions of this Agreement add to the provisions of the Lease
     Agreement entered into between the Company and the Lessee, and nothing
     therein shall be construed as derogating in any manner whatsoever from the
     provisions of the Lease Agreement. In the event of a contradiction between
     the provisions of this Agreement and those of the Lease Agreement, the
     provisions of the Lease Agreement shall take precedence.

     In witness whereof the parties have affixed their signatures at the
                        place and on the date as above:

"signed" Azorei Mallal Industries Ltd.  "signed" Accord Networks Ltd.
--------------------------------------  -----------------------------
            The Company                          The Lessee
<PAGE>

                                       83

                                   APPENDIX C
                                   ----------

                          PARK AZORIM - BUILDING NO. 1
                  INDUSTRIAL AREA KIRYAT ARYEH - PETACH TIKVA
                  -------------------------------------------

                   BASIC TECHNICAL SPECIFICATION FOR LESSEES
                   -----------------------------------------

A.   BUILDING ENVELOPE
     -----------------

1.   General
     -------

     This building is planned on a site area of approx. 43 dunam (10.75 acres)
     located in the Kiryat Aryeh Industrial Area in Petach Tikva, identified as
     plot no. 1065, on parts of parcels 87, 90, 92, 94 and 96 in block 6640.

     The building is the first of a campus of future buildings which will rise
     around a central common green park and parking area.

2.   Description Of The Building
     ---------------------------

     The building will include a basement parking level with an additional
     basement level, ground floor, commercial/offices, eight office floors and
     roof level with technical installations as approved by the Planning and
     Building Authority.

3.   Table Of Gross Areas According To The Planning Submission
     ---------------------------------------------------------

<TABLE>
<CAPTION>
      Floor                             Area M/2/              Designation
----------------------------------------------------------------------------------------
<S>                                  <C>                    <C>
Sub-basement                             313.62             Future connections
----------------------------------------------------------------------------------------
Basement                               4,907.48             Parking
----------------------------------------------------------------------------------------
Ground floor                             804.75             Commercial/offices
----------------------------------------------------------------------------------------
Second floor                           1,046.20             Offices
----------------------------------------------------------------------------------------
Third floor                            1,315.00             Offices
----------------------------------------------------------------------------------------
Floors 4 - 9 each                      1,538.30             Offices
----------------------------------------------------------------------------------------
Floors 4 - 9 total                     9,229.80             Offices
----------------------------------------------------------------------------------------
Roof plant housings                      321.52             Technical plant
----------------------------------------------------------------------------------------
Total                                 17,938.37
----------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                       84

4.   Structure
     ---------

     (a)  Foundation
          ----------

          Concrete pile foundations and load bearing walls.

     (b)  The floors for office and commercial use will be designed for a
          loading of 500 kg/m/2/. In any case that the Lessee wishes to install
          unusually heavy equipment (safes, refrigerators, compactors, etc.)
          written permission must be obtained from the Developer.

     (c)  The building facades will be executed in reinforced concrete or
          concrete blocks faced with natural stone and aluminium in conjunction
          with aluminium curtain walling, aluminium windows and reflective or
          anti-sun glass.

     (d)  Partition walls between separate leasings will be constructed with
          double plasterboard partitions with double board each side overall
          thickness approximately 17 cm including 2" insulation sheeting, or 20
          cm thick concrete blocks, according to the Developer's decision.

     (e)  The building will have two service cores each including: two elevators
          stairs, shelter at each level, air conditioning plant room, cupboards
          for electricity, communications etc. shafts, and toilets at the office
          levels.

          The two ends of the building will each contain an additional secondary
          service core, each comprising open stairs, elevator connecting the
          basement to the entrance level. Refuse room at entrance level.

5.   Description of The Rental Area Floors
     -------------------------------------

     (a)  Basement
          --------
<PAGE>

                                       85

          (1)  Level - 4.35.

          (2)  Net height not less than 2.20 metres.

          (3)  Floor finish: smoothed concrete.

          (4)  Wall finish: acrylic paint on concrete.

          (5)  Exposed concrete walls or ceilings will be left in concrete
               finish or paint finish as above in accordance with the
               Architect's decision.

     (b)  Ground Floor
          ------------

          (1)  Level; -+  0.00.
                       -
          (2)  Gross floor to ceiling height about 4 metres.

          (3)  Floor finish: 30/20 ceramic tiles base price $ 12/ m/2/.

          (4)  Internal finish of the building envelope (columns) plasterboard
               or plaster finished with acrylic paint or synthetic limewash
               according to the Developer's choice.

          (5)  Elevations and openings: fixed shopfronts with opening elements
               of aluminium and reflective or anti-sun glass.

     (c)  Office Floors 2 - 9
          -------------------

          (1)  Levels: +4.50, +8.00, +11.50, +15.00, +18.5-, +22.00, +25.50,
               +29.00.

          (2)  Gross floor to ceiling height about 3 meters.

          (3)  Finish of building envelope: plasterboard or plaster finished
               with acrylic paint or synthetic limewash according to the
               Developer's choice.
<PAGE>

                                       86

          (4)  Elevations and openings: aluminium windows with reflective or
               anti-sun glass or curtain walling with glass as above in
               conjunction with opening windows and aluminium panels.

6.   Description of The Service Cores
     --------------------------------

     (a)  Staircases
          ----------

          (1)  Finish of stairs - risers and treads - terrazzo.

          (2)  Finish of landings - terrazzo tiles 30/30 or 20/20 cm. Same
               colour as stairs.

          (3)  Finish of walls and ceilings - acrylic paint or fairfaced
               concrete.

          (4)  Balustrades and handrails - galvanised metal finished with
               "Superlac" paint or equivalent.

     (b)  Shelter - Protected Space At Each Level
          ---------------------------------------

          (1)  Floor tiles - 30/30 cm ceramic or granite porcelain or terrazzo.

          (2)  Walls and ceiling finished with thin cement plaster according to
               the requirements of the Civil Defence Command.

          (3)  Including all fixtures and fittings as required by the Civil
               Defence Command.

     (c)  Entrance Lobby
          --------------

          (1)  Floor finish: granite of a type as approved by the Architect
               together with limestone, as designed by the Architect.
<PAGE>

                                       87

          (2)  Ceiling finish: mineral acoustic ceilings in conjunction with
               plasterboard and perforated aluminium trays according to the
               Architect's design.

          (3)  Walls faced in stone of type "Delicto or equivalent-beige".

     (d)  Elevators
          ---------

          (1)  Two fast elevators to each service core to the full height of the
               building, plus one elevator to each secondary service core
               connecting the basement to the ground level according to the
               Elevator Consultant's design.

          (2)  The execution of the elevator work will be carried out by a
               recognised reputable company.

          (3)  The elevator floor will be granite of a type chosen by the
               Architect.

          (4)  The walls and ceiling will be finished with wood laminated panels
               in conjunction with stainless steel and mirror.

          (5)  Lighting to a high standard of finish.

     (e)  Floor Lobbies
          -------------

          (1)  Flooring: granite porcelain or ceramic tiles of dimensions up to
               30/30 cm according to the Developer's choice.

          (2)  Wall finish: stone "Delicto beige" or equivalent in conjunction
               with granite porcelain or ceramic tiles as above and decorative
               plaster as the example of "valch" or equivalent.

          (3)  Ceiling finish: plasterboard ceilings with perforated aluminium
               trays or mineral panels according to the Architect's design.
<PAGE>

                                       88

     (f)  Floor Toilets
          -------------

          (1)  Walls and ceilings finished with granite porcelain or ceramic
               tiles of dimensions up to 30/30 cm. according to the Architect's
               design.

          (2)  Prefabricated partitions with Formica finish in conjunction with
               aluminium manufactured by "Domo" or equivalent.

          (3)  Ceiling: perforated aluminium trays.

          (4)  Class A low flushing lavatories manufactured by "Charsah " or
               equivalent.

          (5)  Basin counters to be "kesar" or natural stone according to the
               Architect's choice, including class A chinaware sinks fixed from
               below manufactured by  "Charsah" or equivalent.

          (6)  Counter top fixed mixer taps, chrome-nickel finish "Luxomat"
               manufactured by Chamat or equivalent.

7.   Roof Waterproofing
     ------------------

     The waterproofing of the roofs of the building will be executed in
     accordance with the following specification:

     (a)  The roof falls will be formed with a layer of lightweight porous
          concrete of type "Betkal" or Medah of the thickness required to give
          minimum falls of 1% - 1.5% with a minimum thickness of 4 cm.

     (b)  Formation of concrete angle fillets along the length of the parapets
          according to the instructions of the manufacturers of the
          waterproofing membrane.
<PAGE>

                                       89

     (c)  Waterproofing over the above-mentioned will be carried out by means of
          high standard bituminous sheeting with welded joints or equivalent.

     (d)  According to the requirements and the recommendations of the
          Consultant, additional concrete bases 5 cm thick will be formed on
          parts of the roof, and air conditioning equipment and other
          installations on the roof will be placed on these bases in accordance
          with the Consultant's directives.

8.   Carpentry And Metalwork
     -----------------------

     (a)  Entrance doors to the stairways will be fire resisting building
          standard approved, steel or aluminium or fire-resisting glass with
          hydraulic closer according to the Architect's choice. All the doors in
          the building will be uniform.

     (b)  The number of entrance doors will be calculated on the basis of one
          door to a rental space of 150m/2/ and two doors to a rental area of
          over 150m/2/.

     (c)  The metalwork to the protected spaces at each level will be executed
          in accordance with the requirements and standards of the Civil Defence
          Command.

9.   Sanitary Installation
     ---------------------

     (a)  The water pipework in the building will be steel "" Sekorit"".

     (b)  The waste and drainage pipework will be executed with approved
          materials "Gavrit" or PVC.

     (c)  The drainage system outside the building will conform to the
          requirements of the Local Authority.

     (d)  Fire fighting appliances will be situated throughout the building as
          required by the Fire Fighting Service.
<PAGE>

                                       90

     (e)  At each floor level it will be possible to situate kitchenettes and to
          connect to prepared water supply, drainage and air exhaust
          connections.

     (f)  Preparation for water meter connection will be executed at the central
          meter point outside the tenancy. The Lessee will be responsible for
          ordering the water connection and meter from the Local Authority as
          required. The water meter will be computer read.

     (g)  Changes to the sanitary and fire fighting systems will be carried out
          by the Lessor only.

10.  Sprinklers And Emergency Safety Signs
     -------------------------------------

     (a)  Sprinkler installations will be installed in the parking and public
          areas according to the Consultant's plan and the Fire Fighting
          Service's requirements.

     (b)  The Lessee will install standard safety and emergency signs according
          to the requirements of the Safety Consultant and the authorities.

     (c)  Changes in the sprinkler installations will be performed only by the
          Lessor.

11.  Electricity
     -----------

     (a)  General
          -------

          (1)  The building will be supplied with an electrical connection of a
               capacity as designed, and as approved by the Electric Corp.,
               which will supply the requirements of all the building with
               regard to air conditioning, lifts, lighting etc,

          (2)  The building will receive its electrical connection by means of a
               high voltage bulk meter from the Electric Corp. and therefore,
               will build a transformer station in
<PAGE>

                                       91

               the building area for the possible use of the Electric Corp..

          (3)  Electric supply to Lessees will be carried out by means of a
               private transformer station according to the detailed conditions
               specified in the enclosed appendix for electric supply.

          (4)  An emergency generator unit will be installed for supply to
               emergency systems as laid down by the Electrical System Designer.

          (5)  Light points and fittings will be installed in the entrance hall,
               floor level lobbies, public areas and toilets. Fittings according
               to the choice of the Architect.

          (6)  The parking level will have a lighting system using fluorescent
               lights.

          (7)  The public areas will have socket outlets for general use as
               planned by the Electrical System Designer.

     (b)  Electrical Connection
          ---------------------

          (1)  The Lessor will provide each Lessee with an electrical connection
               of 3 x 25A capacity for each unit of 100m/2/ in area.

          (2)  In the event that the Lessee requests a connection with a larger
               capacity, he will pay the Lessor for the larger connection
               according to the price charged by the Electric Corp. for
               enlarging a low voltage connection.

          (3)  The Lessor undertakes to make enlargement of electrical
               connection possible up to a maximum capacity of 200 watts per
               square meter of rented space.

          (4)  The Lessor will enlarge the capacity of the electrical connection
               above this only in the event that this is possible.
<PAGE>

                                       92

     (c)  Payment For Use Of Electricity
          ------------------------------

          (1)  Electricity supply to tenants will be by means of the private
               meters of the Maintenance Company as specified in the enclosed
               appendix for electricity supply.

          (2)  The tenant will pay for electricity used according to the price
               laid down by the Electricity Company for users of his
               classification.

          (3)  The electricity bill will be sent to the tenant once a month and
               will be paid to the building's Maintenance Company.

12.  Low Voltage Systems
     -------------------

     (a)  Fire And Smoke Detection System
          -------------------------------

          According to the Safety Consultant's directives with the Fire Fighting
          Service's approval.

     (b)  Central Control System
          ----------------------

          The building will have a control system to provide information on the
          state of the various systems at the central desk or at the building
          administration office.

          Alarms will show the situation of the systems and/or the control
          switches according to the following: elevators, air conditioning, car
          park lighting, smoke detection, sprinklers, diesel generator, drainage
          pumps, drainage and water supply and external lighting.

     (c)  Telephone Infrastructure
          ------------------------

          (1)  By means of "Bezeq" or "NSR " services through a communication
               centre according to the Developer's choice.
<PAGE>

                                       93

          (2)  Infrastructure for outside telephone lines will be executed.

          (3)  The Lessee will order and pay the Telephone Company for telephone
               lines.

          (4)  The Lessee will pay telephone bills direct to the Telephone
               Company.

13.  Air-Conditioning
     ----------------

     (a)  A system of cooling towers will be executed in the building which will
          provide condensed water to all areas of the building in accordance
          with the plan of the Air Conditioning Consultant, in addition, air-
          conditioning plant rooms will be designated at each level for the
          systems which will be carried out by the Lessees.

     (b)  All equipment, materials and fittings supplied to the building will be
          good quality of recognised manufacture.

     (c)  A ventilation system will be installed to the parking basements
          according to the instructions of the Safety Consultant and the Air
          Conditioning Planner.

     (d)  Air conditioning system, cooling towers and terminal units will be
          executed to the common areas according to the Developer's decision.

14.  Aluminium
     ---------

     (a)  All the aluminium work in the building will be of standard 1 as
          defined in the General Specification of Building Works. The colour of
          the aluminium will be as chosen by the Architect.

     (b)  Blind frames will be galvanised metal.

     (c)  Curtain walls will be of the manufacture of a known company of
          reputation.
<PAGE>

                                       94

     (d)  All glass will be clear of "Antisun" type or reflective of thicknesses
          as required by the standard and of shade as chosen by the Architect.

     (e)  The ground floor will be carried out with display windows in aluminium
          and glass as above in accordance with the Architect's plan.

15.  Landscaping
     -----------

     (a)  The landscape work will be carried out as the first stage of the
          entire complex of the future park.

     (b)  Flooring will be limestone in conjunction with interlocking paving
          tiles or Grano or equivalent in glass according to the Architect's
          design.

     (c)  The garden areas will be according to the Architect's design including
          a watering system.

     (d)  There will be a system of water pools next to the building.

     (e)  Temporary above ground protected parking will be provided.

     (f)  All, landscaping works, fences, pavements, parking etc will be carried
          out according to the Architect's design and the requirements of the
          authorities.

     (g)  A refuse room including refuse container will be situated at ground
          level.

B.   OFFICE FINISHES
     ---------------

1.   Internal Partitions
     -------------------

     (a)  The partitions at the office and commercial leve ls will be
          plasterboard single membrane filled with 2" thick rockwool.
<PAGE>

                                       95

     (b)  The partition area will be calculated according to 1m/2/ plasterboard
          partition to every 0.75m/2/ rented, the net rented area (the floor
          area of the rental).

2.   Suspended Ceilings
     ------------------

     (a)  Suspended ceilings of modular mineral tiles composed of glasswool or
          fibreglass, 5/8" thick, dimensions 60/60 cm and/or 120/60 cm will be
          installed as a level surface in every unit.

     (b)  Recessed fluorescent light fittings will be installed in all the
          ceilings.

     (c)  Plasterboard aprons will be installed as necessary and only in areas
          were necessitated.

3.   Flooring
     --------

     (a)  Office levels will have wall to wall carpeting including skirtings at
          a base price of $ 12/m/2/, laid on smoothed concrete.

     (b)  Damp areas or areas with heavy traffic will have 30/30 cm ceramic
          tiles including skirtings at base price of $ 12/m/2/ fixed by gluing.

4.   Paint
     -----

     (a)  Painting of walls and ceilings in damp areas: walls in damp areas
          above areas finished with ceramic tiles, if there are such, will be
          painted with coats of "Akrinol" paint or equivalent applied in
          accordance with the manufacturer's instructions.

5.   Carpentry
     ---------

     (a)  Doors to the typical floor areas will be factory made doors filled
          100% in the lower 60 cm and 50% to the remainder. Gross door opening
          width will be 90 cm.
<PAGE>

                                       96

     (b)  The doors will be factory formed with a laminate finish or patterned
          wood according to the Architect's choice.

     (c)  Door furniture will be "Alum" manufacture or equivalent. Each door
          will be fitted with a "Yarden" cylinder lock or equivalent according
          to the Architect's choice.

     (d)  Door frames will be timber or metal with "Polyor" paint finish or
          other according to the Architect's choice.

     (e)  The quantity of doors to office and commercial areas will be
          calculated according to one door to every 27m/2/ net area rented (the
          floor area of the premises).

6.   Electrical Installations And Communications Infrastructure
     ----------------------------------------------------------

     (a)  Lighting
          --------

          (1)  To every 7.5m/2/ rental area (net floor) one light point will be
               provided with a fluorescent fitting 2 x 36w recessed in the
               suspended ceiling of "Bath" type with preparation for a louver.

          (2)  Switches will be of "D.I.G." model.

     (b)  Single-Phase Socket Outlets
          ---------------------------

          (1)  One single-phase socket outlet will be provided to every 7.5m/2/
               (net floor) of rental area.

          (2)  The socket outlets will be of "D.I.G." model.

          (3)  Connection points for air-conditioning units will be according to
               the design of the system.

     (c)  Telephone Infrastructure
          ------------------------

          (1)  One external telephone point will be provided to every 15m/2/
               (net floor) of rental area.
<PAGE>

                                       97

          (2)  Each point will include piping from the point to the floor level
               telephone cupboard with four pole telephone cable.

     (d)  Fuse Boards
          -----------

          (1)  Main and secondary fuse boards will be planned in accordance with
               the requirements of the building and electrical laws and
               standards.

          (2)  All equipment in the electrical fuse boards, including main
               switches, semi-automatic switches and reduction relays will be
               executed in accordance with the Electrical Consultant's plans.

          (3)  The electrical fuse boards will be planned with reserved areas
               which will enable the addition of circuits of 25% above those
               planned.

          (4)  Supply boards for the points detailed in clause 6(b) will be
               installed in each rental unit.

     (e)  Alterations To The Electrical And Communication Installation Requested
          ----------------------------------------------------------------------
          By The Occupants
          ----------------

          (1)  All electrical and communication installations required by the
               Lessees will be executed by the Lessor.

          (2)  The Lessor will plan and execute the electrical and communication
               installations according to the requirements of the Lessee with
               the approval of the Electrical Consultant of the building.

          (3)  The Lessee will pay for the electrical installation in accordance
               with the following principles:

               (a)  Planning
                    --------
<PAGE>

                                       98

                    In accordance with the hourly fee as laid down in the tariff
               of the Israel Engineers and Architects Association.

               (b) Electrical and communications installation
                   ------------------------------------------

                    According to the price list of the Lessor.

7.   Fire-Fighting Systems
     ---------------------

     (a)  Smoke detectors and/or sprinklers will be installed in the rented
          areas according to the Consultant's plan and the authorities'
          requirements.

8.   Air-Conditioning
     ----------------

     (a)  A system of cooling towers will be executed in the building which will
          supply condensed water to all areas of the building in accordance with
          the plan of the Air-Conditioning Consultant. For this purpose, air-
          conditioning rooms will be designated at each level for the system
          which will be installed by the Lessees.

9.   Alterations To The Electrical, Fire-Fighting And Communication  Systems
     -----------------------------------------------------------------------
     Requested By The Occupants
     --------------------------

     (a)  All the installations for the Lessees as above-mentioned will be
          executed by the Lessor.

     (b)  The Lessor will plan and execute the above-mentioned systems according
          to the requirements of the Lessee with the approval of the Electrical
          Consultant of the building.

     (c)  The Lessee will pay for the planning and execution of the
          installations in accordance with the following principles:

          (1)  Planning
               --------

               In accordance with the hourly fee as laid down in the tariff of
               the Israel Engineers and Architects Association.
<PAGE>

                                       99

          (2)  Electrical And Communications Installation
               ------------------------------------------

               According to the Lessor's price list.

NOTE:     Changes to the plans, quantities and technical specifications
according to the requirements of the authorities of the Consultants in
coordination with the Architect.

                  TECHNICAL SPECIFICATION FOR THE EXECUTION OF
                  --------------------------------------------
               FINISHING WORKS - ACCORD VIDEO COMMUNICATIONS LTD
               -------------------------------------------------

                           PARK AZORIM BUILDING NO. 1
                           --------------------------

1.   General
     -------

     This appendix is an addition to the original general attached technical
     appendix. In any case of conflict between the two specifications, this
     specification and quantities will determine the issue.

     (a)  All works will be executed according to the appropriate instructions
          as contained in the General Specification for Building Works published
          by the Inter-Ministerial Committee (the Blue Book).

     (b)  All the works will be executed to a high standard and to the full
          satisfaction of Avi Dayan and subject to the requirements,
          specifications and standards of the various  authorities.

     (c)  All the works will be executed by the Contractor and at its expense
          including supplying and fixing and including:

          -  plasterboard partitions including insulation;

          -  acoustic ceilings in conjunction with recessed fluorescent lighting
             fittings;
<PAGE>

                                      100

          -  carpeting and perimeter carpentry;

          -  complete air-conditioning system;

          -  complete systems for electricity, power, lighting, telephones and
             computer communications - ducts and piping including drawing
             wires at the Contractor's expense. Cables and outlets for
             computers and telephones - at the Company 's expense;

          -  signs and emblems, including direction signs at the entrance level
             to the building and at the floor level itself at the Company's
             expense in collaboration with the Architect of the building;

          -  sprinkler systems, fire and smoke detectors, crisis systems -
             according to the Safety Consultant's requirements, connected to
             the central systems of the building.

     (d)  The Company will be permitted to request changes in the placement of
          partitions, doors and acoustic ceilings before the execution of the
          works. The changes will be executed without additional charge on the
          condition that the changes are notified at least one week prior to
          execution.

     (e)  All the works including those detailed above will be supplied and
          executed at the Contractor's expense without any additional payment by
          the Company.

     (f)  The Company will be permitted to remove work from the Contractor - not
          including air-conditioning, electrical, partitions, doors, ceilings
          and standard carpeting works - and execute the works with the help of
          other Contractors with no payment of profit to the Main Contractor.

     (g)  The Contractor will hand over the floor to the Company at the agreed
          time completely finished and ready for immediate use.
<PAGE>

                                      101

     (h)  Two weeks before the hand-over of the floor, minutes for the receipt
          of the works will be drawn up by Avi Dayan detailing the immediate
          repairs and completions of work required to be carried out by the
          Contractor before the hand-over of the floor according to the
          agreement.

2.   Details of Works
     ----------------

     (1)  Carpets - Supplying and gluing.
          -------

                    Woven hard wearing carpet according to the Israeli and
          European standard including compliance with the standard, the Fire
          Fighting Service's requirements anti static polyphrene, abrasion
          resistant, stain resistant, base price for carpet only $ 17/m/2/.

                    The carpet will be glued to a smooth surface, including sewn
          skirtings, thresholds etc. Colour according to Avi Dayan's selection.

                    In the event that the Company decides on this type of
          carpet, no additional price will be paid.

                    In the event that the Company decides on another type of
          carpet to part of the area or to the total area, the base price of $
          17/m/2/ will be deducted from the cost of the carpet only. The
          complete works of installing and gluing the carpet including
          thresholds, sewing, skirtings etc. will be carried out by the
          Contractor without payment.

     (2)  Walls -   Supply and fixing complete according to the plans of Avi
          -----
          Dayan (including curved walls).

          (a)  Plasterboard walls will include 2 layers of reinforced
               plasterboard boards resistant to loads and fire of a thickness of
               10 mm each with compressed rockwool acoustic insulation between
               them combined with panels of glass 6 mm thick minimum (the
               quantity will be limited according to the agreed drawings).
<PAGE>

                                      102

          (b)  In the office of the general manager, the conference room, and
               likewise 6 managers offices, special walls will be installed as
               follows: two double layers of plasterboard on each side of the
               wall together with double compressed rockwool acoustic insulation
               2" thick with a weight of 80 kg/m/3/.

               All the walls will be installed from the concrete floor, by means
               of rubber strips, until the concrete, ceiling and the inside of
               the concrete recesses, including filling and smoothing and paint
               of colours as chosen by Avi Dayan.

     (3)  Doors -  Supply and fixing complete according to the plans of Avi
          -----
          Dayan.

          (a)  The doors will have timber filling of 60% minimum and will be
               faced with "Fornir" laminate on both sides. Door handles
               "Marissah" 800 FBA nickel finish.

               The doors to the rooms with the acoustic insulation will have
               100% filling.

               Timber frame painted with toned varnish or "Polyor" paint
               including filling and smoothing. All doors will have handles and
               cylinder locks designed for one master key.

          (b)  Glass door of "Sekorit" type, including floor recessed hydraulic
               door closer, including preparation for electrical locking and
               intercom system with buzzer through the telephone system of the
               Company, of dimensions 120/220. The door will be combined with an
               installation of glazed aluminium to the total width of the
               entrance halls from the elevator area (on the third floor
               provided that the whole floor is rented by the Lessee).

4.   Acoustic Ceilings - Supply and Fixing
     -----------------

     (a)  Modular mineral panels, typical panel size 60/60 15 mm thick, finished
          with profiles Z + L type and pattern of panels according to Avi Dayan.
<PAGE>

                                      103

          The ceilings will include fluorescent lighting fittings 4 x 18w with
          parabolic aluminium diffusers against glare.

          Recessed light fittings P.L. 2 x 18W or halogen 50w with coloured
          glass (corridors, public areas, conference room and likewise).

          The Contractor will supply and fix at his expense a level of lighting
          of 600 lux and not less than 4 double fluorescent light fittings in
          each room.

          In the event that the Company decides on a special decorative
          plasterboard ceiling to the entrance hall and conference room, the
          Contractor will supply and execute these at his expense at a price not
          more than $ 100/m/2/.

5.   Painting And Wallpapering
     -------------------------

     The plasterboard walls, block and columns, will be painted with a
     "Superkrete" paint to full coverage.

     Frames will be painted with "Polyor" paint or toned varnish.

     The tones will be decided by Avi Dayan.

6.   Air-Conditioning Installation
     -----------------------------

     Supply and fixing complete operating air-conditioning installation in all
     areas and rooms of the floor level including heating, cooling and fresh
     air, with all preparations and essential elements, including coordination
     with the plans by the Air-Conditioning Consultant at the Contractor's
     expense. Separate thermostats to each room and a complete general operating
     system.

7.   Electrical Installation
     -----------------------

     Supply and fixing complete operating electrical installation and lighting
     including all the elements - main switchboard, secondary switchboards, 630
     amp supply, piping including wiring, fittings,
<PAGE>

                                      104

     outlets, all below the plaster and in wall voids,. the plasterboard and the
     ceilings. Complete lighting installation, including switches and emergency
     lighting, to a level of 600 lux minimum.

     Power point system.

     Telephone system including pipework and distribution boxes. Conduits and
     pipework + withdrawing wire not including wiring and fittings.

     Computer communication system finished and complete in accordance with the
     standards according to the requirements of the Safety Consultant. The
     fixing of the outlets and cables of the computer communication system and
     the telephones will be executed by the Company at its expense. The colour,
     quantity and location of all the fittings will be in accordance with the
     plans of Avi Dayan and will be adapted to the execution plan of the
     Electrical Consultant of the building at the Contractor's expense.

     The number of points which will be executed at the Contractor's expense in
     accordance with the plan of Avi Dayan.

     In one place the socket outlets will be executed in the concrete floor.

8.   Plumbing Installations
     ----------------------

     Sprinkler system complete in accordance with the laws and standards,
     perfect and operating including everything necessary according to the
     requirements of the Safety Consultant.

     3 kitchens, in each kitchen: 2.0 metres of lower cupboards and 2.0 metres
     of upper cupboards, worktop, "Kaissar" marble, "Mixomat" taps worktop
     mounted, ceramic floor finish and to all the walls, fireclay sink 60/40
     complete with all fittings, water, drainage, all connections, operating and
     ready for use.

                     SHAPIRA HAHN CONSULTING ENGINEERS LTD

                              93 Jabotinsky Street
                                Ramat Gan 52553
<PAGE>

                                      105

11/1/99
1973/42103

To - N.T.M. Properties
     Rivel 26
     Tel Aviv 67778

For the attention of Mr Jonathan Steinberg

Dear Sir,

                       Air-Conditioning To Accord's Area
                           Park Azorim, Petach Tikva
                           -------------------------

We present the technical specification as follows:

The air-conditioning system in the project is based on the water source heat
pump system. Every user and every room will receive an independent air-
conditioning unit which will be connected to the cooling tower water coming from
the roof. Each unit will be provided with an electrical heating element as back-
up to the heat pump system.

The energy center  will be located on the roof including cooling towers, water
pumps and suction exhausts for the ventilation of the toilets and kitchenettes.

Accord will receive from the building:

1.   Condensation water from the energy center  to the floor entrance.

2.   Toilet ventilation ducts reaching the floor and to the floor entrance.

     The systems in the floor area will be executed according to Accord's plans.

Climate Conditions
------------------

Summer - 23* Celsius with an accuracy of 1* +
                                            -
Winter - 21* Celsius with an accuracy of 1* +
                                            -
<PAGE>

                                      106

There will be no control over the relative humidity.

The cooling loading required to the two floors is about 106 tons of cooling and
the energy center  must supply condensed water to suit this loading.

The energy center  must supply condensed water to enable the Company to have
air-conditioning 24 hours of the day during all the days of the year.

Yours faithfully,

Shapira Hahn
                             R. COHEN & ASSOCIATES

             Consultant Engineers For Electricity & Automation Ltd

To - Engineer Jonathan Steinberg
     General Manager N.T.M. Properties
     Via fax no. 03-6889533

17th January 1999

Dear Sir,

                    Accord Video - Park Azorim, Petach Tikva
                    ----------------------------------------

Quantities according to Avi Dayan's plans.

1.   Light Fittings
     --------------

     This section includes:

     1.1  Square parabolic light fittings 60/60 cm 4 x 18W for room lighting.

     1.2  Circular light fittings for PL fluorescent tubes to corridors,
          conference rooms etc.
<PAGE>

                                      107

     1.3  Halogen light fittings for decorative lighting in conference rooms,
          executive rooms etc.

     1.4  The total of this section - approx. 68O light fittings.
          -------------------------------------------------------

2.   Terminal Fittings / Workstations
     --------------------------------

     This section includes:

     2.1  Grouped connectors for various work stations according to the
          directives received from Accord Video. The fittings to the above
          stations will be CIMA manufacture and will be Gewiss type.

     2.2  Single terminal fittings to wall outlets, telephone, computers etc.

     2.3  The total of this section - 290 grouped work outlets; 1000 single
          -----------------------------------------------------------------
          terminal fittings
          -----------------

3.   Outlet Points  (Fittings Included In Sections 1, 2, 4, 6, 7 and 8)
     ------------------------------------------------------------------

     This section includes:

     3.1  Execution of points (not including grouped connectors - terminal
          units) to electricity.

     3.2  Execution of points (not including grouped connectors - terminal units
          45-RJ) to communications and telephone.

     3.3  Execution of points (not including grouped connectors - terminal units
          45-RJ) to computers.

     3.4  Execution of points (not including grouped connectors - terminal
          units) to detection/fire fighting.

     3.5  Execution of points (not including grouped connectors - terminal
          units) for break-in system.
<PAGE>

                                      108

     3.6  Execution of points (not including grouped connectors - terminal
          points) to public address system.

     3.7  Execution of points (not including fittings) to lighting.

     3.8  The total of this section - 2400 terminal points
          ------------------------------------------------

4.   Public Address System
     ---------------------

     This section includes:

     4.1  8 loudspeakers (emergency announcements).

     4.2  Wiring of the system complete.

     4.3  Connection to the public address system of the building.

     4.4  Supply and fitting amplifier - additional to the installation in the
          building.

     4.5  The total of this section - 60 loudspeakers
          -------------------------------------------

5.   Electric Fuse Boards
     --------------------

     This section includes:

     5.1  Main fuse board.

     5.2  Secondary floor level fuse boards.

     5.3  Computer room fuse board /UPS (not including UPS).

     5.4  Laboratory fuse board.

6.   Detection System / Fire-Fighting/Smoke
     --------------------------------------

     This section includes:

     6.1  Detection/fire-fighting/smoke in the fuse boards (over 63 amp.).
<PAGE>

                                      109

     6.2  Floorfire detection according to the Safety Consultant's instructions.

     6.3  Terminal fittings.

     6.4  Wiring the installation.

     6.5  The total of this section - 30 detection/fire-fighting points
          -------------------------------------------------------------

7.   Focal Door Opening Installation
     -------------------------------

     7.1  Terminal fittings.

     7.2  Wiring installation.

     7.3  Designated for 2-3 doors (preparation only).

8.   Anti Break-In System
     --------------------

     This section includes:

     8.1  Terminal points (such as: magnets and space detectors).

     8.2  Wiring installation

     8.3  The total of this section - 20 anti burglary points (preparation
          ---------------------------------------------------
          only).

9.   The size of the required electrical connection is - 630 amp.

10.  Please note, the quantities given above are preliminary and do not include
     the requirements of other Consultants (air-conditioning, plumbing, safety
     and the like). The quantities have been prepared according to preliminary
     drawings only without detailed planning.

Yours faithfully,

Moshe Reuveni
<PAGE>

                                      110

Copies:   Architect Avi Dayan - by fax no. 03-5271839
<PAGE>

                                      111

                                    ANNEX D

[Section 36.6 of the lease makes the provision of Annex D, Operational
Regulations, discretionary at the option of either party. Neither party has
elected to implement any operational regulations, and for that reason, the lease
does not have an Annex D.]

<PAGE>

                                       112

                                    ANNEX E
                                    -------
                    Autonomous Unconditional Bank Guarantee
                    ---------------------------------------
                                (Paragraph 43)
                                 ------------

                                                             Date : ____________
To
Azorei Mallal Industries Ltd.
-----------------------------

Dear Sir

     Re: Letter of Guarantee No.      to Agreement with
         --------------------------------------------------------

We hereby guarantee in your favour to discharge any amount demanded from us up
to the inclusive sum of 500,000 New Israeli Shekels (five hundred thousand NIS)
                        -------                      -------------------------
(hereinafter: "the Guaranteed Capital") together with linkage differentials as
set out hereunder, due or which shall become due to you from Accord (hereinafter
                                                             ------
called: "the Debtor").

We shall pay to you from time to time, within one week of receipt of your
written demand, any amount of the Guaranteed Capital as indicated in your
foregoing demand, together with linkage differentials, the computation of which
shall be made as hereunder, without your having to found your demand in any
manner or form whatever and/or to demand in the first instance the discharge of
the aforesaid amount from the Debtor, provided that the inclusive amount payable
by us to you under this our Guarantee shall not exceed the Guaranteed Capital
together with linkage  differentials.

With respect to this Guarantee:
------------------------------

Index -         means the Consumer Price Index, including vegetables and fruit,
-----           as published by the Central Bureau of Statistics. Should the
                base of the Index be replaced or should the method of
                computation and preparation thereof be changed or should it be
                published by another entity in place of the aforesaid Bureau,
                the Bank shall make the computation of the rise of the Index for
                the purposes of this clause, with regard to the foregoing
                changes.

Base Index -    the Index as published on 15/th/ April 1999, that is to say,
----------      163.9497 points.

New Index -     the last Index as known on the date of receipt of your demand.
---------
<PAGE>

                                       113

Linkage           the difference between the New Index and the Base Index,
Differentials -   divided by the Base Index and multiplied by the Guaranteed
---------------   Capital

This Guarantee is not conditional upon the validity of the Debtor's liability to
you.

This Guarantee shall remain in force until _____________ inclusive. Any demand
in pursuance of this Guarantee is required to be in writing and to reach the
address: _______________. Any demand arriving after the aforesaid date shall
not be acceded to.

This our Guarantee is not capable of assignment or transfer.

                                                  Yours faithfully

                                                  _____________
<PAGE>

                                       114

                                    ANNEX F
                                    -------

                        Non-Negotiable Promissory Note
                        ------------------------------

                               (Paragraph 43.2)
                                --------------

1.   As security for the fulfilment of the Lessee's obligations in pursuance of
     this Agreement the Lessee shall deliver to the Company at the time of
     signature of this Agreement a Promissory Note under its signature in the
     sum of NIS 395,000 (three hundred and ninety five thousand new Israeli
     shekels), linked to the Index as set forth in paragraph 46.1 above
     (heretofore and hereinafter: "the Note" and/or "the Collateral").

2.   The Promissory Note shall be in accordance with the form attached as
     Schedule 1 to this Annex.

3.   The Lessee hereby declares and agrees that without derogating from the
     provisions of the Collateral, the full force of the Collateral shall not
     lapse, including the Company's right to the realisation thereof in whole or
     in part, by reason of any claim or right available to the Lessee under the
     provisions of this Agreement, since it is final, definite, absolutely
     autonomous, not capable of alteration, of being made conditional, of being
     set off, mortgaged, attached or seized, for any reason whatsoever.

4.   Should the Lessee breach any of the conditions of this Agreement and should
     written notice thereof be delivered to it and should the Lessee fail to
     remedy such breach as soon as may be after receipt of such notice, the
     Company shall be entitled, inter alia: to realise the Note, to complete
     the same, to recover the payments or amounts due to the Company under any
     of the provisions of this Agreement without being required to give notice
     to the Lessee as to its intention to carry out any of the foregoing acts.

5.   For the avoidance of doubt it is hereby expressed that the furnishing of
     the Collateral referred to in this paragraph shall not in any manner be
     construed as derogating from the Company's right to sue for additional sums
     of money and/or to recover its costs in any manner whatsoever.

6.   All the costs and/or payments and/or commissions arising from the issue of
     the Collateral under this paragraph, shall be due and payable by the
     Lessee.

7.   The Promissory Note shall be returned to the Lessee upon deposit by the
     Lessee of the Bank Guarantee with the Company as set forth in paragraph 43
<PAGE>

                                       115

     of the Agreement.
<PAGE>

                                       116

                             SCHEDULE 1 TO ANNEX F
                             ---------------------

                            Form of Promissory Note
                            -----------------------

                               (paragraph 43.2)
                                --------------

                    No. __________ dated 25/th/ April 1999

We the undersigned hereby undertake to pay to Azorei Mallal Industries Ltd. or
its order on ____________ the sum of NIS 395,000 (three hundred and ninety five
thousand new Israeli shekels).

Place of Payment: Bank _________ Branch _________ Account No.

The amount of this Promissory Note is linked to the Consumer Price Index
(hereinafter : "the Index") as published by the Central Bureau of Statistics
and/or any other authorised entity in replacement thereof, under the following
conditions of linkage:

"Consumer Price Index" - the Index, including vegetables and fruit, as published
 --------------------
from time to time by the Central Bureau of Statistics and/or any other
authorised entity in replacement thereof.

"Base Index" - in this Promissory Note, means - the Index for the month of March
 ----------
1999 as published on 15/th/ April 1999, 163.9497 points.
                                        --------

"Effective Index" - in this Promissory Note, means - the last Index as is known
 ---------------
on the date of actual payment of this Promissory Note.

Should as at the date of payment of this Note the Effective Index be higher or
lower than the Base Index, we shall pay the amount of this Note, increased or
reduced in proportion to the rate of rise or decline of the Effective Index in
contrast to the Base Index (hereinafter: "the Revised Index").

Should this Note not be paid in full on the payment date, such amounts as have
not been paid shall bear interest at the maximum rate applied to current loan
accounts with Bank Leumi L'Israel Ltd. on unauthorised overdrafts, calculated
daily from the payment date to the date of actual payment, as well as the
addition to the linked and interest bearing amount of this Promissory Note, as
set forth above, of all the costs and payments of every kind whatsoever,
including any duty, levy, tax, commission and service charges associated with
the non payment in full of the Note on the payment date (hereinafter: "the
Costs"). The beneficiary under this Promissory Note
<PAGE>

                                       117

is released from all the duties imposed on the holder of the Note, save for
presentation for payment, protest, notice of dishonour.

Maker of the Note:    Accord Networks Ltd.
-----------------
                      Private Company Registration No. 51-1683765
                                                       ----------
                      22 Hayetzira Street, Kiryat Arieh, Petah Tikva.

Signature: _______________
<PAGE>

                                       118

                                                   AZOREI MALLAL INDUSTRIES LTD.
                                                    Tel Aviv - 25/th/ April 1999

To
Accord Networks Ltd.
--------------------

                  re: Works in Building No. 1 at Park Azorim
                      --------------------------------------

Further to our signature on 25/th/ April 1999 on the Lease Agreement for the
lease of areas in Building No. 1 at Park Azorim (hereinafter: "the Agreement"),
this serves to confirm that in addition to the provisions of the Technical
Specification attached as Annex C to the Agreement, we will participate at our
expense in the execution of additional works on the Premises as defined in the
Agreement, whether carried out by us or by you after our approval, provided that
the sum total of the aforesaid participation does not exceed an amount in New
Israeli Shekels equal to $ 10,000 (Ten Thousand United States Dollars) in
accordance with the rate thereof as at the date of signature of the Agreement.

Should the works be executed by you, our participation shall be against and on
the basis of tax invoices issued to suppliers and service providers arising out
of the additional works on the Premises as set out above, up to the inclusive
sum of $ 10,000 as set out above.

                                                    Yours faithfully,

                                               Azorim Mallal Industries Ltd.
                                               -----------------------------

                                                          "signed"
                                               Azorim Mallal Industries Ltd.<PAGE>

                                                                   EXHIBIT 10.16

January 26, 2000

Via Facsimile (978) 292-3338
And Certified Mail
Return Receipt Requested

Mr. Robert Kellegrew
PictureTel Corporation
100 Minuteman Road
Andover, MA 01810

Re:  Product Distribution Agreement between Accord Networks, Inc. & PictureTel
     Corporation, dated January 21, 2000 ("Agreement")

Dear Bob:

This letter will confirm PictureTel and Accord's agreement with regard to open
issues in the above referenced Agreement.

In the event that PictureTel and Accord are unable to resolve any one of the
open issues referenced in the Agreement within the thirty (30) days allotted to
resolve such open issues, either party may terminate the Agreement by written
notice without any liability, except for the payments of amounts then due and
owing the other party.

Should the above meet with your approval please sign and date below to indicate
your agreement, and fax back to the attention of Adam Vexler at (770) 261-3636.

Sincerely,

/s/ Adam D. Vexler
------------------
Adam D. Vexler
Corporate Counsel

Agreed & Acknowledged By:

/s/ W. Robert Kellegrew, Jr.
----------------------------

W. Robert Kellegrew, Jr. - General Counsel
------------------------------------------
Printed Name & Title

1/26/00
-------
Date

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