Document:

Exhibit 10.1 

SUPPLY AGREEMENT 

This Supply Agreement (this
“Agreement”) is made and entered into as of May 30, 2007 (the
“Effective Date”), by and between [Confidential treatment requested
— the omitted information has been filed separately with the Securities and Exchange
Commission], with offices at [Confidential treatment requested — the omitted
information has been filed separately with the Securities and Exchange Commission]
(“Seller”), and Security With Advanced Technology, Inc., a Colorado
corporation, with offices at 10855 Dover Street, Suite 1000, Westminster, Colorado
80021-3936 (“Buyer”). 

Recitals  

Whereas, Buyer wishes to
purchase from Seller, and Seller wishes to sell to Buyer, certain [Confidential treatment
requested — the omitted information has been filed separately with the Securities and
Exchange Commission], such sales and purchases to be implemented on the terms and
conditions set forth in this Agreement. 

Now, Therefore, Seller and
Buyer agree as follows: 

	1.	TERM;
TERMINATION 

	a) 	This
Agreement shall commence on the Effective Date and shall remain in force
               and effect (the “Term”) until the earlier of (i) the
fourth                anniversary of the Effective Date, (ii) [Confidential treatment
requested —               the omitted information has been filed separately with the
Securities and                Exchange Commission], and (iii) the earlier termination of
this Agreement                pursuant to Section 1.b).  

	b) 	Either
party may terminate this Agreement upon giving the other party notice of
               an event of default (“Event of Default”), which will
exist with                respect to a party if:  

	 	(i)  	a
decree or order is made by a court having jurisdiction over such party
               adjudging it to be a bankrupt under applicable law;  

	 	(ii)  	a
decree or order is made by a court having jurisdiction over such party
               appointing a receiver, or receiver-manager, who is not bound by the terms
of                this Agreement, or a liquidator or trustee or assignee in bankruptcy of
such                party or of its property, or directing the winding-up or liquidation
of its                affairs;  

	 	(iii)  	any
other decree or order has been made by a court of competent jurisdiction by
               which such party is deprived of the right to manage its undertakings and
has                remained in force undischarged and unstayed for 45 business days;  

	 	(iv)  	if
such party:  

	 	A.  	institutes
proceedings to be adjudicated a voluntary bankrupt; 

	 	B.  	consents
to                the filing of a bankruptcy proceeding against it;  

	 	C.  	consents
to the appointment of a receiver, liquidator or trustee or assignee in
               bankruptcy or insolvency of itself or its property; or  

	 	D.  	makes
an assignment for the benefit of creditors, or admits in writing its
               inability to pay its debts generally as they become due.  

          	 	(v) 	
               such party has committed a material default in the performance of its
               obligations under this Agreement, written notice has been given to such party
               specifying such default and declaring the intention of the other party to
               exercise its right to terminate this Agreement if the default is not duly
               remedied, and 

               

	 	A.  	more
than 15 business days have elapsed since the expiration of such period
               following the giving of such notice and such default remains unremedied,
or  

	 	B.  	in
case of a default that is not capable of being remedied, by the exercise of
               reasonable diligence within the period described in Section 1.(b.)(v)A.,
the                earlier of  

	 	I)  	the
day on which the party fails or refuses to act diligently to remedy the
               default, and  

	 	II)  	the
day on which it becomes evident to the other party, acting reasonably, that
               such default could not be remedied in a reasonably timely manner
regardless of                the actions to be taken by such party.  

	c) 	In
the event this Agreement is terminated by Buyer due to an Event of Default
               caused by Seller, the remaining Escrow Amount (as defined herein), if any,
shall                be returned to Buyer in accordance with the terms of the Escrow
Agreement (as                defined herein). In the event this Agreement is terminated
by Seller due to an                Event of Default caused by Buyer, the remaining Escrow
Amount (as defined                herein), if any, shall be paid to Seller as liquidated
damages in accordance                with the terms of the Escrow Agreement (as defined
herein).  

	2.	PRODUCTS 

The product covered by this Agreement
shall be [Confidential treatment requested — the omitted information has been filed
separately with the Securities and Exchange Commission] (“Product”).
Parties agree that Buyer [Confidential treatment requested — the omitted information
has been filed separately with the Securities and Exchange Commission]. 

Buyer shall maintain at least a
[Confidential treatment requested — the omitted information has been filed separately
with the Securities and Exchange Commission] supply of [Confidential treatment requested
— the omitted information has been filed separately with the Securities and Exchange
Commission] at Seller’s plant. Seller shall notify Buyer at least monthly as to the
quantity of [Confidential treatment requested — the omitted information has been
filed separately with the Securities and Exchange Commission] in inventory at
Seller’s plant. 

	3.	PRODUCT
QUANTITY FORECASTING; PRICING; EXCLUSIVE ARRANGEMENT 

	a) 	During
the Term, Seller agrees to sell to Buyer, and Buyer agrees to buy from
               Seller, Product upon the terms set forth in this Agreement.  

	b) 	During
the Term, Buyer will provide Seller with purchase orders for Product
               [Confidential treatment requested — the omitted information has been
filed                separately with the Securities and Exchange Commission] in advance,
with the                initial [Confidential treatment requested — the omitted
information has                been filed separately with the Securities and Exchange
Commission] purchase                orders and pricing of Product set forth on Exhibit
A attached hereto. The                purchase orders shall be issued every 60 days,
beginning 10 days from the                Effective Date. All purchase orders of Buyer
shall be deemed to incorporate the                terms of this Agreement. The purchase
orders issued by Buyer shall not modify or                alter the terms of this
Agreement [Confidential treatment requested — the                omitted information
has been filed separately with the Securities and Exchange                Commission]
without the written consent of Seller. Purchase orders also shall                not be
cancelled, revoked, delayed or reduced by Buyer unless consented to in
               writing by Seller; provided, however, that all unfilled purchase orders
shall be                cancelled on the date of termination of this Agreement pursuant
to Section 1(a).                Purchase orders shall not exceed [Confidential treatment
requested — the                omitted information has been filed separately with
the Securities and Exchange                Commission], without Seller’s written
consent. [Confidential treatment                requested — the omitted information
has been filed separately with the                Securities and Exchange Commission]  

	c) 	[Confidential
treatment requested — the omitted information has been filed
               separately with the Securities and Exchange Commission]. If Seller fails
to                fulfill any purchase order within ninety (90) days of its requested
delivery                date, Seller shall be deemed to have materially breached this
Agreement (and                such default shall not be entitled to any cure period by
Seller under Section                1(b)).  

	4.  	DELIVERY;
TITLE  

[Confidential treatment requested
— the omitted information has been filed separately with the Securities and Exchange
Commission]. Notice pursuant to this paragraph may be served by Seller via email or fax as
provided to in Exhibit C (or at such other email address as is provided by Buyer to Seller
from time to time) and not otherwise subject to the terms of paragraph 15. 

	5.  	TAXES  

Taxes, duties or other charges of any
nature imposed by any governmental authority that become payable by reason of a sale or
delivery of Product under this Agreement will be paid by Buyer. 

	6.	QUALITY;
WARRANTY 

	a) 	Seller
warrants that Product purchased hereunder [Confidential treatment
               requested — the omitted information has been filed separately with
the                Securities and Exchange Commission] shall conform to the
specifications set                forth on Exhibit B.  

	b) 	In
the event that 2% or more of any Product shipment received by Buyer at any
               time fails to conform to the specifications set forth on Exhibit B,
Buyer                shall promptly notify Seller and Seller shall replace or credit
Buyer for any                and all defective Product. If Seller fails to cure material
defects within 60                days of such notice, Seller shall be deemed to have
materially breached this                Agreement (and such default shall not be entitled
to any cure period by Seller                under Section 1.(b.)).  

	c) 	Notwithstanding
any provision of this Agreement to the contrary, the Seller                warranty
contained in Section 6(a) is the only warranty extended by Seller in
               connection with the Products and such warranty shall be extended to Buyer
only                and not to any successive buyers, users, third parties or employees
and is in                lieu of all other warranties, express or implied, including
warranties of                merchantability and fitness for a particular purpose.  

	7.	PAYMENT
TERMS; ESCROW 

	a) 	Within
three days of the Effective Date, Buyer shall deposit $1,000,000 in cash or in the
form of an                irrevocable letter of credit (the “Escrow Amount”)
into an                escrow account maintained by [Confidential treatment requested
— the                omitted information has been filed separately with the
Securities and Exchange                Commission], as escrow agent (“Escrow Agent”),
pursuant to an                Escrow Agreement in the form attached hereto as Exhibit C (the
               “Escrow Agreement”).  

	b)	         Payments
for Product purchased by Buyer shall be made as follows:  

	 	(i)  	50%
of the purchase price shall be paid to Buyer from the Escrow Amount upon
          shipment of such Product and the remaining 50% of the purchase price shall be
          paid on a net 30-day basis from the date of shipment.  

	 	(ii)  	Upon
the exhaustion of the Escrow Amount, Buyer shall then pay 100% of the           purchase
price on a net 30-day basis from the date of shipment, subject to Buyer
          maintaining a satisfactory credit profile. Credit terms may be withdrawn or
          revised, if in Seller’s reasonable discretion, Buyer is or becomes a
credit           risk.  

	c) 	[Confidential
treatment requested — the omitted information has been filed
               separately with the Securities and Exchange Commission]. In the event this
               Agreement is terminated upon the expiration of the Term, the remaining
Escrow                Amount, if any, shall be paid to Seller.  

	d) 	In
the event that amounts due to Seller are not paid when due, then the unpaid
               balance shall accrue interest at the rate of 1% per month until paid.
Invoices                of Seller for Products shall bear interest as provided above if
not paid within                30 days of the date of invoice [Confidential treatment
requested — the                omitted information has been filed separately with
the Securities and Exchange                Commission].  

	8.  	PERMITS
AND LICENSES  

Buyer will be solely responsible for
obtaining any permits and licenses and preparing any necessary paperwork for the export
and import of Product to Buyer’s location. 

	9.  	INDEMNITY  

Buyer will, at its expense, defend,
indemnify and hold Seller and its Affiliates (as defined below), employees and agents
harmless from any and all Loss incurred [Confidential treatment requested — the
omitted information has been filed separately with the Securities and Exchange
Commission]. 

“Loss” means any liability,
demand, claim, action, cause of action, cost, damage, deficiency, penalty, fine or other
loss or expense, including all interest, penalties, reasonable attorneys’ fees and
expenses and all amounts paid or incurred in connection with any action, demand,
proceeding, investigation or claim. “Loss” shall not include any indirect,
punitive or consequential damages, including, without limitation, lost profits. 

	10.  	INDEPENDENT
CONTRACTOR  

This Agreement shall not constitute
or give rise to a partnership, joint venture or other affiliation between the parties. All
activities of Seller under the terms of this Agreement shall be carried on by Seller as an
independent contractor and not as an agent for Buyer. Seller shall have no right to
obligate or bind Buyer in any manner, and Seller agrees not to make any representation to
any person to the contrary. 

	11.  	GOVERNING
LAW; JURISDICTION  

THIS AGREEMENT WILL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
(REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF
VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES. 

	12.  	NON-WAIVER  

The failure of either party to insist
in any one or more instances upon strict performance of any of the provisions of this
Agreement or to take advantage of any of its rights hereunder shall not be construed as a
waiver of any such provisions or the relinquishment of any such rights, but the same shall
continue and remain in full force and effect. 

	13.  	NO
THIRD PARTY BENEFICIARIES  

This Agreement is solely for the
benefit of Buyer, and its successors and permitted assigns, with respect to the
obligations of Seller under this Agreement, and for the benefit of Seller, and its
respective successors and permitted assigns, with respect to the obligations of Buyer
under this Agreement, and this Agreement shall not be deemed to confer upon or give to any
other third party any remedy, claim liability, reimbursement, cause of action or other
right. 

	14.  	ASSIGNMENT  

This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned, directly or
indirectly, including, without limitation, by operation of law, by any party hereto
without the prior written consent of the other party hereto, which consent shall not be
unreasonably withheld, except that, in any case, the assignee shall assume in writing the
obligations of the assigning party. 

	15.  	NOTICES  

All notices, requests, demands,
waivers and other communications required or permitted to be given under this Agreement
shall be in writing and may be given by any of the following methods: a) personal
delivery, or b) overnight delivery service. Notices shall be sent to the appropriate party
at its address given below (or at such other address for such party as shall be specified
by notice given hereunder): 

		
	If to Seller to:

                  

                  

                  

                  

                  

If to Buyer to:

                  

                  

                  

                  

                  

                  

                  

                  

                  

                  

                  
	

[Confidential treatment requested - the omitted information has been filed separately with the Securities

and Exchange Commission]

with a copy to:

[Confidential treatment requested - the omitted information has been filed separately with the Securities

and Exchange Commission]

Security With Advanced Technology, Inc.

10855 Dover Street, Suite 1000

Westminster, Colorado  80021-3936

Fax No.:  (303) 439-0414

Attention:  Jeffrey G. McGonegal

with a copy to:

Brownstein Hyatt Farber Schreck, P.C.

410 Seventeenth Street, Suite 2200

Denver, Colorado  80202

Fax No.: (303) 223-1111

Attention: Adam J. Agron

All such notices, requests, demands,
waivers and communications shall be deemed received i) in the case of personal delivery,
upon actual receipt thereof by the addressee, or ii) in the case of overnight delivery, on
the business day following delivery to the overnight delivery service. 

	16.  	CONFIDENTIAL
INFORMATION  

Except as provided below, all
information disclosed between the parties pursuant to, or relating to any provision of,
this Agreement, including information relating to third parties (including Buyer’s
customers), is deemed confidential (“Confidential Information”). A party
receiving Confidential Information (the “Receiving Party”) will not use
such information for any purpose other than for which it was disclosed and shall prevent
the disclosure to third parties of any and all Confidential Information provided that the
Receiving Party’s obligation hereunder shall not apply to information that: 

	a)	       is
already in the Receiving Party’s possession at the time of disclosure
          thereof;  

	b)	is
or subsequently becomes part of the public domain through no action of the
          Receiving Party;  

	c) 	is
subsequently received by the Receiving Party from a third party having no
               obligation of confidentiality to the party disclosing the confidential
               information;  

	d) 	is
disclosed to third parties as required by law; or  

	e) 	is
delivered to customers of Buyer’s business in the context of
               understanding the nature of the sale of the business; provided that, such
               communication to customers may not occur without the prior written consent
of                Seller.  

	17.	INSURANCE 

Buyer shall within 45 days of the
Effective Date of this Agreement or upon first shipment of the Products by Buyer to its
customers, (whichever shall first occur) obtain and maintain during the Term of this
Agreement and for six years thereafter, at its own expense, Products Liability/Completed
Operations insurance, to cover any product defect or liability, with a minimum and
aggregate limit of $2,000,000. Such insurance will carry a deductible not to exceed
$50,000. Buyer shall cause the insurance company issuing such policy to issue a
certificate to Seller which (i) confirms that such policies have been issued and are in
full force and effect providing coverage of Seller as required by this paragraph; (ii)
states the amount of the deductible for each such policy; and (iii) confirms that before
any cancellation or material change in coverage of any such policy, the insurance company
shall give Seller thirty (30) days prior written notice of such proposed cancellation or
material change. Such insurance company shall have a rating of at least [A-:IX],
as published by Best’s Insurance Reports. Buyer shall name Seller as an additional
insured under such insurance policies.  

	18.  	ENTIRE
AGREEMENT  

This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the parties or
any of them with respect to the subject matter hereof. This Agreement may not be amended
except by an instrument in writing signed on behalf of all the parties hereto. Any
agreement on the part of a party hereto to any extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. 

	19.  	SEVERABILITY  

Should any provision of this
Agreement for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any of the other provisions of this Agreement,
which remaining provisions shall remain in full force and effect and the application of
such invalid or unenforceable provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall be valid and enforced to the fullest
extent permitted by law. 

	20.  	COUNTERPARTS  

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

	21.  	ARBITRATION  

     	a)	
          All disputes and controversies of every kind and nature between the parties
          hereto arising out of or in connection with this Agreement as to the existence,
          construction, validity, interpretation or meaning, performance, non-performance,
          enforcement, operation, breach, continuance, or termination thereof shall be
          submitted to arbitration pursuant to the following procedure: 

          

	 	(i)  	Either
party may demand arbitration after a controversy arises, which                arbitration
shall be submitted to, and conducted under the auspices of the                American
Arbitration Association, by a panel of three (3) Arbitrators (one of                whom
shall be selected by Seller, one of whom shall be selected by Buyer and the
               third shall be selected by mutual agreement of the arbitrators so
selected).  

	 	(ii)  	Each
party shall bear its own arbitration costs and expenses.  

	 	(iii)  	The
arbitration hearing [Confidential treatment requested — the omitted
               information has been filed separately with the Securities and Exchange
               Commission], and the laws of evidence of the State of Delaware shall
govern the                presentation of evidence therein.  

	 	(iv)  	An
award rendered by the arbitrator(s) appointed pursuant to this Agreement
               shall be final and binding on all parties to the proceeding, and judgment
on                such award may be entered by any court, state or federal, having
jurisdiction.  

     	b)	
          The parties stipulate that the provisions hereof shall be a complete defense to
          any suit, action, or proceeding in any court or before any administrative
          tribunal with respect to any controversy or dispute arising under this Agreement
          and which is arbitrable as herein set forth. The arbitration provisions hereof
          shall, with respect to such controversy or dispute, survive the termination or
          expiration of this Agreement. 

          

     	c)	
          Nothing herein contained shall be deemed to give the arbitrators any authority,
          power, or right to alter, change, amend, modify, add to, or subtract from any of
          the provisions of this Agreement. 

          

	 	d) 	The
arbitrators shall not be authorized to award punitive or consequential           damages
or attorneys’ fees. Nothing in this Section shall prohibit any           party
hereto from instituting litigation to enforce any final judgment, award or
          determination of the arbitration.  

*  *  *  *  

IN WITNESS WHEREOF, Seller and Buyer
have executed this Supply Agreement as of the Effective Date. 

		
		SELLER:

[Confidential treatment requested - the omitted information has been filed

separately with the Securities and Exchange Commission]

BUYER:

Security With Advanced Technology, Inc.

By: /s/ Scott Sutton 

Name: Scott Sutton

Title: CEO and PresidentExhibit
4.1

 

SECTION
102 ADDENDUM

TO OPTIUM CORPORATION 2006 STOCK OPTION AND INCENTIVE PLAN

This
Addendum to the Optium Corporation
2006 Stock Option And Incentive Plan (respectively “Addendum” and “Plan”)
shall be valid for all grants of stock options and other stock incentives made
by Optium Corporation (the “Company”)
under the Plan to Participants (as defined below).

This
Addendum is made in order to adjust the Plan to Section 102 of the Israeli
Income Tax Ordinance [new version] – 1961 and the Income Tax Rules (Tax Relief
for Issuance of Shares to Employees), 2003, so as to enable the grant of stock
based incentives under the Plan to Participants.

Regardless
of any provision of the Plan stating otherwise, the provisions of this Addendum are added to and shall be valid
for all grants of Stock Options, or any other stock based incentive by the
Company under the Plan to Participants. Except as detailed below, all other
provisions, definitions, terms and conditions, of the Plan shall continue to be
valid and in full force and effect.

1.     DEFINITIONS

DEFINED TERMS

Initially capitalized terms,
as used in this Addendum, shall have the meaning ascribed thereto as set forth
below:

	
  “Affiliate(s)”

  	
   

  	
  means a present or future company that employs
  Israeli residents and that either (i) Controls Optium Corporation or is
  Controlled by Optium Corporation or is Controlled by Optium Corporation’s
  subsidiaries; or (ii) is Controlled by the same person or entity that
  Controls Optium Corporation.

  
	
   

  	
   

  	
   

  
	
  “Allocate” or
  “Allocated”

  	
   

  	
  with respect to Options, means the allocation of
  Options by the Company to the Trustee on behalf of a Participant.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Control” or
  “Controlled”

  	
   

  	
  shall have the meaning ascribed thereto in Section
  102.

  
	
   

  	
   

  	
   

  
	
  “Holding Period”

  	
   

  	
  means the period in which the Allocated Options
  granted to a Participant or, upon exercise thereof the Underlying Shares, are
  to be held by the Trustee on behalf of the Participant, in accordance with
  Section 102, and pursuant to the Tax Track which the Company 

  

 

 

	
  

  	
   

  	
  selects.

  
	
   

  	
   

  	
   

  
	
  “Option”

  	
   

  	
  means a stock option or an Award as defined in the
  Plan or any other incentive based on stock, granted by the Company to the
  Participant according to the Plan.

  
	
   

  	
   

  	
   

  
	
  “Participant”

  	
   

  	
  means an Israeli resident who is an employee,
  officer or director of the Company or any Affiliate (provided that such
  person does not Control the Company), on behalf of whom an Option is
  Allocated pursuant to the Plan.

  
	
   

  	
   

  	
   

  
	
  “Section 102”

  	
   

  	
  means Section 102 of the Tax Ordinance.

  
	
   

  	
   

  	
   

  
	
  “Section 102 Letter”

  	
   

  	
  means a letter or an agreement, in which the
  Participant is notified of the decision to grant the Participant Options
  according to the terms of Section 102. The Section 102 Letter shall specify
  the Tax Track that the Company has elected. The Section 102 Letter shall
  include the Participant Undertakings specified in Section 5 of this Addendum.

  
	
   

  	
   

  	
   

  
	
  “Section 102 Rules” or
  “Rules”

  	
   

  	
  means the Income Tax Rules (Tax Relief for Issuance
  of Shares to Employees), 2003.

  
	
   

  	
   

  	
   

  
	
  “Tax Ordinance”

  	
   

  	
  means the Israeli Income Tax Ordinance [New
  Version], 1961, as amended, and any regulations, rules, orders or procedures
  promulgated thereunder.

  
	
   

  	
   

  	
   

  
	
  “Tax Track”

  	
   

  	
  means one of the three tax tracks described under
  Section 102, specifically: (1) the “Capital Gains Track Through a Trustee”;
  (2) “Income Tax Track Through a Trustee”; or (3) the “Income Tax Track
  Without a Trustee”; each as defined in Sections 1.1-1.2, respectively.

  
	
   

  	
   

  	
   

  
	
  “Trust Agreement”

  	
   

  	
  means the trust agreement signed between the Company
  or Affiliate and the Trustee.

  
	
   

  	
   

  	
   

  
	
  “Trustee”

  	
   

  	
  means the trustee appointed by the Company or the
  Affiliate to
  hold in trust on behalf of each Participant the Allocated Options and the
  Underlying Shares, in accordance to the provisions of Section 102 and the
  Trust Agreement.

  
	
   

  	
   

  	
   

  
	
  “Underlying Share”

  	
   

  	
  means a share of the Company
  issued upon the exercise of an Option according to the provisions of the
  Plan.

  

 

 2
 

2.     TRUST
ARRANGEMENT AND HOLDING PERIOD

Options shall
be granted to Participants according to the provisions of Section 102.

2.1   TRUSTEE TAX
TRACKS

If the Company
elects to grant Options through (i) the Capital Gains Track Through a Trustee,
or (ii) the Income Tax Track Through a Trustee, then, in accordance with the
requirements of Section 102, the Company shall appoint a Trustee who will hold
in trust on behalf of each Participant the Allocated Options and the Underlying
Shares issued upon exercise of such Options in trust on behalf of each
Participant according to the provisions of Section 102 and the Trust Agreement.

The
Holding Period for the Options will be as follows:

(A)                   The Capital Gains Tax Track Through a Trustee – if the
Company elects to Allocate the Options according to the provisions of this
track, then the Holding Period will be 24 months from the date of Allocation to
the Trustee on behalf of the Participant, or such shorter period as may be
approved by the Israeli Tax Authorities or by an amendment to Section 102 or
the Rules.

(B)                     Income Tax Track Through a Trustee – if the Company elects
to Allocate Options according to the provisions of this track, then the Holding
Period will be 12 months from the date of Allocation to the Trustee on behalf
of the Participant, or such shorter period as may be approved by the Israeli
Tax Authorities or by an amendment to Section 102 or the Rules.

Subject to
Section 102 and the Rules, Participants shall not be able to receive from the
Trustee, nor shall they be able to sell or dispose of Underlying Shares before
the end of the applicable Holding Period. If a Participant sells or removes the
Underlying Shares form the Trustee before the end of the applicable Holding
Period (“Breach”), the Participant shall pay all applicable taxes imposed
on such Breach by Section 7 of the Rules.

In the event of a
distribution of rights, including an issuance of bonus shares, in connection
with Options originally Allocated (the “Additional
Rights”), all such Additional Rights shall be Allocated and/or
issued to the Trustee for the benefit of Participants, and shall be held by the
Trustee for the remainder of the Holding Period applicable to the Options
originally Allocated. Such Additional Rights shall be treated in accordance
with the provisions of the applicable Tax Track.

2.2   INCOME TAX
TRACK WITHOUT A TRUSTEE

If
the Company elects to Allocate Options according to the provisions of this
track, then the Options will not be subject to a Holding Period.

 3
 

2.3   TRACK
SELECTION

The
Company or Affiliate, in their sole discretion, shall elect under which of the
above three Tax Tracks each Option is granted and shall notify the Participant
in the Section 102 Letter, which Tax Track applies to each granted Option.

2.4   CONCURRENT
CONDITIONS

The
Holding Period, if any, is in addition to the vesting period specified in the Plan
or in the Award Agreement (as defined in the Plan). The Holding Period and
vesting period may run concurrently, but neither is a substitute for the other,
and each are independent terms and conditions for Options granted.

2.5   TRUST
AGREEMENT

The
terms and conditions applicable to the trust relating to the Tax Track selected
by the Company, as appropriate, shall be set forth in an agreement signed by
the Company and the Trustee (the “Trust Agreement”).

3.     TAX MATTERS

This Addendum and grants to Participants shall be governed by, and
shall conform with and be interpreted so as to comply with, the requirements of
Section 102, any written approval from the Israeli Tax Authorities and any
amendment to Section 102 or the Rules.

All tax consequences under any applicable law which may arise from the
grant or Allocation of Options, from the exercise thereof or from the holding
or sale of Underlying Shares (or other securities issued under the Plan) by or
on behalf of the Participant, shall be borne solely by the Participant. The
Participant shall indemnify the Company and/or Affiliate and/or Trustee, as the
case may be, and hold them harmless, against and from any liability for any
such tax or any penalty, interest or indexing.

If the Company elects to
Allocate Options according to the provisions of the Income Tax Track Without a
Trustee (Section 2.2 of this Addendum), and if prior to the exercise of any
and/or all of these Options, such Participant ceases to be an employee,
director, or officer of the Company or Affiliate, the Participant shall deposit
with the Company a guarantee or other security as required by law, in order to
ensure the payment of applicable taxes upon the Exercise of such Options.

4.     WITHHOLDING TAXES

Whenever an amount with respect to withholding tax relating to Options
granted to a Participant and/or Underlying Shares issued upon the exercise
thereof is due from the Participant and/or the Company and/or an Affiliate
and/or the Trustee, the Company and/or an Affiliate and/or the Trustee shall
have the right to demand from a Participant such amount sufficient to satisfy
any applicable withholding tax requirements related thereto, and whenever
Shares or any other non-cash assets are to be delivered pursuant to the
exercise of an Option, or transferred thereafter, the 

 4
 

Company and/or an Affiliate and/or the Trustee shall have the right to
require the Participant to remit to the Company and/or to the Affiliate and/or
the Trustee, an amount in cash sufficient to satisfy any applicable withholding
tax requirements related thereto, and if such amount is not timely remitted,
the Company and/or the Affiliate and/or the Trustee shall have the right to
withhold or set-off (subject to applicable law) such Shares or any other
non-cash assets pending payment by the Participant of such amounts.

Until all taxes have been paid in accordance with Rule
7 of the Section 102 Rules, Options and/or Underlying Shares may not be sold,
transferred, assigned, pledged, encumbered, or otherwise
willfully hypothecated or disposed of, and no power of attorney or deed of
transfer, whether for immediate or future use may be validly given.
Notwithstanding the foregoing, the Options and/or
Underlying Shares may be validly transferred in a transfer made by will or laws
of descent, provided that the transferee thereof shall be subject to the
provisions of Section 102 and the Section 102 Rules as would have been
applicable to the deceased Participant were he or she have survived.

5.     PARTICIPANT
UNDERTAKINGS IN THE SECTION 102 LETTER

In
the Section 102 Letter, in accordance with the requirements of Section 102, the
Participant shall (1) agree and acknowledge that he or she have received and
read the Plan, the Section 102 Letter; (2) undertake all the provisions set
forth in: Section 102 (including provisions regarding the applicable Tax Track
that the Company or Affiliate has selected), the Section 102 Rules, the Plan,
the award document, the Section 102 Letter and the Trust Agreement; and (3)
subject to the provisions of Section 102 and the Rules, undertake not to sell
or release the Underlying Shares from Trust before the end of the Holding
Period.

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