Document:

20-F

Exhibit 4.1  

FORM OF DIRECTOR AND
OFFICER INDEMNITY AGREEMENT 

AGREEMENT, dated as of
___________________, between Eltek Ltd., an Israeli company (the
“Company”), and ______________________________ [insert name of officer], the
_____________________________ [insert position of the officer] of the Company (the
“Indemnitee”). 

	WHEREAS,  		Indemnitee
is a director and/or officer of the Company; 

	WHEREAS,  		the
Articles of Association of the Company  authorize the Company to indemnify and advance
expenses                      to its directors and officers to the fullest extent
permitted by law; 

	WHEREAS,  		the
Audit  Committee  of the Company,  the Board of Directors of the Company and the
 Shareholders,                      have  approved  the terms of this  Agreement  and
have  authorized  the  Company  to enter  into an                      agreement
 containing such terms with the Indemnitee,  as required under  applicable  provisions of
                     Israeli law; and 

NOW, THEREFORE, the parties
hereto agree as follows: 

	1.  	INDEMNIFICATION
AND ADVANCEMENT OF EXPENSES. 

	 	1.1. 	Without
derogating from the Company’s right to indemnify the Indemnitee
               retroactively pursuant to its Articles of Association, the Company hereby
agrees                and undertakes to indemnify the Indemnitee to the fullest extent
permitted by                applicable law, for any liability and expense specified in
Sections 1.1.1 and                1.1.2 below (the “Indemnifiable Expenses”)
that may be imposed                on Indemnitee due to an act performed or failure to
act by him in his capacity                as an Office Holder, as such term is defined in
the Companies Law –               5759–1999 (the “Companies Law”),
or due to any event or                occurrence related to the fact that Indemnitee is
or was an Office Holder, agent                or fiduciary of the Company or any
subsidiary of the Company or any entity in                which Indemnitee serves as an
Office Holder or an agent or fiduciary at the                request of the Company or
any subsidiary of the Company, except in the event                that the Indemnitee is
separately covered and/or indemnified under such duty,                either prior to or
after the date hereof (the following, as set forth in                schedule A, shall be
hereinafter referred to as “Indemnifiable                Events”): 

	 	1.1.1. 	A
financial liability imposed on Indemnitee in favor of a third party in a
               judgment (which third parties include, without limitation and to the
fullest                extent permitted by applicable law, any governmental entity),
including a                compromise judgment given as a result of a settlement or an
arbitrator’s                award which has been confirmed by a court (the “Judgment
               Liability”); and  

	 	1.1.2. 	Reasonable
litigation Expenses (to be paid either to the Indemnitee or if the                Company
so determines, at its sole discretion, directly to the Indemnitee’s
               legal and other advisors) expended by an Indemnitee or which were imposed
on an                Indemnitee by a court in proceedings instituted against him by the
Company or in                its name or by any other person or in relation to a criminal
charge from which                he was acquitted or in a criminal proceeding in which he
was convicted of a                criminal offense that does not require proof of
criminal intent (the “Litigation Expenses”).  

	 	
For
the purpose of this Agreement, “Expenses” shall include attorneys’ fees
and all other costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on appeal),
or preparing to defend, be a witness in or participate in any claim relating to any
Indemnifiable Event. 

	 	1.1.3. 	The
total amount of indemnification that the Company undertakes towards all
               persons whom it has resolved to indemnify pursuant to the above
resolutions,                jointly and in the aggregate, shall not exceed an amount
equal to two million US                dollars (US$2M) but in no case more than twenty
five percent (25%) of the net                equity of the Company (the “Liability
Cap”).  

	 	1.2. 	Notwithstanding
anything herein to the contrary, the indemnification undertaking given by
the Company hereunder, for all liabilities, damages, losses, costs and
expenses (any of the foregoing “Damages”) incurred by or
asserted against the Indemnitee shall be only with respect to events
described in Schedule A hereto.  

	 	1.3. 	If
so requested by Indemnitee, and subject to the Company’s reimbursement
               right set forth below, the Company shall and hereby undertakes to advance
an                amount (or amounts) estimated by the Company to cover Indemnitee’s
               reasonable Expenses with respect to which Indemnitee is entitled to be
               indemnified under Section 1.1 above. 

	 	1.4. 	In
cases in which it might be determined that the Indemnitee is not entitled to
               be indemnified according to this Agreement, the advance of Indemnitees’s
               Expenses as described in Section 1.3 above, shall only be paid to the
Indemnitee                by the Company after the Indemnitee had provided the Company,
in advance, with                satisfactory guaranties (“Guaranties”)
(as determined by the                Company in its sole discretion) which shall
correspond to the amount of the                advance of Indemnitees’s Expenses. 

	 	1.5. 	The
Company’s obligation to indemnify the Indemnitee and advance expenses
               in accordance with this Agreement shall be for such period (the
               “Indemnification Period”) as Indemnitee shall be subject
to any                possible claim or threatened, pending or completed action, suit or
proceeding or                any inquiry or investigation, whether civil, criminal or
investigative, arising                out of the Indemnitee’s service in the
positions described in Section 1.1                above, whether or not Indemnitee is
still serving in such positions. 

	 	1.6. 	The
Company undertakes that as long as it may be obligated to provide
               indemnification and advance Expenses under this Agreement, the Company
shall                make its best efforts to purchase and maintain in effect directors
and officers                liability insurance providing coverage in amounts as
determined by the Board of                Directors of the Company in its sole
discretion. 

	2. 	SPECIFIC
LIMITATIONS ON INDEMNIFICATION. 

	 	
Subject
to the provisions of the Companies Law and notwithstanding anything to the contrary in
this Agreement, the Company shall not indemnify or advance Expenses to the Indemnitee or
release the Indemnitee with respect to any of the following:  

	 	2.1.1. 	Breach
of Fiduciary Duty. A breach of the Indemnitee’s fiduciary                duty,
except, to the extent permitted under the Companies Law, for a breach of a
               fiduciary duty while the Indemnitee acted in good faith and had reasonable
               grounds to assume that such act would not harm the Company’s
interests;  

	 	2.1.2. 	Breach
of Duty of Care. A willful and intentional or reckless breach of                the
duty of care towards the Company.  

	 	2.1.3. 	Personal
Gain. An action taken by the Indemnitee with the intent of                realizing
unlawful personal gain; or  

	 	2.1.4. 	Fine
or Penalty. A fine or penalty imposed upon the Indemnitee.  

	 	2.1.5. 	Counterclaim.
A counterclaim made by the Company or in its name in                connection with a
claim against the Company filed by the Indemnitee.  

	 	2.1.6. 	Unlawful
Indemnification. To indemnify an Indemnitee if a final decision                by a
court having jurisdiction in the matter shall determine that such
               indemnification is not lawful.  

	 	2.1.7. 	Non-cooperation.
Non-cooperating Indemnitee, unwillingness to provide the                Company with such
information and cooperation as it may reasonably require.  

	3. 	GENERAL
LIMITATIONS ON INDEMNIFICATION. 

	 	
If,
when and to the extent that a final judicial determination is made, as to which all
rights of appeal therefrom have been exhausted or lapsed, that the Indemnitee would not
be permitted to be so indemnified as provided under this Agreement, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for
all such amounts theretofore paid.  

	4. 	NO
MODIFICATION. 

	 	
No
supplement, modification or amendment of this Agreement shall be binding unless executed
in writing by both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver. Any waiver
shall be in writing.  

	5.  	SUBROGATION.  

	 	
In
the event of payment under this Agreement, the Company shall be subrogated to the extent
of such payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.  

	6.  	REIMBURSEMENT.  

	 	
The
Company shall not be liable under this Agreement to make any payment in connection with
any claim made against Indemnitee to the extent Indemnitee has otherwise actually
received payment (under any valid and collectable insurance policy or under a valid and
enforceable indemnity clause or agreement (excluding this Letter of Indemnification), or
otherwise) of the amounts otherwise indemnifiable hereunder, except in respect of any
excess beyond the payment under such insurance, clause or agreement. Any amounts paid to
Indemnitee under such insurance policy or otherwise after the Company has indemnified the
Indemnitee for such liability or Expense shall be repaid to the Company promptly upon
receipt by Indemnitee.  

	7.  	EFFECTIVENESS.  

	 	
This
Agreement shall be of full force and effect immediately upon its execution subject to the
requisite Shareholders approval, which the Company shall endeavor to obtain.  

	8. 	NOTIFICATION
AND DEFENSE OF CLAIM. 

	 	
Promptly
after receipt by Indemnitee of notice of a threat or the commencement of any action, suit
or proceeding (including any proceedings by or against the Company and any subsidiary
thereof), Indemnitee will notify the Company of the threat or commencement hereof; but
the omission so to notify the Company will not relieve it from any liability unless and
to the extent that such failure to provide notice materially prejudices the Company’s
or Indemnitee’s ability to defend such action. Notice to the Company shall be
directed in writing to the Chairman of the Board of Directors’ of the Company at the
address shown on the signature page of this Agreement (or such other address as the
Company shall designate in writing to Indemnitee) or if the Indemnitee is then the
Chairman of the Board of Directors’, such notice shall be directed to the Chief
Executive Officer of the Company. In addition, the Indemnitee must advise the Company on
an ongoing and current basis concerning all events, which the Indemnitee suspect may give
rise to the initiation of legal proceedings against him. With respect to any such action,
suit or proceeding as to which Indemnitee notifies the Company of the commencement
thereof and without limitation of Sections 1.1 and 2:  

	 	8.1. 	The
Company will be entitled to participate therein at its own expense; and 

	 	8.2. 	Except
in the event that there is a conflict of interest between the Company and
               the Indemnitee in the conduct of the defense of such action, suit or
proceeding,                to the extent that it may wish, the Company jointly with any
other indemnifying                party similarly notified will be entitled to assume the
defense thereof. After                notice from the Company to the Indemnitee of its
election to assume the defense                thereof, the Company will not be liable to
Indemnitee under this Agreement for                any legal or other expenses
subsequently incurred by Indemnitee in connection                with the defense thereof
except as provided above. Indemnitee shall have the                right to employ its
counsel in such action, suit or proceeding, but the fees and                expenses of
such counsel incurred after notice from the Company of its                assumption of
the defense thereof shall be at the expense of the Indemnitee 

	 	8.3. 	The
Company shall not be liable to indemnify the Indemnitee under this Agreement
               for any amounts paid in settlement of any action or claim effected without
its                written consent. The Company shall not settle any action or claim in
any manner                which would impose any penalty or limitation on the Indemnitee
without the                Indemnitee’s written consent provided that the Indemnitee’s
consent                shall not be required if the settlement includes a complete
release of                Indemnitee, does not contain any admittance of wrong-doing by
Indemnitee, and is                monetary only. 

	 	8.4. 	In
the case of criminal proceedings the Company and/or its legal counsel will
               not have the right to plead guilty in the Indemnitee’s name or agree
to a                plea-bargain in the Indemnitee’s name without the Indemnitee’s
prior                written consent. Neither the Company nor the Indemnitee will
unreasonably                withhold their consent to any proposed settlement.
Furthermore, in a civil                proceeding (whether before a court or as a part of
a compromise arrangement),                the Company and/or its counsel will not have
the right to admit to any                occurrences that are not indemnifiable pursuant
to this Indemnification                Agreement and/or pursuant to law, without the
Indemnitee’s written consent.                However, the aforesaid will not prevent
the Company and/or its counsel as                aforesaid, with the approval of the
Company, coming to a financial arrangement                with a plaintiff in a civil
proceeding without the Indemnitee consent so long as                such arrangement will
not be an admittance of a wrong doing not indemnifiable                pursuant to this
Indemnification Agreement. 

	9. 	NON-EXCLUSIVITY. 

	 	
The
rights of the Indemnitee hereunder shall not be deemed exclusive of any other rights he
may have under the Company’s Articles of Association or applicable law or otherwise.  

	10. 	BINDING
EFFECT. 

	 	
The
right to be indemnified under this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors. This
Agreement shall continue in effect during the Indemnification Period, regardless of
whether Indemnitee continues to serve as an officer or director of the Company or of any
other enterprise at the Company’s request. The Company’s undertaking under this
Indemnification Agreement shall remain in full force and effect at all times, and shall
continue to apply towards the Indemnitee after he ceases to serve as an director and /or
officer with respect to Damages incurred as a result of Indemnifiable Events which
occurred during the time his served, and in his capacity as an director and /or officer.  

	 	
For
the avoidance of doubt, This Indemnification Agreement shall not be construed as an
agreement for the benefit of a third party, including an insurance company.  

	11.  	SEVERABILITY.  

	 	
If
any provision of this Agreement is found by a court of competent jurisdiction to be
invalid or void or unenforceable, such provisions, to the extent possible shall be
severed from this Agreement, all of the other provisions shall remain in effect, and
neither party shall have any claim against the other in such event. Furthermore, if such
invalid or unenforceable undertaking may be modified or amended so as to be valid and
enforceable as a matter of law, such undertakings will be deemed to have been modified or
amended, and any competent court or arbitrator are hereby authorized to modify or amend
such undertaking, so as to be valid and enforceable to the maximum extent permitted by
law.  

	12. 	GOVERNING
LAW. 

	 	
This
Agreement shall be exclusively governed by and construed, interpreted and enforced in
accordance with the laws of the State of Israel. The competent court in Tel Aviv, Israel
shall have sole and exclusive jurisdiction regarding any dispute or claim arising
hereunder.  

	13.  	NOTICE.  

	 	
All
notices and other communications required or permitted hereunder shall be in writing,
shall be effective when given, and shall in any event be deemed to be given (a) five (5)
days after deposit with the applicable postal service, if delivered by first class
registered mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one
business day after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by facsimile
transmission, if deliverable by facsimile transmission, with copy by first class
registered mail, postage prepaid, and shall be addressed if to Indemnitee, at each
Indemnitee’s address as set forth beneath the Indemnitee’s signature to this
Agreement and if to the Company at the address of its principal corporate offices
(attention: Secretary) or at such other address as such party may designate by ten (10)
days’ advance written notice to the other party hereto.  

	14. 	ENTIRE
AGREEMENT AND TERMINATION. 

	 	
This
Agreement represents the entire agreement between the parties; and there are no other
agreements, contracts or understandings between the parties with respect to the subject
matter of this Agreement. No termination or cancellation of this Agreement shall be
effective unless in writing and signed by both parties hereto.  

		
		
		
		
		
	Eltek Ltd. 	 
	 	

	 
	By:	 
	 	

	 
	Address:	 
	 	

	 
	 
	Indemnitee 	 
	 	

	 
	Name:	 
	 	

	 
	Address:
	 	

SCHEDULE A 

TYPE OF EVENTS 

 

	1.  	Negotiations,
execution, delivery and performance of agreements on behalf of the Company including,
inter alia : Any claim or demand made by a customer, suppliers, contractors or other
third parties transacting any form of business with the Company, its subsidiaries or
affiliates, in the ordinary course of their business, relating to the negotiations or
performance of such transactions, representations or inducements provided in connection
thereto or otherwise.

	 	
Any
claim or demand made in connection with any transaction not in the ordinary course of
business of either the Company, its subsidiaries or affiliates or the party making such
claim, including the sale, lease or purchase of any assets or business. 

	2.  	Anti-competitive
acts and acts of commercial wrongdoing. 

	3.  	Acts
in regard of invasion of privacy including with respect to databases and acts in regard
of slander.

	4.  	Any
claim or demand made for actual or alleged infringement, misappropriation or
               misuse of any third party’s intellectual property rights including,
but not                limited to confidential information, patents, copyrights, design
rights, service                marks, trade secrets, copyrights, misappropriation of
ideas by the Company,                it’s subsidiaries or affiliates. 

	 	
Actions
taken in connection with the intellectual property of the Company and its protection,
including the registration or assertion of rights to intellectual property and the
defense of claims relating thereof. 

	5.  	Participation
and/or non participation at the Company’s board meetings, bona fide expression of
opinion and/or voting and/or abstention from voting at the Company’s board meetings.

	6.  	Approval
of corporate actions including the approval of the acts of the Company’s management,
their guidance and their supervision.

	7.  	Claims
of failure to exercise business judgement and a reasonable level of proficiency,
expertise and care in regard of the Company’s business.

	8.  	Violations
of securities laws of any jurisdiction, including without limitation, fraudulent
disclosure claims, failure to comply with SEC and/or the Israeli Securities Authority
and/or any stock exchange disclosure or other rules and any other claims relating to
relationships with investors, shareholders and the investment community and any claims
related to the Sarbanes-Oxley Act of 2002, as amended from time to time.

	 	
Any
claim or demand made under any securities laws or by reference thereto, or related to the
failure to disclose any information in the manner or time such information is required to
be disclosed pursuant to such laws, or related to inadequate or improper disclosure of
information to shareholders, or prospective shareholders, or related to the purchasing,
holding or disposition of securities of the Company or any other investment activity
involving or affected by such securities , including any actions relating to an offer or
issuance of securities of the Company or of its subsidiaries and/or affiliates to the
public by prospectus or privately by private placement, in Israel or abroad, including
the details that shall be set forth in the documents in connection with execution thereof. 

	9.  	Violations
of laws requiring the Company to obtain regulatory and governmental licenses, permits and
authorizations or laws related to any governmental grants in any jurisdiction.

	10.  	Claims
in connection with publishing or providing any information, including any filings with
any governmental authorities, on behalf of the Company in the circumstances required
under any applicable laws

	11.  	Any
claim or demand made by employees, consultants, agents or other individuals
               or entities employed by or providing services to the Company relating to
               compensation owed to them or damages or liabilities suffered by them in
               connection with such employment or service. 

	 	
Resolutions
and/or actions relating to employment matters of the Company and/or its subsidiaries
and/or affiliates. 

	 	
Events,
pertaining to the employment conditions of employees and to the employer – employee
relations, including the promotion of workers, handling pension arrangements, insurance
and saving funds, options and other benefits. 

	12.  	Any
claim or demand made by any lenders or other creditors or for moneys
               borrowed by, or other indebtedness of, the Company, it’s subsidiaries
or                affiliates. 

	13.  	Any
claim or demand made by any third party suffering any personal injury and/or bodily
injury and/or property damage to business or personal property through any act or
omission attributed to the Company, it’s subsidiaries or affiliates, or their
respective employees, agents or other persons acting or allegedly acting on their behalf.

	14.  	Any
claim or demand made directly or indirectly in connection with complete or
               partial failure, by the Company or any subsidiary or affiliate thereof, or
their                respective directors, officers and employees, to pay, report, keep
applicable                records or otherwise, of any foreign, federal, state, country,
local, municipal                or city taxes or other compulsory payments of any nature
whatsoever, including                without limitation, income, sales, use, transfer,
excise, value added,                registration, severance, stamp, occupation, customs,
duties, real property,                personal property, capital stock, social security,
unemployment, disability,                payroll or employee withholding or other
withholding, including any interest,                penalty or addition thereto, whether
disputed or not. 

	15.  	Any
claim or demand made by purchasers, holders, lessors or other users of
               products or assets of the Company, or individuals treated with such
products,                for damages or losses related to such use or treatment. 

	16.  	Any
administrative, regulatory or judicial actions, orders, decrees, suits,
               demands, demand letters, directives, claims, liens, investigations
proceedings                or notices of noncompliance or violation by any governmental
entity or other                person alleging potential responsibility or liability
(including potential                responsibility or liability for costs of enforcement,
investigation, cleanup,                governmental response, removal or remediation, for
natural resources damages,                property damage, personal injuries, or
penalties or contribution,                indemnification, cost recovery, compensation,
or injunctive relief) arising out                of, based on or related to (x) the
presence of, release spill, emission,                leaking, dumping, pouring, deposit,
disposal , discharge, leaching or migration                into the environment (each a
“Release”) or threatened Release of, or                exposure to, any
hazardous, toxic, explosive or radioactive substance, wastes or                other
substances or wastes of any nature regulated pursuant to any environmental
               law, at any location, whether or not owned, operated, leased or managed by
the                Company or any of its subsidiaries, or (y) circumstances forming the
basis of                any violation of any environmental law, environmental permit,
license,                registration or other authorization required under applicable
environmental                and/or public health law. 

	17.  	Actions
in connection with the Company’s’ testing of products and/or                in
connection with the sale, distribution, license or use of such products. 

	18.  	Resolutions
and/or actions relating to a merger of the company and/or of its
               subsidiaries and/or affiliates, the issuance of shares or securities
exercisable                into shares of the Company, changing the share capital of the
Company, formation                of subsidiaries, reorganization, winding up or sale of
all or part of the                business, operations or shares the Company. 

	19.  	Resolutions
and/or actions relating to investments in the Company and/or its
               subsidiaries and/or affiliated companies and/or the purchase or sale of
assets,                including the purchase or sale of companies and/or businesses,
and/or                investments in corporate or other entities and/or investments in
traded                securities and/or any other form of investment. 

	20.  	Act
or omission resulting in the failure to maintain appropriate insurance
               and/or inadequate safety measures and/or a malpractice of risk management. 

	21.  	Any
administrative, regulatory or judicial actions, orders, decrees, suits,
               demands, demand letters, directives, claims, liens, investigations,
proceedings                or notices of noncompliance or violation by any governmental
entity or other                person alleging the failure to comply with any statute,
law, ordinance, rule,                regulation, order or decree of any of its
subsidiaries and/or affiliates, or any                of their respective business
operations.20-F

Exhibit 4.6  

Lease Agreement  

That
was executed in Tel Aviv on the 26th of June 2002 

-Between- 

	 	
A.Z.
Baranovitz – Properties and Leasing Ltd.

A registered company according to the
Companies Ordinance

37 Yitzhak Sadeh, Tel Aviv

(hereinafter: the “Landlord”) 

Party of the first part  

-And between- 

	 	
Eltak
Ltd

A company registered according to the Companies Ordinance

From
the industrial zone Sgula, Petach Tikva

(Hereinafter:
the “Tenant”) 

Party of the second part  

	Whereas:  	The
 Landlord  together  with the company  Neca  Chemicals  1952 Ltd.  (hereinafter:
                  "Neca")  is the  owner  and  lessor  of a part of  parcel  13 in  block
 6354 in the                   industrial zone in Sgula Petach Tikva (hereinafter: the
"Property");

	And whereas: 	
The Tenant wishes to lease from the Landlord a building in the areas of approx. 9,000
square meters and a yard surrounding the building located on the Property, as marked in
the plan attached to this agreement as appendix “A” and which constitutes an
integral part hereof (hereinafter: the “Plan”), in the area of approx. 9,000
square meters gross approximately (hereinafter this area shall be referred to as the
“Leased Property”); 

	And whereas: 	
The Landlord declares that except for Neca, which jointly holds the Property together
with the Landlord in partnership, no other person or entity has any rights to the Leased
Property before the signing of this agreement; 

	And whereas: 	
The Landlord declares that between Neca and the Landlord mutual lease deeds were signed
which were registered in the Land Registration Office on the 26th of March
1972 according to which the Landlord is entitled to lease the Leased Property without the
need for Neca’s consent; 

	And whereas: 	
The Tenant wishes to lease the Leased Property from the Landlord for periods in
accordance and for consideration as specified in this agreement hereafter. 

Therefore, the parties have
decided and agreed as follows: 

	1. 	The
preamble of this agreement constitutes an integral part hereof and it binds           the
parties. 

	2. 	In
this agreement: 

	 	“The
Property” – 	Parcel 13 in Block 6354. 

	 	“The
Building” – 	An industrial building in which there is a basement and 3 floors
that are divided into 2 wings (a northern wing and a southern wing) which was built on
the Property, in the area of approximately 9,000 square meters. 

	 	“The
Leased Property” – 	The building and the yard surrounding the building as marked
in the Plan, except for the storage room. 

	 	“The
Storage Room” – 	A basement in the area of approximately _______ (not readable)
which is marked on the plan and is used by Landlord. 

	 	A.	The
lease periods according to this agreement are as follows: 

	 	(1)	For
an area of approx. 7,470 square meters marked in the Plan by the color red
          – starting from the 1st of January 2002, until the           31st of
December 2011.  

	 	(2)	For
an area of approx. 1.530 square meters and which is marked in the plan by           the
color blue – starting from the completing of the adjustment works as
          mentioned in section 4 hereafter until the 31st of December 2011.  

	3. 	Accept
as mentioned in sections 6 and 21 of this agreement, and as long as it           was not
agreed otherwise in writing, the Tenant shall not be entitled during the           entire
lease period to terminate the lease and he shall be obligated to continue           to
pay the Landlord full rent and the other payments and obligations that he           must
pay pursuant to this agreement until the end of the lease period, whether           he
used the Leased Property or whether he did not use the Leased Property. 

	4. 	It
is agreed between the parties that the Landlord shall perform adjustment           works
in the area specified in section 3 (a)(2) above, according to the
          specifications attached hereto as appendix B of this agreement (hereinafter:
the           “Specifications”). The completion date of the adjustment works as
          mentioned in section 3 (a) (2) above shall be determined as the date on which
          Mr. Amos Evron from the company Enosh Management and Engineering Systems Ltd.
          confirmed that all of the adjustment works have been executed in accordance
with           the specifications. 

	 	
The
Tenancy Protection Laws Do Not Apply  

2

	5. 	The
parties declare and confirm and the Tenant declares and confirms that he was
          informed that the Leased Property was first leased after the 20th of
          August 1968 and that there was no Tenant in the Leased Property who is entitled
          to possess it before the signing of this agreement, and therefore the
provisions           of the Law of Protected Tenancy (Consolidated Version) – 1972
and the           tenancy protection laws that were prior to this law, shall not apply to
the           lease according to this agreement. (Hereinafter: the “Law”). 

	 	
The
parties declare and confirm that the Leased Property was vacant from any Tenant entitled
to possess it before the signing of this agreement, the Tenant did not pay any payment as
key money for the Leased Property, he did not participate and he shall not participate in
any part of the construction costs of the Leased Property, and therefore the provisions of
the Law shall not apply to this lease or any other law that shall take its place. 

	 	
The
Tenant declares and confirms that he is aware that he shall not be protected according to
the law and the Tenant’s undertakings to vacate the Leased Property at the end of the
lease period shall especially remain valid. 

	6. 	A.	
The purpose of the lease according to this agreement is to manage and operate
               an industrial plan of the Tenant to create printed circuit boards,
electronic                components and electro – chemical products and a light
industry of a                similar nature or that serves the Tenant’s plan only
and this is subject to                the provisions in sections 24 and 25 hereafter. The
Tenant undertakes not to use                the Leased Property for any other purpose
(hereinafter: the “Purposes of                the Lease”). 

	 	B. 	The
Tenant undertakes to handle and obtain at his responsibility and at his
               expense all of the permits required pursuant to any law from any of the
               authorized authorities to manage in the Leased Property the business
according                to the Purposes of the Lease, including a license and/or
business licenses,                licenses from the local authority, kashrut
certificates, and any other authority                whose authority is required for
managing the business in the Leased Property.                The Landlord shall cooperate
with the Tenant in obtaining the permits and                licenses and shall sign any
document if his signature shall be required for this                purpose, subject to
any law. If the Tenant shall not receive a required license                for the
purpose of running his business in the Leased Property due to an action
               and/or omission of the Landlord, after the Tenant made his best efforts
for                obtaining such license as mentioned, the Tenant shall have the
possibility to                cancel this agreement, by a prior written notice to the
Landlord 60 days in                advance. Notwithstanding the aforesaid, if the Tenant
shall not be given a                license required for managing his business in the
Leased Property as a result                the non issuance of a completion certificate
for the building due to actions                that the Tenant performed in the Leased
Property, the Tenant shall not be                entitled to cancel the lease agreement
according to this subsection. 

	 	
The
Tenant undertakes to pay all of the taxes, the fees and the obligatory payments involved
in obtaining the permits and the licenses for the day to day operations of the Leased
Property. 

	 	
The
Tenant shall compensate and indemnify the Landlord for any lawsuit, payment or damage that
shall be caused to the Landlord according to a judgment for an action or omission of the
Tenant not in accordance with the provisions of this subsection (b) provided the Landlord
notified the Tenant of any claim for payment or damage that is about to be caused or that
was caused and shall give him reasonable time in advance from the date that he was
informed of the possibility to defend oneself against these lawsuits. 

3

	7.	A. 	
In consideration for the fulfillment of all of the Landlord’s
               undertakings pursuant to this agreement, the Tenant undertakes to pay the
               Landlord fundamental monthly rent for the first lease period in the amount
of                NIS 238,464 (two hundred thirty eight thousand, four hundred sixty four
NIS) per                month (hereinafter: “the Fundamental Rent”) with
additional linkage                differences to the index as defined hereafter
(hereinafter: “Linkage                Differences”) and with additional Value
Added Tax at the rate stipulated in                the law on the date of payment. 

	 	B. 	For
clarification purposes the parties declare that the fundamental rent was
               determined by the following calculation: 

	 	
The
amount in NIS equals $6 per square meter with additional Vat per month multiplied by 9,000
square meters totaling $54,000 per month with additional Vat multiplied by the
representative rate of $1- 4.416 NIS. Total of NIS 238,464. 

	 	C. 	(1)	
Fundamental rent with additional Vat and with additional linkage difference
               for the lease period shall be paid for each period of two (2) months in
advance                on the first day of each calendar month, on the 1st of
January, on                the 1st of March, on the 1st of May, on
the 1st               of July, on the 1st of September and on the 1st of
               November of each lease year.  

	 	(2) 	Notwithstanding
the aforesaid in subsection (1) above, it is hereby agreed that                out of the
amount of rent specified above, the rent for the part of the Leased
               Property specified in section 3 (a) (2) above which constitutes the amount
of                NIS 40,539 with additional Vat which equals the amount of $9,180 with
additional                Vat, shall be paid from the date of the completion of the
adjustment works                mentioned in section 4 above.  

	 		In
order to alleviate collection the Tenant hereby gives the Landlord at the
               signing of this agreement 9 post dated checks in which the amounts for
payment                are written for the part of the Leased Property specified in
section 3 (a) (1)                above and which are dated in accordance with subsection
(1) above, for the first                18 months of rent. The Tenant undertakes to pay
the Landlord at the payment                dates of these checks, in addition to the
amounts stipulated in these checks,                the Vat differences if such shall
exist in accordance with the law and the                linkage differences for each such
payment. At the date of the payment of each                said check the Landlord shall
issue to the Tenant a legal tax invoice for the                payment mount which is
stipulated in the check and with the additional                differences whose payment
is required as mentioned above. 

	 	
Once
every 18 lease months the Tenant shall give the Landlord 9 post dated checks as mentioned
above. 

	 	D. 	The
Tenant undertakes to pay in addition to the fundamental rent the linkage
               differences, Vat at the rate that was stipulated in the law at any time of
the                actual payment, against a tax invoice of the Landlord. 

4

	 	E. 	In
this agreement: –

	 	“The
Index” – 	Means the consumer price index that is published by the central bureau
of statistics and which includes this same index even if it was published by a different
body or institution that shall take its place, whether it is comprised from the same data
or not. If another index shall take its place and the bureau will not determine the ratio
between it and the replacing index, economic experts that shall be elected by the parties
will determined the ratio between the index and the replacing index and if the parties
shall not elect these experts they will be appointed at the request of party, by the
General Managers of Bank Hapoalim Ltd. and Bank Leumi Ltd. and their decision will be
binding.  

	 	“The
Basic Index” –	The Index of the month of November 2001 that shall be published
on the 15th of December 2001.  

	 	“The
New Index” – 	The Index knows at the date of the actual payment of any amount of
rent or any other amount.  

	 	F. 	The
Tenant undertakes to pay the Landlord, in addition to the fundamental rent,
               linkage differences at the rate of 100% to the consumer price index, and
at any                payment date the Landlord will make a calculation of the linkage
differences                starting from the Basic Index until the New Index, and the
Tenant shall pay the                linkage differences as mentioned for the previous
payment together with the                fundamental rent. 

	 	G. 	The
parties agree that on the 31st of December 2006 (hereinafter: the
               “New Date”) the amount of fundamental rent shall be examined and
               determined again in the following manner:- 

	 	
If
at the New Date it will turn out that the amount of the fundamental rent including the
difference between the basic index and the new index that was valid in the month previous
to the New Date, lower or higher than the amounts that can be received as rent for
industrial buildings in the industrial area of Sgula in Petach Tikva, for a building which
is identical or similar as much as possible to the Building from the aspect of its quality
and type, between a willful Landlord and a willful Tenant, these amounts of rent shall
constitute from this New Date the fundamental rent as defined in this agreement. 

	 	
The
rent that can be received between a willful Landlord and a willful Tenant as mentioned,
shall be discussed between the parties during the month of September 2006. If by the
30th of September 2006 the parties shall not reach an agreement each one of the
parties shall have the right to request the head of the Appraisers Office in Israel so
that he will appoint an appraiser who will determine the amount of this said rent,
provided the appraiser that shall be appointed as mentioned is not engaged and/or was not
engaged by any of the parties of this agreement during the year prior to the date of the
first request to the head of the Appraisers Office. The appraiser shall act in accordance
with the following provisions: 

5

	 	(1) 	The
appraiser shall not, for any reason, be in a situation of conflict of           interests
with respect to the appraisal question or with any of the parties.  

	 	(2) 	The
appraiser must act towards the parties with fairness and faith.  

	 	(3) 	The
appraiser is entitled to instruct the parties to disclose and furnish           documents
and to do anything else which is involved in conducting an appraisal.  

	 	(4) 	If
the appraiser has requested from a party of this agreement anything that is
          involved in conducting the appraisal, and without any justified reason this
          party did not fulfill the request, the appraiser is entitled, after he warned
          this party as mentioned, to determine the said rennet without his request being
          fulfilled.  

	 	(5) 	The
appraiser shall not hold a meeting with one of the parties without the other
          party unless the appraiser warned the other party – in writing or orally,
          that he hold discussions without his presence if he shall not appear.  

	 	(6) 	The
appraiser will make his appraisal findings and any other material that was
          collected by him within the framework of his duties available to the parties of
          this agreement, at any reasonable time, for review and to copy.  

	 	(7) 	The
appraiser shall act in the matter that seems to him to be most affective for           a
just decision and shall determine according to his best knowledge the amount           of
the said rent according to the material that is before him.  

	 	(8) 	The
appraiser must determine the amount of the said rent within three months           after
the date he was appointed.  

	 	(9) 	Any
document that was sent to the appraiser or to one of the parties by           registered
mail with a certificate of receipt, shall be regarded as delivered to           the
addressee at the date registered in the certificate of receipt or in the
          certificate of refusal to accept the document.  

	 	(10) 	The
appraiser is required to explain his decision.  

	 	(11) 	The
costs of the appraisal shall be paid equally by the parties. In order to
          eliminate doubt, it is hereby clarified that the amounts that shall be
          determined by agreement in advance by the parties as remuneration of the
          appraiser is the only, final and absolute remuneration for the appraisal
          services and no consideration or any other benefit shall be paid to the
          appraiser, whether directly or indirectly with respect to the performance of
the           appraisal, except for the remuneration to which the parties agreed in
advance.  

	 	
The
appraiser shall sign an undertaking in which he confirms that he read this section 7 (g)
and that he undertakes to comply with its provisions. Notwithstanding all of the
aforesaid, if the appraiser did not sign such undertaking as mentioned, his appointment
shall be cancelled and a new appraiser shall be elected in accordance with the provisions
of this section. 

6

	 	
In
order to eliminate doubts it is declared and agreed that the provisions of this section,
regarding linkage of fundamental rent to the index, shall apply also to the new
fundamental rent that shall be determined as mentioned above. 

	 	
In
order to remove doubt the determination of the rent as mentioned above shall be performed
by the New Date, and starting from this date the Tenant shall pay the amount of rent that
was determined. 

	8.	A. 	
The Tenant declares and confirms that before the signing of this agreement he
               saw, examined and inspected the Leased Property and all of its parts and
               devices, the surroundings, the location, and the access ways to the Leased
               Property and he found them suitable to his needs, and he agrees to lease
the                Leased Property in its current condition and he hereby waives towards
the                Landlord any claim due to unsuitability of any type and/or one claim
and/or                evidence and/or claim of defect and/or any other claim, all subject
to the                provisions of sections 4 and 10 H of this agreement and the Landlord’s
               representations according to this agreement. 

	 	B.	The
Landlord declares and confirms that: 

	 	(1) 	His
signature on this agreement and its performance do not conflict with any
               other undertaking of the Landlord towards any third party with respect to
the                Leased Property;  

	 	(2) 	After
performing the adjustments and the works as mentioned in sections 4 and 10
               H of this agreement the Leased Property shall be in a proper state and
shall fit                the plans that were attached to this agreement, except for
adjustments that were                performed in the Leased Property by the Tenant;  

	 	(3) 	There
is no decision, order, judgment, instruction from any judicial authority
               that prevents the performance of this agreement in full;  

	 	(4) 	Use
of the storage room shall be only for storing office equipment and no other
               use shall be made of the storage room including use that prevents or
interferes                with the purposes of the lease in any way.  

	9.	A. 	
During the entire lease period the Tenant undertakes to maintain the Leased
               Property and all of its parts including its sanitary and electrical
devices and                any other devices, in good clean and proper condition, and in
good working order                and the Tenant undertakes to repair at his expense all
of the damages the                mishaps and the defects without any exception, that
shall be caused to the                Leased Property, to its devices during the entire
duration of the lease period                and this is immediately after they occurred
or were caused, except for damages                that result from regular wear and tear
whose repair will apply to the Landlord                and this is immediately after he
received a notice of this in writing from the                Tenant. 

	 	
In
order to eliminate doubt the Tenant declares and confirms that the Landlord notified him
and he agrees that the air conditioning system that is installed as of today in the
southern wing of the building is a system that is capable of supplying to the Leased
Property a maximum amount of up to 200 tons of cooling. 

7

	 	B. 	If
one of the parties did not fulfill his undertakings according to this section
               (hereinafter in this subsection: the “Party in Breach”) all or
in                part, the other party is entitled if he wishes, even though he is not
required                to do so, after giving a written warning in which the Party in
Breach will be                given the possibility to repair the breach within a
reasonable time according to                the circumstances of the matter, to perform
himself or by others the required                repairs in the Leased Property, and the
other party shall be entitled to collect                from the party in breach all of
the costs that he spent for the repairs with                additional interest at the
maximum rate customary at banks at that time for                unapproved overdrafts and
with full compensation for the damage that were caused                to the Leased
Property as mentioned, and the party in breach shall be required                to pay
these amounts to the other party upon his demand to do so. 

	10.	A. 	
Without derogating from the aforesaid in this agreement, the Tenant
               undertakes not to do by himself and/or by others and/or not to allow any
changes                or additions or improvements in the Leased Property or in any part
of it without                receiving the Landlord’s consent in writing subject to
everything mentioned                in this agreement. If the Tenant shall request from
the Landlord permission to                make changes or additions or renovations or
adjustments in the Leased Property                for needs that suit the purpose of the
leased, and only if the Landlord shall                give the Tenant permission for this
in a written consent in advance, the Tenant                undertakes to obtain at his
expense and at his responsibility all of the permits                required from the
authorized authorities for performing the changes to the                Leased Property,
to which the Landlord shall agree as mentioned. Notwithstanding                the
aforesaid, the Landlord shall not abstain from giving his consent if the
               changes or the additions or the improvements in the Leased Property are
required                by virtues of the provisions of any law or by virtue of the
instructions of a                judicial authority and provided the investment in the
change or the addition or                the improvement as mentioned shall be paid by
the Tenant. If the Landlord shall                object to the changes and/or additions
and/or improvements in the Leased                Property which are required by virtue of
the provisions of any law or by virtue                of the instructions of a judicial
authority after the Tenant made efforts to                cancel the demand to make such
change or addition or improvement, then the                Tenant shall be able to cancel
this agreement, by a written notice to the                Landlord 60 days in advance. 

	 	B. 	If
the Tenant shall request from the Landlord permission to make changes or
               additions or renovations or adjustments to the Leased Property and the
Landlord                shall give the Tenant prior written consent to make these said
changes as                specified in the written consent, the provisions of subsections
(c) to (g)                hereafter shall apply. 

	 	C. 	The
Tenant undertakes to pay all of the taxes, the levies, the fees and all of
               the obligatory payment that are involved in obtaining al of the permits
for                performing all of the provisions of this section, and he shall take
care to                obtain, at his expense and under his responsibility all of the
permits that                shall be required as mentioned for the performance of
everything mentioned in                this section, and for the purpose of obtaining a
business license for the Leased                Property. The Landlord shall cooperate
with the Tenant in obtaining the permits                and the licenses, and he shall
sign any document that requires his signature for                this, subject to the
other provisions of this subsection. 

8

	 	
The
Tenant shall compensate and indemnify the Landlord according to a judgment for any claim,
payment or damage that shall be caused to the Landlord for any action or omission of the
Tenant not in accordance with the provisions of this agreement, provided the Landlord
notified the Tenant of this in writing within a reasonable time in advance, in order to
allow the Tenant to defend oneself against such claims. 

	 	D. 	Upon
the end of the lease periods, the Tenant shall have the right to perform
               with respect to any change, addition, improvement, adjustment and
installation                that were performed in the Leased Property (hereinafter: the
               “Additions”) one of the following actions: 

	 	(1)	To
leave the Addition in the Leased Property; or  

	 	(2) 	To
dismantle the addition and to take it with him while restoring the building
               to its previous condition.  

	 	
In
order to eliminate doubt the Landlord hereby approves and declares that the air
conditioning that was installed on the north side of the roof of the building by the
Tenant, except for the air pipes from the air conditioning system to the rooms of the
Leased Property, can be dismantled without damaging the building and he recognized the
right of the Tenant to dismantle it and take it. 

	 	E. 	Without
derogating from the generality of the aforesaid, the Tenant undertakes                not
to make any changes that could affect the external appearance of the
               building such as: painting external walls or the Leased Property,
including                pillars or internal walls that are adjacent to windows or
installing blinds on                windows etc.. 

	 	F. 	It
is hereby emphasized that subject to the provisions in subsection (d) above,
               any addition or change that shall be made to the Leased Property by the
Tenant                shall be considered as the Landlord’s Property except for
systems installed                in the Leased Property by the Tenant at his expense such
as: air conditioning                systems and which can be removed from the Leased
Property without causing damage                to the Leased Property however the
Landlord shall be entitled to demand their                removal from the Tenant in
writing at the end of the lease period and if the                Tenant shall not comply
with the demand the Landlord shall be entitled to remove                them at the Tenant’s
expense. 

	 	G. 	Without
derogating from the generality of the aforesaid, the Tenant is entitled                to
install electric installations, electric points or switches and any
               installations of external or internal telephones in places intended for
this                and/or of communications between computers, provided the building
shall not be                harmed and these installations shall be performed according
to the provisions of                any law. 

9

	 	
The
Tenant is also entitled to install signs or other advertisement materials on the front of
the building or on an external wall of the building, after he first receives the written
consent of the Landlord, in places that shall be coordinated with the Landlord. 

	 	H. 	The
Landlord undertakes that until the 31st of October 2002, he shall
          give the Tenant plans to renovate the Leased Property and to perform the
          following works: 

	 	A. 	Covering
the part of the front that turns to the south part of the building           (Gliss
Street) until the entrance area of the building, according to the plans           that
are attached to the agreement that constitute an inseparable part of it and
          which are marked as appendix “C”.  

	 	B. 	Painting
the other external walls of the building and the revealed pipes.  

	 	C. 	Paving
asphalt on all of the parking area and marking parking spaces.  

	 	D. 	Repairing
and renovating external fences.  

	 	
The
Landlord undertakes that he shall start the performance of the works specified in this
subsection not later than 30.11.2002. If all the works specified in this subjection or
part of them shall not be performed and/or completed until the 31st of March
2003, for any such work as mentioned the Tenant shall have the possibility according to
his discretion: (1) to postpone, starting from the 1st of April 2003 until the
date of completion of the performance of the works as mentioned, the payment of rent to
the Landlord in the amount equal to 125% – of the cost of completing the performance
of the work as mentioned according to an appraisal of the Tenant’s appraiser, or
alternatively (2) to perform and/or finish the work as mentioned, himself and/or by
others, and the actual cost of performing and/or finishing the work as mentioned with
additional interest at the maximum rate customary at banks at the time on unauthorized
overdrafts shall be reduced from the rent paid to the Landlord according to this
agreement. 

	 	I. 	The
Landlord undertakes that during the entire period of the lease he shall do
               everything necessary so that the external appearance of the Leased
Property,                including the walls, the parking lot and the fences shall be
clean and suitable                for the Tenant’s use. 

	11.  	The
Tenant shall be entitled to put into the Leased Property devices, equipment
               and moveable furniture that are not attached to the Leased Property
itself, at                his responsibility his expense, and without the need to obtain
the                Landlord’s written agreement. 

	12.  	The
Landlord undertakes to pay with respect to the Property all of the Property
               taxes, the levies, the obligatory payments, municipal and governmental
that                apply to a owner of the Leased Property, if such taxes apply, during
the entire                lease period. 

10

	13.  	The
Landlord undertakes to pay with respect to the Leased Property all of the
               municipal and governmental taxes that apply to the Tenant of the Leased
               Property. The Tenant undertakes to pay for the water, garbage,
electricity,                telephones and all of the other payment applicable to
Tenants, during the entire                lease period for using the Leased Property. 

	14.	A.	
The Landlord undertakes to perform the day to day maintenance of the air
               conditioning system in the southern wing of the building and the Tenant
               undertakes to pay the Landlord for this maintenance as mentioned in the
amount                of NIS 2,840 for each month. This payment as mentioned shall be
paid at the                beginning of each month for which the maintenance is given
within 14 days from                the receipt of each bill. 

	 	B. 	The
parties agree and confirm that (1) the day to day maintenance of the
               building includes the day to day maintenance of the air conditioning
system that                was installed by the Tenant, security services, maintenance of
elevators and                preserving the cleanliness shall be performed at the Tenant’s
expense and                responsibility, (2) the Landlord shall perform by himself and
at his expense all                of the day to day maintenance of the building and he
shall maintain it in good                condition for its purpose, including reasonable
wear and tear in the Leased                Property, and the day to day maintenance of
the air conditioning system                installed in the southern wing of the building
as mentioned above. 

	15.	A. 	
Liability and Indemnification

	 	1. 	The
Tenant shall bear the obligation imposed on him according to any law for any
               damage or harm that might be caused to the body and/or Property of a
person or                entity including the Landlord and/or those on his behalf. The
Tenant shall be                responsible to repair at his expense any loss of damage
that shall be caused to                the building of the Leased Property and its
contents as a result of the                Tenant’s negligent action or omission or
of anyone on his behalf.  

	 	2. 	The
Tenant shall be responsible towards the Landlord and/or towards any third
               party for any bodily damage or damage to Property or damage of any kind
that                shall be caused to them as a result of the activities in the Leased
Property.  

	 	3. 	The
Tenant hereby exempts the Landlord from any responsibility for any loss
               and/or resultant damage of any kind including consequential damages and
damages                that are due to the inability to use the Leased Property due to
the loss or                damage to the Leased Property, its equipment and its contents,
if the duty to                repair the loss and/or the damage is applicable to him (the
Tenant) as mentioned                in subsection (1) above.  

	 	B. 	Insurance

	 	(1) 	The
Tenant undertakes to take out and maintain for the duration of this
               agreement the insurances specified hereafter (hereinafter: the
               “Tenant’s Insurances”):  

11

	 	(1.1) 	Insurance
of the contents of the Leased Property – including, equipment                that
serves the Leased Property owned and/or under the responsibility of the
               Tenant and which is located in the Leased Property and in its immediate
               surroundings, and any repair, change, improvement, renovation and addition
to                the Leased Property that was done and/or that shall be done by the
Tenant and/or                for him, and furniture, equipment, devices and inventories,
of any type or kind,                at reinstatement value against loss or damage as a
result of fire, smoke,                lightening, explosion, earthquake, storm, flood,
damage from liquid and the                splitting of pipes, damage as a result of
impact, damage by aircraft, strikes,                disturbances and malicious damage.  

	 	
The
insurance shall include an explicit condition according to which the insurer waives every
right of subrogation towards the Landlord provided the aforesaid regarding waiver of the
right of subrogation shall not apply to benefit a person who caused maliciously caused
the damage.

	 	(1.2) 	Third
party liability insurance according to any law, with limited liability
               that shall not be less than the amount of $5,000,000 (five million U.S.
dollars)                per event and for the insurance period. This insurance shall not
be subject to                any limitation regarding liability that as a result of fire,
explosion, shock,                lifting machines, uploading and unloading, defected
sanitary devices, poisoning,                everything damaging in food or drink, strikes
and subrogation claims by the                Institution for National Insurance. The
insurance shall be extended to include                the Landlord for his liability for
the Tenant’s actions and/or omissions,                and this is subject to a cross
liability clause according to which the insurance                shall be considered as
if it was taken out separately for each of the                individuals of the insured.  

	 	(1.3) 	Employers
liability insurance for the Tenant’s liability towards all of his
               employees that are employed by him at the liability limit of no less than
               $5,000,000 (five million U.S. dollars) per event and for the insurance
period.                This insurance shall not include any limit regarding works at
height or at                depth, work hours, contractors, sub contractors and their
employees, and                regarding the employment of youth. This insurance shall be
extended to indemnify                the Landlord if he shall be considered as the
employer of any of the                company’s employees.  

	 	(1.4) 	Insurance
of consequential damage as a result of damage covered according to                section
15 B. (1.1) above for an indemnification period that is not less than                six
months. This insurance as mentioned shall include a waiver of the
               subrogation right towards the Landlord. However the parties agree that the
               Tenant is entitled not to take out insurance according to this subsection
               provided that then the exemption stipulated in section 15 (B2) hereafter
will                apply as if this insurance was taken out.  

12

	 	(2) 	The
Tenant declares that he shall not have any claim and/or demand and/or
               lawsuit against the Landlord for damage for which he is entitled to
               indemnification according to the insurance that he took out according to
               subsection (1.1) and (1.4) above, and he hereby exempts the Landlord of
any                liability for such damage. The aforesaid regarding the exemption from
liability                shall not apply to benefit a person who maliciously caused
damage.  

	 	(3) 	The
Tenant undertakes to furnish the Landlord confirmation regarding the
               issuance of such insurance policies as mentioned legally signed by the
insurer                and this is not later than 14 days after the signing of this
agreement.  

	 	(4) 	The
Landlord undertook to take out and maintain at his expense the insurances
               specified hereafter at a legally authorized and reputable insurance
company in                Israel (hereinafter: the “Landlord’s Insurance”):  

	 	(4.1) 	Structure
insurance of the Leased Property based on its reinstatement value                against
the customary risks extended fire insurance, including loss or damage as                a
result of fire risks, smoke, lightening, explosion, earthquake, storm, flood,
               damage from liquid and the splitting of pipes, damage as a result of
impact,                damage by aircraft, breaking and entering. This insurance shall
include a                section regarding waiver of the subrogation right towards the
Tenant, provided                the provisions regarding the waiver of the right of
subrogation shall not apply                to benefit a person who maliciously caused the
damage, The purpose of this                section the term the structure of the Leased
Property shall include all of the                systems that constitute an inseparable
part of the structure and it explicitly                shall not include the contents of
the leased properties and any addition,                improvement, or extension that
were done in the leased properties by or for the                Tenant, and which are
insured by the Tenant.  

	 	(4.2) 	Third
party liability insurance for the Landlord’s duty for damage to the
               body and/or Property of any person and/or any body whatsoever, with
limited                liability that shall not be less than the amount of $5,000,000
(five million                U.S. dollars) for an insurance event and in the aggregate
for an annual                insurance period. This insurance shall not be subject to any
limitation                regarding liability that as a result of fire, explosion, shock,
lifting                machines, uploading and unloading, contractors and sub
contractors, defected                sanitary devices, poisoning, everything damaging in
food or drink, the                performance of additions and improvements in the Leased
Property strikes and                subrogation claims by the Institution for National
Insurance. The insurance                shall be extended to indemnify and/or for the
Landlord’s actions and/or                omissions and anyone on his behalf subject
to a cross liability clause.  

13

	 	(4.3) 	Employers’ liability
insurance for the Landlord’s liability towards                his employees for
damage caused while and as a result of their employment by the                Landlord at
the liability limit of no less than $5,000,000 (five million U.S.                dollars)
per event and for the insurance period. This insurance shall be                extended
to indemnify the Tenant if he shall be considered as the employer of                any
of the Landlord’s employees.  

	 	(4.4) 	Consequential
loss insurance (insurance of loss of rent, management fees and                other
costs) that shall be caused to the Landlord, as a result of damage that
               was caused to the Leased Property and/or its content and/or the courtyard
of the                Leased Property at their full value, as a result of the above
mentioned risks in                subsection (4.1) above for an indemnification period
that shall not be less than                6 months. The insurance shall included a
section regarding the waiver of the                insurer of the subrogation right
towards the Tenant and all of those acting on                its behalf (all of the
sub-Tenants on his behalf and provided that the waiver of                the subrogation
right as mentioned shall not apply to benefit a person that                maliciously
caused the damage.  

	 	
In
spite of the aforesaid it is hereby agreed that the Landlord is entitled not to take out
consequential damage insurance however the provisions in section 15 B. 5 hereafter shall
apply with respect to consequential damage as mentioned above as if insurance was taken
out for such damage.

	 	(5) 	The
Landlord declares that he shall not have any claim and/or demand and/or
               lawsuit against the Tenant for damage for which the Landlord is entitled
to                indemnification or for which he was entitled to indemnification
according to the                insurance that was taken out according to subsection
(4.1) until (4.4) above,                and he hereby exempts the Tenant from any
liability to any such damage. The                aforesaid regarding the exemption from
liability shall not apply to benefit a                person who maliciously caused the
damage.  

	 	(6) 	The
Landlord’s insurances shall include a specific condition according to
               which the insurer waives any claim and/or demand regarding the
participation of                the Tenant’s insurances. Furthermore the insurer
shall undertake that the                Landlord’s insurance policies shall not be
reduced or cancelled, unless a                prior written notice of this shall be
delivered to the Tenant 60 days in                advance.  

14

	 	(7) 	The
Landlord undertakes to fulfill the terms of the insurance policies of the
               Landlord to pay the premiums in full and on time, and to ascertain that
the                Landlord’s insurance policies shall be renewed from time to time
according                to need and they shall be valid for the entire duration of the
lease period.  

	 	(8) 	The
Landlord undertakes to furnish to the Tenant confirmation regarding the
               policies issued legally signed by the insurer and this is no later than 14
days                after the signing date of this agreement.  

	16.  	The
Tenant undertakes: –

	 	A. 	To
tend to the cleanliness of the Leased Property and its surroundings. 

	 	B. 	Not
to make and/or cause a nuisance to the Landlord and the neighbors in the
               Leased Property near him. 

	 	C. 	Taking
the purpose of the lease into consideration, to maintain the Leased
               Property in good and proper condition, not to do and not to allow anything
that                could cause damage to the Leased Property, to the building or to its
               installations insofar as this depends on him or that could cause a
nuisance to                the other Tenants in the building or any other person. 

	 	D. 	Not
to place outside of the Leased Property containers, any packages or any
               other chattels unless it is in places stipulated for this purpose in
appendix F. 

	17.  	The
Tenant shall be regarded as the sole possessor of the Leased Property during
               the entire lease period, for purposes of criminal or civil liability only,
               except if the Landlord is liable as a result of his actions or omission
with                respect to criminal or civil liability. 

	18.  	Each
of the parties of this agreement undertakes (hereinafter in sections 18 and
               19: the “Party in Breach”): –

	 	A. 	To
compensate and indemnify the other party for any damage, loss or cost that
               shall be caused to him according to a judgment as a result of a third
party                lawsuit or demand, including a lawsuit of the government or
municipal                authorities or a lawsuit of any other authorized authority, due
to an action or                omission on the part of the party in breach or at his
fault or at the fault of                anyone on his behalf, provided the other party
shall notify the party in breach                of any lawsuit, payment or damage that is
about to be caused or that was caused                and shall give him reasonable time
in advance, from the date that he was aware                of the possibility to defend
oneself against these lawsuits. 

	 	B. 	To
refund to the other party any amount that was spent by him for performing
               repairs that the party in breach should have performed according to this
               agreement. 

	 	C. 	To
refund to the other party any payment that was spent by the other party, and
               which the party in breach should have paid according to the provisions of
this                agreement. 

15

	19.	A. 	
Any payment or cost that apply according to this agreement to the party in
               breach and which the party in breach did not fully pay on time, including
any                amount of rent, linkage differences, Vat, service fees and any other
amount that                the party in breach had to pay to the other party, including
any amount, payment                or other cost that apply according to this agreement
on the party in breach such                as taxes, obligatory payments which the other
party had to pay instead of the                party in breach after a prior warning of
14 days in advance, the party in breach                must pay it to the other party
from the first date of delay and onward including                any other cost that was
caused to the other party as a result of this, with                additional linkage
differences to the index and with additional interest at the                maximum rate
customary at Israeli banks on unauthorized overdrafts including
               commissions for issuing credit or index linked loans, whichever is higher. 

	 	B. 	Each
check, deed, payment instruction etc.. shall be considered as payment, if
               they were presented for payment on time and paid. 

	20.  	At
the occurrence of one of the following events the Landlord may terminate this
               agreement and demand the immediate payment of the Tenant from the Leased
               Property, and these are the events: –

	 	A. 	The
Tenant did not pay any amount of rent or linkage differences as mentioned in
               this agreement or did not pay the taxes and the other obligatory payment
that                apply to him, or did not pay insurance premiums or any other amount
or part of                it whose payment applies to him in accordance with this
agreement, provided that                this payment was not paid as mentioned and was
not settled by him within 30 days                after he received a written demand from
the Landlord to do so, or within a                period that was determined by the
authority from which the payment demand was                received. 

	 	B. 	The
Tenant breached or abstained from complying or from fulfilling the
               provisions of sections 15 B (1.2) and (1.3) in this agreement, and within
30                days after receiving a written demand from the Landlord the Tenant did
not                repair the breach or abstained from complying or fulfilling the
demand. 

	 	C. 	A
receiver or trustee was appointed for the Tenant or a bankruptcy petition was
               filed against the Tenant and it was not cancelled within 60 days after
this                action. 

	 	D. 	If
the Tenant is a company – a liquidator was appointed for the Tenant or a
               temporary liquidator or a receiver or other similar proceedings were taken
and                they were not cancelled within 60 days after these actions. 

	 	E. 	The
Tenant ceased running his business, in a manner that materially affects his
               ability to fulfill his undertakings according to this agreement. 

	 	
Upon
the occurrence of any of the events listed above, the Landlord shall be entitled to cancel
this agreement immediately, subject to section 28 of this agreement, and to cancel the
lease under this agreement. Thus the Landlord shall be entitled after one of the events
occurred listed in sections 20 (c), (d) and (e) to return to himself and/or to receive the
Leased Property and to enter into the area of the Leased Property without any necessity to
approach the court for an eviction order or any other action and to remove any person,
object from the Leased Property, without this being considered as trespassing and without
derogating from any other claims and or remedies of the Landlord. 

16

	 	
In
addition to the Landlord’s right to cancel this lease as mentioned in this section
above and without derogating from it, the Landlord shall be entitled to sue from the
Tenant compensation for not complying with any undertaking, term or condition included in
this agreement or for not paying any amount that applies to the Tenant or to sue for
enforcement of any undertaking pursuant to this agreement. 

	 	
A
waiver of any event of a breach or more shall not be interpreted as a waiver of any other
event of a breach. 

	21.  	Upon
the occurrence of one of the event listed hereafter the Tenant may
               terminate this agreement and these are the events:- 

	 	A. 	The
Landlord breached or abstained from complying or from fulfilling the
               provisions of sections 8 (b), 10 (c), 14 regarding the day to day
maintenance of                the air conditioning system (which is installed in the
southern wing of the                building) only, 15 B (4) and 24 of this agreement,
and within 30 days after                receiving a written demand from the Tenant the
Landlord did not repair the                breach or abstained from complying or
fulfilling the demand. 

	 	B. 	A
closing order and/or demolition order and/or any order, or other decision was
               given by a body and/or corporation and/or governmental and/or municipal
               authority, due to an action or an omission of the Landlord which according
to                them does not allow for the existence of the purposes of the lease in
the Leased                Property, and this is subject to section 6 (b) of this
agreement. 

	 	C. 	The
Leased Property was transferred to a third party and after such transfer as
               mentioned the Tenant abstained from using the Leased Property as he did
prior to                the sale date. 

	 	
At
the occurrence of one of the events specified above, the Tenant shall be entitled to
cancel this agreement immediately subject to section 28 of this agreement, and to cancel
the leased that was given under it. 

	 	
In
addition to the Tenant’s right to cancel this lease as mentioned in this section
above and without derogating from it, the Tenant shall be entitled to sue from the
Landlord compensation for not complying with any undertaking, term or condition included
in this agreement or for not paying any amount that applies to the Landlord or to sue for
enforcement of any undertaking pursuant to this agreement. 

	 	
A
waiver of any event of a breach or more shall not be interpreted as a waiver of any other
event of a breach. 

	22.  	The
Tenant hereby undertakes at the end of the lease period according to this
               agreement, or at any earlier date in the event of the termination of this
               agreement as mentioned in this agreement, to vacate the Leased Property
from any                person and object that belongs to the Tenant and to transfer
possession of the                Leased Property to the Landlord or to his attorneys in
good and proper condition                clean and suitable for use, as it was when it
was delivered to the Tenant, when                the Leased Property is empty from any
person or object of the Tenant, and all of                the provisions in sections 9
and 10 (d) above shall apply to the delivery of                possession of the Leased
Property at the end of the lease. 

17

	23.  	The
Tenant undertakes to vacate the Leased Property at the date of the end of
               the lease period, and in the case of a delay the Tenant hereby undertakes
to pay                the Landlord the amount of NIS 10,000 (ten thousand NIS) per day,
with                additional linkage differences as specified in section 7 above as
agreed rent of                the Leased Property, for every day in which the Tenant
shall be in the Leased                Property after the end of the lease period, and
without the need for giving any                warning and this is without derogating
from the Landlord’s rights to                receive additional legal remedies
against the Tenant. 

	24. 	A.	
The Landlord is entitled to transfer his rights in the Leased Property at any
               time to another or to others (hereinafter: the “Intended Purchaser”)
               and the Tenant shall not refuse to such assignment as mentioned unless it
is for                reasonable reasons and subject to the fact that the Intended
Purchaser shall                accept this agreement upon himself in place of the
Landlord and subject to the                fact that no exercise notice (as defined
hereafter) has been received by the                Tenant by the time mentioned in
subsection C hereafter. 

	 	B. 	The
Landlord undertakes that if he shall wish to transfer his rights in the
               Leased Property and/or in this agreement to the Intended Purchaser he must
first                offer them to the Tenant at the same terms that Intended Purchaser
intends to                purchase them, all in accordance with the specified procedures
in this section                hereafter. 

	 	C. 	The
Landlord must deliver to the Tenant a notice of his intention to transfer
               his rights in the Leased Property by a written notice. This notice shall
specify                the nature of the rights, the price that was offered for them by
the Intended                Purchaser, the terms of payment, the name of the Intended
Purchaser, and any                other material term of the transaction according to
which the Landlord intends                to transfer his rights in the Leased Property
and/or with respect to this                agreement to the Intended Purchaser
(hereinafter: the “Offered                Terms”). The Landlord shall declare
in this notice that the offered terms                described in the notice are correct
and complete. Delivery of this notice shall                be considered as an offer to
sell his rights in the Leased Property and/or with                respect to this
agreement to the Tenant at the Offered Terms. This offer is                irrevocable
until the end of fourteen (14) days after receipt of this notice.                Within
fourteen (14) days the Tenant shall notify by a written notice to the
               Landlord if he is interested to purchase the rights being sold at the
Offered                Terms (hereinafter: the “Exercise Notice”). Once an
Exercise Notice                has been given as mentioned, the Landlord hereby
undertakes to sell the rights                being sold to the Tenant in accordance with
the Offered Terms. 

	25.	A. 	
The Tenant undertakes not to transfer this agreement or any right derived
               from this agreement, directly or indirectly and not to lease to others the
               Leased Property or any part of it and not to give or transfer to others
the                Leased Property or any part of it and not to give or transfer to other
s the use                of the Leased Property or any part of it, and not to allow or
permit the use of                the Leased Property or any benefit of it to others in
any manner whatsoever. 

18

	 	B. 	The
aforesaid shall not apply in the event of the transfer of the Tenant’s
               undertakings according to this agreement to a Tenant who is a company
under the                control of the Tenant and/or under the control of the current
shareholders of                the Tenant, and the Tenant gave a guarantee for the
undertakings of the new                Tenant to the Landlord’s satisfaction. 

	 	C. 	The
Tenant shall be entitled to lease the Leased Property or any part of it to a
               sub – Tenant provided the Landlord gave prior written consent and the
new                Tenant accepted upon himself all of the Tenant’s undertakings
according to                this agreement and in any event the Tenant shall continue to
be responsible                towards the Landlord for the fulfillment of all of his
undertakings according to                this agreement. 

	26. 	In
any event where one of the parties of this agreement shall not use his rights
          that are derived from this agreement, immediately or at all, any delay or
          extension shall not be considered a waiver, admission or consent on his part. 

	27. 	All
amounts and times mentioned in this agreement are fundamental terms of this
          agreement. 

	28. 	If
one of the parties breached this agreement by a fundamental breach or a
          fundamental term of this agreement, this agreement may be entirely cancelled
          after giving prior written notice of 30 days in advance by the other party in
          which the repair of the breach is requested and the breach was not repaired as
          required according to this agreement. The provisions of this agreement shall
not           harm the rights of any party to receive other relief and remedies
especially an           eviction order and the return of the Leased Property to the
Landlord. 

	29. 	The
Landlord undertakes not to refuse a request made by the Tenant for           unreasonable
reasons. 

	30. 	During
the duration of the lease the Tenant undertakes to allow the Landlord to           visit
the Leased Property once per month for inspection and this is following a           prior
notice of one day in advance. During the period of 180 days before the end           of
the lease period, the Tenant undertakes to allow the Landlord and/or anyone
          intended to be new Tenants in the Leased Property, to visit the Leased Property
          during acceptable hours during the day after prior coordination with the
Tenant. 

	31. 	In
order to partly ensure the Tenant’s undertakings according to this
          agreement the Tenant shall deposit in the hands of the Landlord at the signing
          of this agreement a security check to the order of the Landlord signed by the
          Tenant for the amount of NIS 3,500,000. The Landlord shall be entitled to fill
          out the missing details of the check and to collect it provided the surplus
          amount (in other words the difference between the amount of NIS 3,500,000 and
          between the amount that the Tenant owes the Landlord) that shall be collected
by           the Landlord pursuant to this check shall be returned to the Tenant within
48           hours from the time it was collected as mentioned. If after the security
check           is paid this agreement was not terminated the Tenant shall deposit in the
hands           of the Landlord a new security check to the order of the Landlord and
signed by           the Tenant for the amount of NIS 3,500,000 and the provisions of this
section           shall apply to this security check mutatis mutandis. In order to
eliminate           doubt, it is hereby clarified that if the security check shall be
stolen from           the Landlord, the Landlord shall compensate the Tenant for any
amount that was           collected according to this check. 

19

	 	
If
at the New Date the new fundamental rent amount shall be determined according section 7
(g) of this agreement, a new security check shall be given against the receipt of a
security check held by the Landlord, made out to the order of the Landlord and signed by
the Tenant in the amount equal to 12 months of rent according to the new fundamental rent
amount with additional Vat. The remaining provisions of this section shall apply to this
security check mutatis mutandis. 

	32.  	In
this agreement singular shall include plural and visa versa and male also
               includes female and visa versa. However all of the Tenant’s
undertakings or                any other duty that applies to him shall be jointly or
separately. 

	33. 	A.	
Stamp duty that applies to this agreement shall be paid by the Tenant and the
               Landlord in equal shares between them. 

	 	B. 	Lawyer’s
fees for drafting this agreement shall be paid by each of the two                parties
to their own lawyer. 

	34. 	This
agreement, including all of its appendixes expresses all of the agreed           terms
between the parties. All of the promises, guarantees, agreements whether
          written or oral, undertakings or representations regarding this agreement that
          were given or that were made by the parties before this agreement was executed
          are null and void and they cannot add to the obligations and rights stipulated
          in this agreement or that are derived from it, cannot derogate from them or
          change them, and the parties shall not be bound by them starting from the date
          of this agreement. This agreement cannot grant any third party any right or
          remedy pursuant to this agreement. 

	35. 	Claims
with respect to this agreement or that are derived from this agreement           shall be
filed only to the court that has material jurisdiction situated in Tel           Aviv. 

	36. 	The
parties’ addresses for the purpose of this agreement are as specified           in
the preamble of this agreement. Any notice that shall be sent by any party to
          the other party by registered mail, according to the addresses mentioned above,
          shall be considered as if it arrived to its destination within 72 hours. 

	 	
Additional
comments:-

	 	
 

	 	
 

	 	
 

	 	
 

	 	
 

20

In witness whereof the
parties have signed: – 

	A.Z. Baranovitz – Properties and Leasing Ltd.

Stamp and signature
——————————————

The Landlord		Eltak Ltd.

Stamp and signature
——————————————

The Tenant

21

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