Document:

Exhibit 10Y

                                                                 April  16, 2004

Decorator Industries, Inc.
10011 Pines Boulevard, Suite 201
Pembroke Pines, Florida 33024-06167

Gentlemen:

         This letter constitutes an agreement (the "Agreement") by and between
WASHINGTON MUTUAL, FA (the "Bank"), and DECORATOR INDUSTRIES, INC., a
Pennsylvania corporation (the "Borrower"), pertaining to certain loans and other
credit which Bank has made and/or may from time to time hereafter make available
to Borrower.

         In consideration of all present and future loans, advances and other
credit from time to time made available by Bank to or in favor of Borrower,
including, without limitation, a FIVE MILLION AND NO/100 DOLLAR ($5,000,000.00)
revolving line of credit ("Revolving Line") as evidenced by a Revolving
Promissory Note of even date herewith (the "Note") maturing June 30, 2007 (the
"Maturity Date"), made available by Bank to Borrower, and in consideration of
all present and future liabilities, obligations and indebtedness of Borrower to
Bank, howsoever created, evidenced, existing or arising, whether direct or
indirect, absolute or contingent, joint or several, now or hereafter existing or
arising, or due or to become due (collectively, the "Liabilities"), Borrower
represents, warrants, covenants and agrees as follows:

         1. Each loan, advance or other extension of credit made by Bank to or
otherwise in favor of Borrower shall be evidenced by and subject to the Note and
any other agreement or evidence of indebtedness acceptable to Bank, in each
case, executed and delivered by Borrower unto Bank. The funding and disbursement
of any loan or advance, and the extension of any other credit, to or in favor of
Borrower shall be subject to the execution and/or delivery unto Bank such
documents, instruments, agreements, opinions and certificates as Bank may
reasonably require, and shall be further subject to the satisfaction of such
other conditions and requirements as Bank, and its counsel, may from time to
time require (the Note and any and all other notes, instruments, documents and
agreements at any time evidencing, governing, securing or otherwise relating to
any of the Liabilities are herein collectively called the "Loan Documents").

         2. Borrower hereby represents and warrants, and such representations
and warranties shall be deemed to be continuing representations and warranties
during the entire life of this Agreement, and thereafter, so long as any
Liabilities remain unpaid and outstanding:

         (a)      It is a corporation duly organized, validly existing and in
                  good standing under the laws of the State of Pennsylvania, it
                  is duly qualified and authorized to do business in Florida and
                  in each other jurisdiction where the character of its assets
                  or the nature of its activities makes such qualification
                  necessary, and it has the legal power and authority to own its
                  property and assets and to carry out its business as now being
                  conducted in each such jurisdiction wherein such qualification
                  is necessary; execution, delivery and performance of this

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                  Agreement, and any and all other Loan Documents to which
                  Borrower is a party or by which it is otherwise bound, are
                  within Borrower's corporate powers and authorities, have been
                  duly authorized by all requisite corporate or other necessary
                  or appropriate action, and are not in contravention or
                  violation of law or the terms of Borrower's Articles of
                  Incorporation or Bylaws, and do not require the consent or
                  approval of any governmental body, agency or authority; and
                  this Agreement, and any other Loan Documents contemplated
                  hereby, when executed, issued and/or delivered by Borrower, or
                  by which Borrower is otherwise bound, will be valid and
                  binding and legally enforceable against Borrower in accordance
                  with their terms.

         (b)      The execution, delivery and performance of this Agreement and
                  any other Loan Documents required under or contemplated by
                  this Agreement to which Borrower is a party or by which it is
                  otherwise bound, and the issuance of this Agreement and any
                  such other Loan Documents by Borrower, and the borrowings and
                  other transactions contemplated hereby and thereby, are not in
                  contravention or violation of the unwaived terms of any
                  indenture, agreement or undertaking to which Borrower is a
                  party or by which it or any of its property or assets is
                  bound, and will not result in the creation or imposition of
                  any lien or encumbrance of any nature whatsoever upon any of
                  the property or assets of Borrower, except to or in favor of
                  Bank.

         (c)      No litigation or other proceeding before any court or
                  administrative agency is pending, or, to the knowledge of
                  Borrower or any of its officers, is threatened against
                  Borrower, the outcome of which could materially impair
                  Borrower's financial condition or its ability to carry on its
                  business or its ability to pay and perform its liabilities and
                  obligations hereunder or otherwise in respect of the
                  Liabilities.

         (d)      There are no security interests in, liens, mortgages, or other
                  encumbrances on any of Borrower's property or assets, except
                  Permitted Encumbrances (as hereinafter defined).

         (e)      There exists no Event of Default (as hereinafter defined), or
                  any condition or event which, with the giving of notice or the
                  passage of time, or both, would constitute an Event of Default
                  (as such condition or event is herein called a "Default")
                  under any of the Liabilities.

         (f)      The most recent financial statements with respect to Borrower
                  delivered to Bank fairly present the financial condition of
                  Borrower as of the date thereof and for the period(s) covered
                  thereby in accordance with generally accepted accounting
                  principles consistently applied ("GAAP"), and since the date
                  of said statements, there has been no material adverse change
                  in the condition (financial or otherwise) of Borrower.

         3. So long as Bank shall have any commitment or obligation, if any, to
make any loans or extend credit to or in favor of Borrower, and so long as any
Liabilities remain unpaid and outstanding, Borrower covenants and agrees that it
shall:

         (a)      Furnish to Bank, or cause to be furnished to Bank, in each
                  case, in form and detail and on a reporting basis satisfactory
                  to Bank, the following:

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                  (i)      as soon as available, and in any event not later than
                           ninety (90) days after the close of each fiscal year
                           of Borrower, beginning with the fiscal year ending
                           December 31, 2003, audited financial statements of
                           Borrower, containing the balance sheet of Borrower as
                           of the close of each such fiscal year, statements of
                           income and retained earnings and a statement of cash
                           flows for each such fiscal year, and such other
                           comments and financial details as are usually
                           included in similar reports, including any management
                           letter(s). Such financial statements shall be
                           prepared in accordance with GAAP, shall be in such
                           detail as Bank may reasonably require, and shall be
                           reviewed by independent certified public accountants
                           of recognized standing selected by Borrower and
                           acceptable to Bank;

                  (ii)     as soon as available, and in any event not later than
                           sixty (60) days after the close of each fiscal year
                           of Borrower, beginning with fiscal year ending
                           December 31, 2003, Borrower's annual projections,
                           including, but not limited to, Borrower's projections
                           for sales, net income, capital expenditures and
                           redemption of Borrower's stock;

                  (iii)    as soon as available, and in any event not later than
                           forty-five (45) days after and as of close of each
                           fiscal quarter (except the fiscal year end) of each
                           fiscal year of Borrower, beginning with the fiscal
                           quarter ending April 1, 2004, financial statements of
                           Borrower, containing the balance sheet of Borrower as
                           of the close of each such fiscal quarter, statements
                           of income and retained earning and a statement of
                           cash flows for Borrower for such fiscal quarter and
                           for the portion of the fiscal year of Borrower
                           through the end of the fiscal quarter then ending,
                           and such other comments and financial details as are
                           usually included in similar reports. Such financial
                           statements shall be prepared by Borrower in
                           accordance with GAAP, and shall be certified as to
                           accuracy and fairness by an authorized officer of
                           Borrower;

                  (iv)     simultaneous with the delivery to Bank of the
                           respective financial statements required in
                           SUB-SECTIONS (I) AND (III) above, quarterly
                           compliance certificates in form and detail
                           satisfactory to Bank, certified by an authorized
                           officer of Borrower, certifying that, as of the date
                           thereof, to the best of each such authorized
                           officer's knowledge, no Default or Event of Default
                           shall have occurred and be continuing or exist, or if
                           any Default or Event of Default shall have occurred
                           and be continuing or exist, specifying, in detail,
                           the nature and period of existence thereof and any
                           action taken or proposed to be taken by Borrower in
                           respect thereof, and also certifying as to whether
                           Borrower is in compliance with the financial
                           covenants contained in SECTIONS 3(G) AND 3(H) of this
                           Agreement (which certificate shall set forth, in
                           reasonable detail, Borrower's calculations and the
                           resultant ratios or financial tests determined
                           thereunder);

                  (v)      as soon as possible, and in any event within three
                           (3) Business Days after becoming aware of the
                           occurrence or existence of any Default or Event of
                           Default, or of any other condition or occurrence

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                           which has had or could reasonably be expected to have
                           a materially adverse effect upon Borrower's business,
                           properties, or financial condition or upon Borrower's
                           ability to comply with its obligations hereunder, a
                           written statement of an authorized officer of
                           Borrower setting forth the details of such Default or
                           Event of Default, or such other condition or
                           occurrence, and the action which Borrower has taken
                           or caused to be taken, or proposes to take or cause
                           to be taken with respect thereto; and

                  (vi)     promptly, at such times as Bank may reasonably
                           require, in form and detail satisfactory to Bank,
                           such other information and reports as may be required
                           under the terms of any Loan Documents or as Bank may
                           reasonably request from time to time.

         (b)      Keep proper books of record and account in which full and
                  correct entries shall be made of all of its financial
                  transactions and its assets and businesses so as to permit the
                  presentation of financial statements (including, without
                  limitation, those financial statements to be delivered to Bank
                  pursuant to SECTION 3(A) above) prepared in accordance with
                  GAAP; and permit Bank, or its representatives, at reasonable
                  times and intervals, to visit all of Borrower's offices and to
                  make inquiries as to Borrower's respective financial matters
                  with its respective directors, officers, employees, and
                  independent certified public accountants.

         (c)      Permit Bank, through Bank's authorized attorneys, accountants
                  and representatives, to inspect, audit and examine Borrower's
                  books, accounts, records, ledgers and assets and properties of
                  every kind and description, wherever located, at all
                  reasonable times during normal business hours, upon written
                  request of Bank. Borrower agrees to reimburse Bank for all
                  reasonable costs and expenses incurred by Bank in connection
                  with such inspections, examinations and audits, and to pay to
                  Bank such fees as Bank may reasonably charge in respect of
                  such inspections, examinations and audits, or as otherwise
                  mutually agreed upon by Borrower and Bank if such inspections,
                  examinations and audits are conducted due to any Event of
                  Default by Borrower.

         (d)      The Borrower will maintain, with respect to its business and
                  properties, insurance at all times by insurance companies of
                  nationally recognized stature and responsibility which the
                  Borrower believes to be financially sound, of a character
                  usually insured by corporations engaged in the same or a
                  similar business similarly situated against loss or damage of
                  the kinds and in the amounts customarily insured against and
                  for by such corporations, and carry or cause to be carried,
                  with such insurers in customary amounts (with customary
                  deductibles), such other insurance, including public liability
                  insurance as is usually carried by corporations engaged in the
                  same or a similar business similarly situated: provided,
                  however, that all insurance maintained pursuant to this
                  paragraph shall be carried in amounts sufficient to prevent
                  the Borrower from incurring liability as a co-insurer under
                  law or the terms of the applicable policy or policies.

         (e)      Pay and discharge promptly when due: all taxes, assessments,
                  and governmental charges and levies imposed upon Borrower, its
                  income, or any of its properties, before the same shall become
                  delinquent; and provided, however, that none of the foregoing
                  need to be paid while the same is being contested in good

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                  faith by appropriate proceedings diligently conducted so long
                  as adequate reserves shall have been established in accordance
                  with GAAP with respect thereto. The Borrower will file all
                  federal, state and local tax returns and all other tax reports
                  as required by law.

         (f)      Do or cause to be done all things necessary to preserve and
                  keep in full force and effect Borrower's corporate existence,
                  rights and franchises and comply with all applicable laws
                  where failure to do so has had or could reasonably be expected
                  to have a material adverse effect upon Borrower's business,
                  properties, or financial condition or upon Borrower's ability
                  to comply with its obligation hereunder; continue to conduct
                  and operate its business substantially as conducted and
                  operated during the present and preceding calendar year; at
                  all times maintain, preserve and protect all franchises and
                  trade names and preserve all the remainder of its property and
                  keep the same in good repair, working order and condition; and
                  from time to time make, or cause to be made, all needed and
                  proper repairs, renewals, replacements, betterments and
                  improvements thereto so that the business carried on in
                  connection therewith may be properly and advantageously
                  conducted at all times.

         (g)      Maintain at all times, an Interest Coverage Ratio of not less
                  than 5.00 to 1.00, measured quarterly on a trailing twelve
                  (12) month basis.

                  "Interest Coverage Ratio" shall be determined by Bank in its
                  reasonable discretion by dividing (a) the sum of (i)
                  Borrower's Net Income before taxes, plus (ii) depreciation,
                  plus (iii) amortization, plus (iv) interest expenses by (b)
                  Interest Expenses.

                  "Interest Expenses" shall mean, for the period in question,
                  the sum of all of Borrower's interest payments associated with
                  all indebtedness for borrowed money (including, without
                  limitation, capital lease obligations, subordinated debt, and
                  unreimbursed drawings under letters of credit) or evidenced by
                  a note, bond, debenture or similar instrument.

                  "Net Income" shall mean the net income (or net loss) of
                  Borrower, for the period in question, after giving effect to
                  deduction or provision for all operating expenses, all
                  reserves (including reserves for deferred taxes) and all other
                  proper deductions all determined in accordance with GAAP
                  applied on a consistent basis.

         (h)      Maintain a Leverage Ratio of not more than 1.10 to 1.00,
                  measured quarterly.

                  Leverage Ratio shall be determined by Bank in its reasonable
                  discretion by dividing Borrower's Total Liabilities by
                  Borrower's Total Shareholders' Equity.

                  "Total Liabilities" shall mean all liabilities of Borrower,
                  including capitalized leases and all reserves for deferred
                  taxes and other deferred sums appearing on the liabilities
                  side of a balance sheet of Borrower, in accordance with GAAP
                  applied on a consistent basis.

                  "Total Shareholders' Equity" shall mean, at any time, the sum
                  of: (i) the par or stated value of all outstanding capital
                  stock, plus (ii) capital surplus, plus (iii) retained earnings

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                  after deducting shares which have been reacquired by the
                  issuer, whether such reacquired shares constitute treasury
                  shares or otherwise, as would appear on a consolidated balance
                  sheet of the Borrower prepared as at such date in accordance
                  with the GAAP applied on a consistent basis.

         (i)      Take all actions and fulfill all conditions necessary to
                  maintain any and all plans in substantial compliance with
                  applicable requirements of ERISA, the Code, and all applicable
                  foreign law, if any, until such Plans are terminated, and the
                  liabilities discharged thereof, in accordance with applicable
                  law. No domestic Pension Plan (other than a Multiemployer
                  plan) will incur any accumulated funding deficiency (within
                  the meaning of Section 412 of the Code), and no foreign
                  Pension Plan will be in violation of any funding requirement
                  imposed by applicable foreign law, which deficiency or
                  violation would or would be reasonably likely to, materially
                  adversely affect the business, earnings, prospects,
                  properties, or condition (financial or otherwise) of the
                  Borrower.

                  "Plan" shall mean any "employee benefit plan" (within the
                  meaning of Section 3 (3) of ERISA) that the Borrower
                  maintains, contributes to, or is obligated to contribute to
                  for the benefit of employees or former employees of the
                  Borrower.

                  "ERISA" shall mean the Employee Retirement Income Security Act
                  of 1974, as amended from time to time, and any successor
                  statue, together with the rules and regulations there under.

                  "Code" shall mean the Internal Revenue Code of 1986, as
                  amended from time to time, and any successor statue, together
                  with the rules and regulations thereunder.

                  "Multiemployer Plan" shall mean any Plan that is a
                  "multiemployer plan" within the meaning of Section 4001 (a)(3)
                  of ERISA.

         (j)      Comply in all material respects with all applicable
                  Environmental Laws, and maintain all material permits,
                  licenses and approvals required under applicable Environmental
                  Laws, where the failure to do so could have a material adverse
                  effect upon the business, operations, condition (financial or
                  otherwise) performance or properties of Borrower, or could
                  have a material adverse effect upon the ability of Borrower to
                  perform its obligations under this Agreement or any of the
                  other Loan Documents, or could materially adversely affect the
                  enforceability of this Agreement or any of the other Loan
                  Documents; and promptly provide to Bank, immediately upon
                  receipt thereof, copies of any material correspondence,
                  notice, pleading, citation, indictment, complaint, order,
                  decree, or other document from any source asserting or
                  alleging a violation of any Environmental Laws by Borrower, or
                  of any circumstance or condition which requires or may require
                  a financial contribution by Borrower, or a clean-up, removal,
                  remedial action or other response by or on behalf of Borrower
                  under applicable Environmental Law(s), or which seeks damages
                  or civil, criminal, or punitive penalties from Borrower for
                  any violation or alleged violation of any Environmental Law(s)

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                  by Borrower. Borrower hereby indemnifies, saves and holds
                  Bank, and any of Bank's past, present and future officers,
                  directors, shareholders, employees, representatives and
                  consultants, harmless from any and all losses, damages,
                  suites, penalties, costs, liabilities and expenses (including,
                  without limitation, reasonable legal expenses and attorneys'
                  fees) incurred or arising out of any claim, loss or damage of
                  any property, injuries to or death of any persons,
                  contamination of or adverse effects on the environment, or
                  other violation of any applicable Environmental Law(s), in any
                  case, caused by Borrower, or in any way related to any
                  property owned or operated by Borrower, or due to any acts of
                  Borrower, or any of its officers, directors, shareholders,
                  employees, consultants and/or representations; provided,
                  however, that the foregoing indemnification shall not be
                  applicable, and Borrower shall not be liable for any such
                  losses, damages, suits, penalties, costs, liabilities or
                  expenses, to the extent (but only to the extent) the same
                  arise or result from any gross negligence or willful
                  misconduct of Bank or any of its agents or employees.

                  "Environmental Laws" shall mean all laws, codes, ordinances,
                  rules, regulations, orders, decrees and directives issued by
                  federal, state, local, foreign or other governmental or
                  quasi-governmental authority or body (or any agency,
                  instrumentality or political subdivision thereof) pertaining
                  to hazardous or toxic materials, including without limitation,
                  any hazardous materials or wastes, toxic substances,
                  flammable, explosive or radioactive materials, asbestos,
                  and/or other similar materials; any so-called "superfund" or
                  "superlien" law pertaining to hazardous or toxic materials on
                  or about any property at any time owned, leased or otherwise
                  used by Borrower, or any portion thereof, including, without
                  limitation, those relating to soil, surface, subsurface
                  groundwater conditions and the condition of the ambient air;
                  and any other federal, state, foreign or local statute, law,
                  ordinance, code, rule, regulation, order or decree regulating,
                  relating to, or imposing liability or standards of conduct
                  concerning, any hazardous, toxic, radioactive, flammable or
                  dangerous waste, substance or material, as now or at any time
                  hereafter in effect.

         4. So long as Bank shall have any commitment or obligation, if any, to
make any loans or extend credit to or in favor of Borrower, and so long as any
Liabilities remain unpaid and outstanding, Borrower covenants and agrees that it
shall not, without the prior written consent of Bank:

         (a)      Create, incur, assume or suffer to exist any mortgage, pledge,
                  encumbrance, security interest, lien or charge of any kind
                  upon any of its property or assets (including, without limit,
                  any charge upon property purchased or acquired under a
                  conditional sales or other title retaining agreement or lease
                  required to be capitalized under GAAP), whether now owned or
                  hereafter acquired, other than the following (collectively,
                  "Permitted Encumbrances"):

                  (i)      liens, mortgages, security interests and encumbrances
                           to or in favor of Bank;

                  (ii)     liens for taxes, assessments or other governmental
                           charges incurred in the ordinary course of business
                           and for which no interest, late charges or penalties
                           which in aggregate do not exceed Fifty Thousand and
                           No/100 Dollars ($50,000.00), are attaching or which
                           are being contested in good faith by appropriate
                           proceedings diligently pursued and, if requested by
                           Bank, bonded in an amount and manner satisfactory to
                           Bank;

                  (iii)    liens, not delinquent, created by statute in
                           connection with workers' compensation, unemployment

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                           insurance, social security, old age pensions (subject
                           to the applicable provisions of the Agreement) and
                           similar statutory obligations;

                  (iv)     liens in favor of mechanics, materialmen, carriers,
                           warehousemen or other like statutory or common law
                           liens securing obligations incurred in good faith in
                           the ordinary course of business that are not yet due
                           and payable;

                  (v)      minor encumbrances or imperfections of title
                           consisting of existing or future zoning restrictions,
                           existing recorded rights-of-way, existing recorded
                           easements, existing recorded private restriction or
                           existing or future public restrictions on the use of
                           real property, none of which (individually or in the
                           aggregate) materially impairs, or would materially
                           impair, the present or future use of such property in
                           the operation of the business for which it is used,
                           or would be violated in any material respect by any
                           existing or proposed structure or land use or would
                           have a material adverse effect on the sale or lease
                           of such property, or render title thereto
                           unmarketable;

                  (vi)     purchase money security interests to secure purchase
                           money indebtedness permitted under SECTION 4(B)(III)
                           of this Agreement, so long as such purchase money
                           security interests (A) arise substantially
                           contemporaneously with the purchase or acquisition of
                           the respective property or assets encumbered by and
                           subject to such purchase money security interests,
                           (B) do not at any time encumber any property or
                           assets other than the respective property or assets
                           financed by the respective purchase money
                           indebtedness, and (C) secure only the respective
                           purchase money indebtedness incurred to finance the
                           purchase or acquisition of such property or assets;

                  (vii)    purchase money mortgages grated to third-party
                           institutional lenders to secure purchase money
                           indebtedness so long as such purchase money mortgages
                           (A) arise substantially contemporaneously with the
                           purchase or acquisition of corporate owned and
                           operated real estate, and (B) secure only the
                           respective purchase money indebtedness incurred to
                           finance the purchase or acquisition of such property
                           or assets;

                  (viii)   any liens and encumbrances existing as of the date of
                           this Agreement, as more particularly identified in
                           SCHEDULE 4(A) attached hereto, and

                  (ix)     any other liens agreed or consented to, in writing,
                           by Bank.

         (b)      Incur, create, assume or permit to exist any indebtedness or
                  liability on account of deposits or advances or any
                  indebtedness or liability for borrowed money, or any other
                  indebtedness or liability evidenced by notes, bonds,
                  debentures or similar obligations, or any other indebtedness
                  whatsoever, except for (i) the Liabilities, (ii) existing
                  indebtedness to the extent set forth on attached SCHEDULE 4(B)
                  attached hereto, (iii) purchase money indebtedness not to
                  exceed Five Hundred Thousand and No/100 Dollars ($500,000.00)
                  in aggregate principal amount each fiscal year of Borrower

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                  incurred to finance Borrower's purchase or acquisition of
                  capital assets (whether pursuant to a loan, capital lease or
                  otherwise); (iv) unsecured trade indebtedness incurred and
                  paid in the ordinary course of business of Borrower or another
                  "Person" (as defined below) acquired by Borrower; (v)
                  contingent indebtedness to the extent permitted by SECTION
                  4(D) of this Agreement, (vi) indebtedness secured by Permitted
                  Encumbrances, and (vii) lease obligations (whether in respect
                  of capitalized leases, operating leases or otherwise), not
                  otherwise disclosed in SCHEDULE 4(B) attached hereto, or
                  (viii) indebtedness incurred for the acquisition of corporate
                  real estate to the extent permitted by SECTION 4(A)(VII).
                  "Person" shall mean any individual, corporation, partnership,
                  limited liability company, trust, incorporated or
                  unincorporated organization, joint venture, joint stock
                  company, government, or any agency or political subdivision
                  thereof, or any other entity of any kind.

         (c)      Make loans, advances or extensions of credit to any Person,
                  except, without duplication, (i) employees of Borrower in an
                  unpaid principal amount not to exceed One Hundred Thousand and
                  No/100 Dollars ($100,000.00), in aggregate, at any time, (ii)
                  sales on open account in the ordinary course of business, and
                  (iii) other loans, advances and extensions of credit in the
                  ordinary course of business in an unpaid principal amount not
                  to exceed Two Hundred Fifty Thousand and No/100 Dollars
                  ($250,000.00), in aggregate, at any time.

         (d)      Guarantee or otherwise, directly or indirectly, in any way be
                  or become responsible for obligations of any other Person,
                  whether by agreement to purchase the indebtedness of any other
                  Person, agreement for the furnishing of funds to any other
                  Person through the furnishing of goods, supplies or services,
                  by way of stock purchase, capital contribution, advance or
                  loan, for the purpose of paying or discharging (or causing the
                  payment or discharge of) the indebtedness of any other Person,
                  or otherwise, except (i) guaranties in favor of Bank; and (ii)
                  the endorsement of negotiable instruments in the ordinary
                  course of business for deposit or collection.

         (e)      Subordinate any indebtedness due to it from a Person to
                  indebtedness of other creditors of such Person.

         (f)      Sell, lease (as lessor), transfer or otherwise dispose of
                  properties and assets, except as to the sale of inventory and
                  equipment in the ordinary course of business; change its name,
                  consolidate with or merge into any other corporation, permit
                  any other corporation to merge into it except as set forth in
                  SECTION 4(K) hereof, enter into any reorganization or
                  recapitalization, or reclassify its capital stock, or enter
                  into any sale-leaseback transaction.

         (g)      Allow any fact, condition or event to occur or exist with
                  respect to any employee pension or profit sharing plan
                  established or maintained by it which might constitute grounds
                  for termination of any such plan or for the court appointment
                  of a trustee to administer any such plan; or permit any such
                  plan to be the subject of termination proceedings (whether
                  voluntary or involuntary) from which termination proceedings
                  there may result in a liability of Borrower to the "PBGC" (as
                  defined below) which, in the opinion of Bank, will have a
                  materially adverse effect upon the operations, business,
                  property, assets, financial condition or credit of Borrower.
                  "PBGC" shall mean the Pension Benefit Guarantee Corporation
                  established pursuant to Subtitle A of Title IV of ERISA, or
                  any successor corporation established under ERISA.

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         (h)      Furnish Bank with any certificate or other document that
                  contains any untrue statement of a material fact or omits to
                  state a material fact necessary to make such certificate or
                  document not misleading in light of the circumstances under
                  which it was furnished.

         (i)      Apply any of the proceeds of any loan, advance or other
                  extension of credit by Bank to or in favor of Borrower, to the
                  purchase or carrying of any "margin stock" within the meaning
                  of Regulation U of the Board of Governors of the Federal
                  Reserve System, or any regulations, interpretations or rulings
                  thereunder.

         (j)      Make Capital Expenditures, excluding acquisitions of real
                  property, shall not exceed One Million Five Hundred Thousand
                  and No/100 Dollars ($1,500,000.00) annually.

                  Capital Expenditures shall mean with respect to any Person,
                  all expenditures made and liabilities incurred for the
                  acquisition of assets which are not, in accordance with GAAP,
                  treated as expense items for such person in the year made or
                  incurred or as a prepaid expense applicable to a future year
                  or years.

         (k)      Shall not participate in any Acquisition of any Person,
                  individually or in the aggregate, in excess of Five Million
                  and No/100 Dollars ($5,000,000.00).

         5. An "Event of Default" shall be deemed to have occurred or exist
under this Agreement upon the occurrence and/or existence of any of the
following conditions or events:

         (a)      Borrower shall fail to pay the principal interest on or shall
                  otherwise fail to pay any other amount owing by Borrower to
                  Bank, when due, under any of the Liabilities, and such default
                  in payment shall continue unremedied or uncured beyond any
                  applicable period of grace provided with respect thereto, if
                  any, in the relevant Loan Document(s);

         (b)      any representation, warranty, certification or statement made
                  or deemed to have been made by Borrower herein, or by any
                  Person(s) (including, without limit, Borrower) in any
                  certificate, financial statement or other document or
                  agreement delivered by or on behalf or Borrower in connection
                  with the Liabilities or any of the Loan Documents, shall prove
                  to be untrue in any material respect;

         (c)      Borrower shall fail to observe or perform any condition,
                  covenant or agreement of Borrower, set forth in SECTION 3(a)
                  hereof, for a period exceeding fifteen (15) days;

         (d)      Borrower shall fail to observe or perform any condition,
                  covenant or agreement of Borrower, set forth in SECTION 4
                  hereof, for a period exceeding five (5) days;

         (e)      Borrower shall fail to observe or perform any condition,
                  covenant or agreement of Borrower set forth herein;

         (f)      Borrower shall fail to observe or perform any condition,
                  covenant or agreement of Borrower set forth in any other Loan
                  Document (other than as provided in SUBPARAGRAPHS (A) AND (C)
                  ABOVE), and such default shall remain unremedied or uncured

                                       10
<PAGE>

                  beyond any applicable period or grace or cure, if any,
                  provided with respect thereto;

         (g)      if there shall be any change, for any reason whatsoever, in
                  the management, including, without limit to, the termination
                  of employment or title of William A. Bassett as Chairman and
                  CEO, or control of Borrower which, in the reasonable
                  discretion of Bank, could have a material adverse effect upon
                  the business, operations or condition (financial or otherwise)
                  of Borrower;

         (h)      whenever Bank, in good faith, deems the prospect of payment or
                  performance of any of the Liabilities to be impaired; or

         (i)      upon the occurrence or existence of any "Default" or "Event of
                  Default", as the case may be, set forth in any other Loan
                  Document.

         6. Upon the occurrence and at any time during the continuance or
existence of any Event of Default, Bank may give notice to Borrower declaring
all outstanding Liabilities to be due and payable, whereupon all such
Liabilities then outstanding shall immediately become due and payable, without
further notice or demand, and any commitment or obligation, if any, on the part
of Bank to make loans or otherwise extend credit to or in favor of Borrower
shall immediately terminate. Further, upon the occurrence or at any time during
the continuance or existence of any Event of Default hereunder, Bank may
collect, deal with and dispose of all or any part of any security in any manner
permitted or authorized by the Florida Uniform Commercial Code or other
applicable law (including public or private sale), and after deducting expenses
(including, without limitation, reasonable attorneys' fees and expenses), Bank
may apply the proceeds thereof in part or full payment of any of the
Liabilities, whether due or not, in any manner or order Bank elects. In addition
to the foregoing, upon the occurrence and at any time during the continuance or
existence of any Event of Default hereunder, Bank may exercise any and all
rights and remedies available to it as a result thereof, whether by agreement,
by law or otherwise.

         7. BORROWER HEREBY ACKNOWLEDGES AND AGREE THAT BORROWER'S COMPLIANCE
WITH THE TERMS AND CONDITIONS SET FORTH HEREIN, AND THE ABSENCE OF ANY EVENT OF
DEFAULT HEREUNDER, SHALL NOT, IN ANY WAY WHATSOEVER, LIMIT, RESTRICT OR
OTHERWISE AFFECT OR IMPAIR BANK'S RIGHT OR ABILITY TO MAKE DEMAND FOR PAYMENT OF
ANY OR ALL OF THE LIABILITIES WHICH MAY BE ON A DEMAND BASIS AT ANY TIME IN
BANK'S SOLE AND ABSOLUTE DISCRETION, WITH OR WITHOUT REASON OR CAUSE, AND THE
EXISTENCE OF ANY EVENT OF DEFAULT HEREUNDER SHALL NOT BE THE SOLE REASON OR
BASIS FOR ENABLING BANK TO MAKE DEMAND FOR PAYMENT OF ALL OR ANY PART OF SUCH
LIABILITIES.

         8. No forbearance on the part of the Bank in enforcing any of its
rights or remedies under this Agreement or any other Loan Document, nor any
renewal, extension or rearrangement of any payment or covenant to be made or
performed by Borrower hereunder or any such other Loan Document, shall
constitute a waiver of any of the terms of this Agreement or such Loan Document
or of any such right or remedy.

         9. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida.

         10. All covenants, agreements, representations and warranties by or on
behalf of Borrower made in connection with this Agreement and any other Loan

                                       11
<PAGE>

Documents shall survive the borrowing hereunder or thereunder and shall be
deemed to have been relied upon by Bank. All statements contained in any
certificate or other document delivered to Bank at any time by or on behalf of
Borrower pursuant hereto shall constitute representations and warranties by
Borrower.

         11. Borrower agrees that it will pay all costs and expenses incurred by
Bank in connection with preparation of this Agreement and any other Loan
Documents contemplated hereby, including, without limitation, reasonable
attorneys' fees and distributions of counsel for the Bank.

         12. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and assigns; provided,
however, that Borrower shall not assign or transfer any of its rights or
obligations hereunder or otherwise in respect of any of the Liabilities without
the prior written consent of Bank.

         13. BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE LIABILITIES.

                   [EXECUTIONS APPEAR ON THE FOLLOWING PAGES]

                                       12
<PAGE>

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

                                               DECORATOR INDUSTRIES, INC.,
                                               a Florida corporation

                                               By:  /s/ Michael Solomon
                                                    ----------------------------
                                                    Vice President and Treasurer

Sworn to and subscribed before me this 16 day of April, 2004 by Michael Solomon,
as the Vice President and Treasurer, of DECORATOR INDUSTRIES, INC., a Florida
corporation, on behalf of the corporation. I certify that: (a) I am the duly
authorized and licensed captain of "Risky Business" (the "Vessel") described
above; and (b) the Vessel was outside the territorial limits of the State of
Florida at a longitude of 80 00.926 W and a latitude of 26 06.126N at the time
of the execution and delivery of this Agreement.

                                                    /s/ Jason M. Roe
                                                    ----------------------------
                                                    Captain of Vessel
                                                    Print Name: Jason M. Roe
                                                    License Number: 1059705

                                               BANK:

                                               WASHINGTON MUTUAL BANK, FA

                                               By:  /s/ Douglas E. Roberts
                                                    ----------------------------
                                                    Douglas E. Roberts,
                                                    Vice President

Sworn to and subscribed before me this 16 day of April, 2004 by Douglas E.
Roberts, Vice President of WASHINGTON MUTUAL BANK, FA, on behalf of the bank. I
certify that: (a) I am the duly authorized and licensed captain of "Risky
Business" (the "Vessel") described above; and (b) the Vessel was outside the
territorial limits of the State of Florida at a longitude of 80 00.926 W and a
latitude of 26 06.126N at the time of the execution and delivery of this
Agreement.

                                                    /s/ Jason M. Roe
                                                    ----------------------------
                                                    Captain of Vessel
                                                    Print Name: Jason M. Roe
                                                    License Number: 1059705

                                       13
<PAGE>
                                    REVOLVING
                                 PROMISSORY NOTE

$5,000,000.00                      International Waters off the coast of Florida
                                                  April 16, 2004

         FOR VALUE RECEIVED, the undersigned, DECORATOR INDUSTRIES, INC., a
Pennsylvania corporation (herein called "Borrower"), promises to pay to the
order of WASHINGTON MUTUAL BANK, FA (herein called "Bank"), in lawful currency
of the United States of America, the principal sum of FIVE MILLION AND NO/100
DOLLARS ($5,000,000.00), or so much of said sum as has been advanced and is then
outstanding under this Note, together with interest thereon as hereinafter set
forth.

         This Note is a note under which Advances, repayments and re-Advances
may be made from time to time, subject to the terms and conditions of this Note;
provided, however, in no event shall Bank be obligated to make any Advances or
re-Advances hereunder (notwithstanding anything expressed or implied herein or
elsewhere to the contrary) in the event that any Default, or any condition or
event which, with the giving of notice or the running of time, or both, would
constitute a Default, shall have occurred or be continuing or exist.

         Prior to maturity, accrued and unpaid interest shall be due and payable
in arrears on the first (1st) day of each month commencing on the first (1st)
month after the initial Advance hereunder. The entire principal balance of this
Note then unpaid, together with all accrued and unpaid interest and all other
amounts payable hereunder and under the other Loan Documents (as hereinafter
defined), shall be due and payable in full on June 30, 2007 (the "Maturity
Date"), the final maturity of this Note. All such payments will be made by
automatic monthly debits of Borrower's operating or demand account(s) with Bank.
Interest charges shall be computed at a rate per annum equal to the Eurodollar
Rate plus 150 basis points (the "Interest Rate"). Upon and after either (a) the
third (3rd) Business Day following the occurrence of a Default caused by failure
to make a required payment, or (b) the occurrence of any other Default, and
during the continuation thereof, the Indebtedness shall bear interest at the
then applicable Interest Rate plus six (6%) percent per annum (the "Default
Rate"). Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for Bank (for purposes of this
subsection, the term "Bank" shall include the office or branch where Bank or any
corporation or bank controlling Bank makes or maintains any Eurodollar Rate
loans) to make or maintain its Eurodollar Rate loans, the obligation of Bank to
make Eurodollar Rate loans hereunder shall forthwith be cancelled and Borrowers
shall, if any affected Eurodollar Rate loans are then outstanding, promptly open
request from Bank, either shall pay all such affected Eurodollar Rate loans or
convert such affected Eurodollar Rate loans into loans of another type which
Bank may specify.

         Interest and fees hereunder shall be computed on the basis of a year of
360 days and for the actual number of days elapsed. If any payment to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the applicable Interest Rate during such extension.
All fees hereunder shall be earned in full on the date when the same are due and
payable hereunder and shall not be subject to rebate or proration upon
termination of this Note for any reason.

                                       1
<PAGE>

         The amount and date of each Advance, its Interest Rate, and the amount
and date of any repayment shall be noted on Bank's records, which records shall
be conclusive evidence thereof, absent manifest error; provided, however, any
failure by Bank to make any such notation, or any error in any such notation,
shall not relieve Borrower of its obligations to repay Bank all amounts payable
by Borrower to Bank under or pursuant to this Note, when due in accordance with
the terms hereof.

         Borrower may request an Advance hereunder, including the refunding of
an outstanding Advance as the same type of Advance, upon delivery to Bank of a
request for Advance executed by two (2) authorized officers of Borrower, subject
to the following:

         (a) no Default, and no condition or event which, with the giving of
notice or the running of time, or both, would constitute a Default, shall have
occurred and be continuing or exist under this Note;

         (b) each such Request for Advance shall set forth the information
required by that certain Letter Agreement by and between Borrower and Bank of
even date herewith;

         (c) each such Request for Advance shall be delivered to Bank by 11:00
a.m. (Eastern Standard Time) two (2) Business days prior to the proposed date of
Advance;

         (d) a Request for Advance, once delivered to Bank, shall not be
revocable by Borrower; provided, however, as aforesaid, Bank shall not be
obligated to make any Advance under this Note; and

         (e) the proceeds of such Advance must be payable directly into an
account of Borrower at Bank.

         Advances hereunder may not be requested by telephonic notice to Bank.

         Borrower may repay all or any part of the outstanding balance of this
Note at any time. Any repayment made in accordance with this paragraph shall be
without premium or penalty. Any other repayment shall be otherwise restricted by
and subject to the terms of this Note.

         In the event that any payment under this note becomes due and payable
on any day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day, and, to the extent applicable, interest
shall continue to accrue and be payable thereon during such extension at the
rates set forth in this Note.

         All payments to be made by Borrower to Bank under or pursuant to this
Note shall be in immediately available funds, without setoff or counterclaim,
and in the event that any payments submitted hereunder are in funds not
available until collected, said payments shall continue to bear interest at the
Interest Rate until collected. Borrower hereby authorizes Bank to charge any
account of Borrower with Bank for all sums due hereunder, when due in accordance
with the terms hereof.

         If the adoption after the date hereof, or any change after the date
hereof in, any applicable law, rule or regulation of any governmental authority,
central bank or comparable agency after the date hereof:

                                       2
<PAGE>

         (a)      shall subject Bank to any tax, duty or other charge with
                  respect to this note or any Advance hereunder or shall change
                  the basis of taxation of payments to Bank of the principal of
                  or interest on any Advance or any amounts due under this Note
                  in respect thereof (except for changes in the rate of tax on
                  the overall net income of Bank imposed by the jurisdiction in
                  which Bank's principal executive office; or

         (b)      shall impose, modify or deem applicable any reserve
                  (including, without limitation, any imposed by the Board of
                  Governors of the Federal Reserve System), special deposit or
                  similar requirement against assets of, deposits with or for
                  the account of, or credit extended by Bank or the foreign
                  exchange and interbank markets any other condition affecting
                  any Advance under this Note;

          and the result of any of the foregoing is to increase the cost to bank
of maintaining any part of the indebtedness hereunder or to reduce the amount of
any sum received or receivable by Bank under this Note by an amount deemed by
the Bank to be material, then Borrower shall pay to Bank, within fifteen (15)
days of Borrower's receipt of written notice from Bank demanding such
compensation, such additional amount or amounts as will compensate Bank for such
increased cost or reduction. A certificate of Bank, prepared in good faith and
in reasonable detail by Bank and submitted by bank to Borrower, setting forth
the basis for determining such additional amount or amounts necessary to
compensate Bank shall be conclusive and binding for all purposes, absent
manifest error in computation.

         In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to Bank, or any interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by Bank with any guideline, request or directive of any
such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by Bank (or any corporation controlling
Bank), and Bank determines that the amount of such capital is increased by or
based upon the existence of any obligations of Bank hereunder or the making or
maintaining of any Advances hereunder, and such increase has the effect of
reducing the rate of return on Bank's (or such controlling corporation's)
capital as a consequence of such obligations or the making of such Advances
hereunder to a level below that which Bank (or such controlling corporation)
could have achieved but for such circumstances (taking into consideration its
policies with respect to capital adequacy), then Borrower shall pay to Bank,
within fifteen (15) days of Borrower's receipt of written notice from Bank
demanding such compensation, additional amounts sufficient to compensate Bank
(or such controlling corporation) for any increase in the amount of capital and
reduced rate of return which Bank reasonably determined to be allocable to the
existence of any obligations of the Bank hereunder or to the making or
maintaining any Advances hereunder. A certificate of Bank as to the amount of
such compensation, prepared in good faith an din reasonable detail by the Bank
and submitted by Bank to Borrower, shall be conclusive and binding for all
purposes absent manifest error in computation.

         This Note and any other indebtedness and liabilities of any kind of
Borrower to Bank, and any and all modifications, renewals or extensions thereof,
whether joint or several, contingent or absolute, direct or indirect, now
existing or later arising, and however evidenced (collectively the
"Indebtedness"), are secured by and Bank is granted a security interest in all

                                       3
<PAGE>

of item at any time deposited in any account of Borrower with Bank and by all
proceeds of these items (cash or otherwise), all account balances of Borrower
from time to time with Bank, by all property of Borrower from time to time in
the possession of Bank, and by any other collateral, rights and properties
described in each and every mortgage, security agreement, pledge, assignment and
other security or collateral agreement which has been, or will at any time(s)
later be, executed by Borrower or others to or for the benefit of Bank
(collectively the "Collateral"). Notwithstanding the foregoing, (a) to the
extent that any portion of the Indebtedness is a consumer loan, that portion
shall not be secured by any deed of trust or mortgage on or any other security
interest in any Borrower's principal dwelling or in any Borrower's real property
which is not a purchase money security interest as to that portion, unless
expressly provided to the contrary in another place, and (b) if Borrower has
given or gives bank a deed of trust or mortgage covering California real
property, that deed of trust or mortgage shall not secure this Note or any other
Indebtedness of Borrower, unless expressly provided to the contrary in another
place.

         If (a) Borrower or any guarantor under a guaranty of all or part of the
Indebtedness (a "guarantor") fail(s) to pay this Note, or any part thereof, or
any of the Indebtedness when due, by maturity acceleration or otherwise, or
fail(s) to pay any Indebtedness owing on a demand basis upon demand; or (b)
Borrower or any guarantor fails(s) to comply with any of the terms or provisions
of any agreement between Borrower or any guarantor and Bank; or (c) Borrower or
any guarantor become(s) insolvent or the subject of a voluntary or involuntary
proceeding in bankruptcy, or a reorganization, arrangement or creditor
composition proceeding, (if a business entity) cease(s) doing business as a
going concern, (if a natural person) die(s) or become(s) incompetent, (if a
partnership) dissolve(s) or any general partner of it dies, becomes incompetent
or becomes the subject of a bankruptcy proceeding, or (if a corporation) is the
subject of dissolution, merger or consolidation; or (d) any warranty or
representation made by Borrower or any guarantor in connection with this Note or
any of the Indebtedness shall be discovered to be untrue or incomplete in any
material respect; or (e) there is any termination, notice of termination, or
breach of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the Indebtedness; or (f) there is any failure by
Borrower or any guarantor to pay, when due, any of its indebtedness (other that
to bank) or in the observance or performance of any term, covenant or condition
in any document evidencing, securing or relating to such indebtedness which has
had or could reasonably be expected to have a material adverse effect upon
Company's business, properties, or financial condition or upon Company's ability
to comply with its obligations hereunder; or (g) Bank deems itself insecure,
believing in good faith that the prospect of payment or performance of this Note
or any of the Indebtedness is materially impaired; or (h) there is filed or
issued a levy or writ of attachment or garnishment or other like judicial
process upon Borrower or any guarantor with Bank, then Bank, upon the occurrence
and at any time during the continuance or existence of any of these conditions
or events (each a "Default"), may at its option and without prior notice to
Borrower, declare any or all of the Indebtedness to be immediately due and
payable (notwithstanding any provisions contained in the evidence of it to the
contrary), sell or liquidate all or any portion of the Collateral, set off
against the Indebtedness any amounts owing by Bank to Borrower, charge interest
at the default rate provided in the document evidencing the relevant
Indebtedness, and exercise any one or more of the rights and remedies granted to
Bank by any agreement with Borrower or which are granted to Bank under
applicable law, or otherwise.

         Borrower waives presentment, demand, protest, notice of dishonor,
notice of demand or intent to demand, notice of acceleration or intent to
accelerate, and all other notices, and agrees that no extension or indulgence to
Borrower, or release, substitution or nonenforcement of any security, or release
or substitution of any guarantor or any other part, whether with or without
notice, shall affect he obligations of Borrower. Borrower waives all defenses or

                                       4
<PAGE>

right to discharge available under Section 3-605 of the Uniform Commercial Code
and waives all other suretyship defenses or right to discharge. Borrower agrees
that Bank has the right to sell, assign, or grant participations, or any
interest, in any or all of the Indebtedness, and that, in connection with such
right, but without limiting its ability to make other disclosures to the full
extent allowable, Bank may disclose all documents and information which the Bank
now or later has relating to Borrower and the Indebtedness.

         Borrower agrees to reimburse Bank, or any other holder or owner of this
Note, for any and all costs expenses (including, without limit, court costs,
legal expenses and reasonable attorneys' fees, whether inside or outside counsel
is used, whether or not suit is instituted, and, if suit is instituted, whether
at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or attempting to
collect this note or the Indebtedness or incurred in any other matter or
proceeding relating to this Note or the Indebtedness.

         Borrower acknowledges and agrees that there are no contrary agreement,
oral or written, establishing a term of this Note and agrees that the terms and
conditions of this Note may not be amended, waived or modified except in writing
signed by a duly authorized officer of Bank expressly stating that the writing
constitutes an amendment, waiver or modification of the terms of this Note. If
any provision of this note is unenforceable in whole or part for any reason, the
remaining provisions shall continue and be effective. THIS NOTE SHALL BE
EXECUTED OUTSIDE OF FLORIDA BUT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF FLORIDA.

         This Note shall bind Borrower and Borrower's respective successors and
assigns.

         For the purpose of this Note, the following terms have the following
meanings:

         "Advance" means a borrowing requested by Borrower and made by Bank
under this Note, including any refunding of an outstanding Advance.

         "Business Day" means any day, other than Saturday, Sunday or holiday,
on which bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in Fort
Lauderdale, Florida.

         "Eurodollar Rate" shall mean, for any day, the interest rate which is
the rate for deposits in Dollars for a maturity of one month which appears on
Page 3750 on the Telerate Service (or such other page as may replace that page
on such service, or such other services as may be nominated by the British
Bankers Association for the purpose of displaying their fixing of the London
Inter-Bank Offered Rate) as of 11:00 a.m., London time, on the day that is two
London Banking Days preceding the first day of the then current calendar month.
If, for any reason, the Eurodollar Rate is not available, Bank shall, in good
faith and in its sole discretion, determine a reasonable comparable interest
rate.

         "Request for Advance" means a Request for Advance issued by Borrower
under this Note and in accordance with the provisions of that certain Letter
Agreement by and between the Borrower and Bank of even date herewith.

         No delay or failure of Bank in exercising in any right, power or
privilege hereunder shall affect such right, power or privilege, nor shall any
single or partial exercise thereof preclude any further exercise thereof, or the

                                       5
<PAGE>

exercise of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have, whether by other instruments or by law.

         BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OF THE INDEBTEDNESS HEREUNDER.

                    [EXECUTION APPEARS ON THE FOLLOWING PAGE]

                                       6
<PAGE>

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal. BORROWER:

                                               DECORATOR INDUSTRIES, INC.,
                                               a Pennsylvania corporation

                                               By:  /s/ Michael Solomon
                                                    ----------------------------
                                                    Michael Solomon
                                                    Vice President and Treasurer

         Sworn to and subscribed before me this 16 day of April, 2004, by
Michael Solomon, as the Executive Vice President and Treasurer, of DECORATOR
INDUSTRIES, INC., a Pennsylvania corporation, on behalf of the corporation. I
certify that: (a) I am the duly authorized and licensed captain of "Risky
Business" (the "Vessel") described above; and (b) the Vessel was outside the
territorial limits of the State of Florida at a longitude of 80 00.926 W and a
latitude of 26 06.126N at the time of the execution and delivery of this
Agreement.

                                                    /s/ Jason M. Roe
                                                    ----------------------------
                                                    Captain of Vessel
                                                    Print Name:  Jason M. Roe
                                                    License Number: 1059705

                                       7Exhibit 10.11

                        BrainStorm Cell Therapeutics Inc.

                        The 2004 Global Share Option Plan

<PAGE>

                                TABLE OF CONTENTS

1.   PURPOSE OF THE GLOBAL PLAN................................................3

2.   DEFINITIONS...............................................................3

3.   ADMINISTRATION OF THE GLOBAL PLAN.........................................5

4.   DESIGNATION OF PARTICIPANTS...............................................6

5.   SHARES RESERVED FOR THE GLOBAL PLAN.......................................6

6.   PURCHASE PRICE............................................................7

7.   ADJUSTMENTS...............................................................7

8.   TERM AND EXERCISE OF OPTIONS..............................................9

9.   VESTING OF OPTIONS.......................................................10

10.  PUCHASE FOR INVESTMENT...................................................10

11.  DIVIDENDS................................................................12

12.  RESTRICTIONS ON ASSIGNABILITY AND SALE OF OPTIONS........................12

13.  EFFECTIVE DATE AND DURATION OF THE GLOBAL PLAN...........................12

14.  AMENDMENTS OR TERMINATION................................................13

15.  GOVERNMENT REGULATIONS...................................................14

16.  CONTINUANCE OF EMPLOYMENT................................................13

17.  GOVERNING LAW AND JURISDICTION...........................................13

18.  TAX CONSEQUENCES.........................................................14

19.  NON-EXCLUSIVITY OF THE GLOBAL PLAN.......................................14

20.  MULTIPLE AGREEMENTS......................................................14

21.  RULES PARTICULAR TO SPECIFIC COUNTRIES...................................14

                                       2
<PAGE>

      This plan, as amended from time to time, shall be known as the BrainStorm
      Cell Therapeutics Inc. 2004 Global Share Option Plan (the "Global Plan").

1.    PURPOSE OF THE GLOBAL PLAN

      The Global Plan is intended to provide an incentive to retain, in the
      employ of the Company (as defined below) and its affiliates, persons of
      training, experience and ability; to attract new employees, directors,
      consultants and service providers; to encourage the sense of
      proprietorship of such persons; and to stimulate the active interest of
      such persons in the development and financial success of the Company by
      providing them with opportunities to purchase shares in the Company.

2.    DEFINITIONS

      For purposes of interpreting the Global Plan and related documents
      (including the Option Agreement and its appendixes), the following
      definitions shall apply:

      2.1   "Board" means the Board of Directors of the Company.

      2.2   "Cause" means (i) conviction of any felony involving moral turpitude
            or affecting the Company or its affiliates; (ii) any refusal to
            carry out a reasonable directive of the Company's Chief Executive
            Officer, Board or the Optionee's direct supervisor, which involves
            the business of the Company or its affiliates and was capable of
            being lawfully performed; (iii) embezzlement of funds of the Company
            or its affiliates; (iv) any breach of the Optionee's fiduciary
            duties or duties of care of the Company or its affiliates; including
            without limitation disclosure of confidential information of the
            Company or its affiliates; and (v) any conduct (other than conduct
            in good faith) reasonably determined by the Board to be materially
            detrimental to the Company or its affiliates.

      2.3   "Chairman" means the Chairman of the Committee.

      2.4   "Committee" means a share option compensation committee of the
            Board, designated from time to time by the resolution of the Board,
            which shall consist of no fewer than two members of the Board.

      2.5   "Company" means BrainStorm Cell Therapeutics Inc., a Washington
            State company.

      2.6   "Date of Grant" means the date determined by the Board or authorized
            Committee as set forth in the Option Agreement.

      2.7   "Employee" means a person who is employed by the Company or any
            affiliate.

      2.8   "Expiration date" means the date upon which an Option shall expire,
            as set forth in Section 8.2 of the Global Plan.

      2.9   "Fair Market Value" means as of any date, the value of a Share
            determined as follows:

                                       3
<PAGE>

            (i)   If the Shares are listed on any established stock exchange or
                  a national market system, including without limitation the Tel
                  Aviv Stock Exchange, the NASDAQ National Market System or the
                  NASDAQ SmallCap Market, the Fair Market Value shall be the
                  last reported sale price for such Shares (or the highest
                  closing bid, if no sales were reported), as quoted on such
                  exchange or system for the last market trading day prior to
                  time of determination, as reported in The Wall Street Journal,
                  or such other source as the Board deems reliable;

            (ii)  If the Shares are regularly quoted by one or more recognized
                  securities dealers, but selling prices are not reported, the
                  Fair Market Value shall be the mean between the highest bid
                  and lowest asked prices for the Shares on the last market
                  trading day prior to the day of determination; or

            (iii) In the absence of an established market for the Shares, the
                  Fair Market Value thereof shall be determined in good faith by
                  the Board.

      2.10  "IPO" means the initial public offering of the Company's shares.

      2.11  "Option" means an option to purchase one or more Shares pursuant to
            the Global Plan.

      2.12  "Optionee" means a person who receives or holds an Option under the
            Global Plan.

      2.13  "Option Agreement" means the share option agreement between the
            Company and an Optionee that evidences and sets out the terms and
            conditions of an Option.

      2.14  "Global Plan" means the Company's 2004 Global Share Option Plan.

      2.15  "Purchase Price" means the price for each Share subject to an
            Option.

      2.16  "Service Provider" means a director, consultant or adviser of the
            Company or any affiliate, or any other person who is not an
            Employee.

      2.17  "Share" means the common stock, 0.00005 par value, of the Company.

      2.18  "Successor Company" means any entity into which the Company is
            merged to or by which the Company is acquired.

      2.19  "Transaction" means (i) merger, acquisition or reorganization of the
            Company with one or more other entities in which the Company is not
            the surviving entity, (ii) a sale of all or substantially all of the
            assets or shares of the Company to another entity.

      2.20  "U.S. Plan" means the BrainStorm Cell Therapeutics Inc. 2005 U.S.
            Stock Option and Incentive Plan.

      2.21  "Vested Option" means any Option, which has already been vested
            according to the Vesting Dates.

                                       4
<PAGE>

      2.22  "Vesting Dates" means, as determined by the Board or authorized
            Committee, the date as of which the Optionee shall be entitled to
            exercise Options or part of the Options as set forth in Section 9 of
            the Global Plan.

3.    ADMINISTRATION OF THE GLOBAL PLAN

      3.1   The Board shall have the power to administer the Global Plan. To the
            extent permitted under applicable law, the Board may delegate its
            powers under the Global Plan, or any part thereof, to the Committee,
            in which case, any reference to the Board in the Global Plan with
            respect to the rights so delegated shall be construed as reference
            to the Committee. Notwithstanding the foregoing, the Board shall
            automatically have residual authority (i) if no Committee shall be
            constituted, (ii) with respect to rights not delegated by the Board
            to the Committee, or (iii) if such Committee shall cease to operate
            for any reason whatsoever.

      3.2   The Committee, if appointed, shall select one of its members as its
            Chairman and shall hold its meetings at such times and places as the
            Chairman shall determine. The Committee shall keep records of its
            meetings and shall make such rules and regulations for the conduct
            of its business as it shall deem advisable.

      3.3   The Committee shall have full power and authority subject to the
            approval of the Board to the extent required under applicable law
            (and subject further to applicable laws): (i) to designate
            Optionees; (ii) to determine the terms and provisions of respective
            Option Agreements (which need not be identical) including, but not
            limited to, the number of Shares to be covered by each Option,
            provisions concerning the time or times when and the extent to which
            the Options may be exercised and the nature and duration of
            restrictions as to transferability or restrictions constituting
            substantial risk of forfeiture; (iii) to accelerate the right of an
            Optionee to exercise, in whole or in part, any previously granted
            Option; (iv) to interpret the provisions and supervise the
            administration of the Global Plan; (v) to determine the Fair Market
            Value of the Shares; (vi) determine the Purchase Price of the Option
            (vii) to designate the type of Options to be granted to an Optionee;
            (viii) to determine any other matter which is necessary or desirable
            for, or incidental to, the administration of the Global Plan.

      3.4   The Board and/or the Committee shall have the authority to grant, in
            its discretion, to the holder of an outstanding Option, in exchange
            for the surrender and cancellation of such Option, a new Option
            having a purchase price equal to, lower than or higher than the
            Purchase Price of the original Option so surrendered and canceled,
            and containing such other terms and conditions as the Committee may
            prescribe in accordance with the provisions of the Global Plan.

                                       5
<PAGE>

      3.5   Subject to the Company's incorporation documents, all decisions and
            selections made by the Board or the Committee pursuant to the
            provisions of the Global Plan shall be made by a majority of its
            members except that no member of the Board or the Committee shall
            vote on, or be counted for quorum purposes, with respect to any
            proposed action of the Board or the Committee relating to any Option
            to be granted to that member. Any decision reduced to writing shall
            be executed in accordance with the provisions of the Company's
            incorporation documents, as the same may be in effect from time to
            time.

      3.6   The interpretation and construction by the Committee of any
            provision of the Global Plan or of any Option Agreement thereunder
            shall be final and conclusive unless otherwise determined by the
            Board.

      3.7   Subject to the Company's incorporation documents and the Company's
            decision, and to all approvals legally required, each member of the
            Board or the Committee shall be indemnified and held harmless by the
            Company against any cost or expense (including counsel fees)
            reasonably incurred by him, or any liability (including any sum paid
            in settlement of a claim with the approval of the Company) arising
            out of any act or omission to act in connection with the Global Plan
            unless arising out of such member's own fraud or bad faith, to the
            extent permitted by applicable law. Such indemnification shall be in
            addition to any rights of indemnification the member may have as a
            director or otherwise under the Company's incorporation documents,
            any agreement, any vote of shareholders or disinterested directors,
            insurance policy or otherwise.

4.    DESIGNATION OF PARTICIPANTS

      The persons eligible for participation in the Global Plan shall include
      Employees and/or Service Providers. The grant of an Option hereunder shall
      neither entitle the Optionee to participate nor disqualify him or her from
      participating in, any other grant of Options pursuant to the Global Plan
      or any other option or share plan of the Company or any of its affiliates.

5.    SHARES RESERVED FOR THE GLOBAL PLAN

      5.1   The Company has reserved a total of 9,143,462 authorized but
            unissued Shares for the purposes of the Global Plan and for the
            purpose of the U.S. Plan and the Company's other share option plans,
            when applicable, subject to adjustment as set forth in Section 7
            below. Any Shares issued pursuant to an Option or other award under
            the Global Plan, the U.S. Plan or any other Company share option
            plan shall reduce the total number of shares reserved and available
            for the grant of future Options and other awards under the Global
            Plan, the U.S. Plan and any other Company share option plans. Any
            Shares which remain unissued and which are not subject to
            outstanding Options at the termination of the Global Plan shall
            cease to be reserved for the purpose of the Global Plan, but until
            termination of the Global Plan the Company shall at all times
            reserve a sufficient number of Shares to meet the requirements of
            the Global Plan. Should any Option for any reason expire or be
            canceled prior to its exercise or relinquishment in full, the Share
            or Shares subject to such Option may again be subjected to an Option
            under the Global Plan, the U.S. Plan or under future plans.

                                       6
<PAGE>

      5.2   Each Option granted pursuant to the Global Plan, shall be evidenced
            by a written Option Agreement between the Company and the Optionee,
            in such form as the Board shall from time to time approve. Each
            Option Agreement shall state, inter alia, the number of Shares to
            which the Option relates, the type of Option granted thereunder, the
            Vesting Dates, the Purchase Price per Share and the Expiration Date.

6.    PURCHASE PRICE

      6.1   The Purchase Price of each Share subject to an Option shall be
            determined by the Committee in its sole and absolute discretion in
            accordance with applicable law, subject to any guidelines as may be
            determined by the Board from time to time. Each Option Agreement
            will contain the Purchase Price determined for each Optionee.

      6.2   The Purchase Price shall be payable upon the exercise of an Option
            in cash, check or wire transfer. The Purchase Price shall be
            denominated in the currency of the primary economic environment of,
            at the Company's discretion, either the Company or the Employee
            (that is the functional currency of the Company or the currency in
            which the Employee is paid).

7.    ADJUSTMENTS

Upon the occurrence of any of the following described events, Optionee's rights
to purchase Shares under the Global Plan shall be adjusted as hereafter
provided:

      7.1   In the event of Transaction, the unexercised Options then
            outstanding under the Global Plan shall be assumed or substituted
            for an appropriate number of shares of each class of shares or other
            securities of the Successor Company (or a parent or subsidiary of
            the Successor Company) as were distributed to the shareholders of
            the Company in connection and with respect to the Transaction. In
            the case of such assumption and/or substitution of Options,
            appropriate adjustments shall be made to the Purchase Price so as to
            reflect such action and all other terms and conditions of the Option
            Agreements shall remain unchanged, including but not limited to the
            vesting schedule, all subject to the determination of the Committee
            or the Board, which determination shall be in their sole discretion
            and final. The Company shall notify the Optionee of the Transaction
            in such form and method as it deems applicable at least ten (10)
            days prior to the effective date of such Transaction.

      7.2   Notwithstanding the above and subject to all applicable law, the
            Board or the Committee shall have the power and authority to
            determine that in certain Option Agreements there shall be a clause
            instructing that if in any Transaction the Successor Company (or
            parent or subsidiary of the Successor Company) does not agree to
            assume or substitute the Options, the Vesting Dates of outstanding
            Options shall be accelerated so that any unvested Option or any
            portion thereof shall be immediately vested as of the date which is
            ten (10) days prior to the effective date of the Transaction.

                                       7
<PAGE>

      7.3   For the purposes of Section 7.1 above, an Option shall be considered
            assumed or substitute if, following the Transaction, the Option
            shall confer the right, subject to such Option's original vesting
            schedule, to purchase or receive, for each Share underlying such
            Option immediately prior to the Transaction, the consideration
            (whether shares, options, cash, or other securities or property)
            received in the Transaction by the holders of shares for each Share
            held on the effective date of the Transaction (and if such holders
            were offered a choice of consideration, the type of consideration
            chosen by the holders of a majority of the outstanding Shares);
            provided, however, that if such consideration received in the
            Transaction is not solely shares of common stock (or their
            equivalent) of the Successor Company or its parent or subsidiary,
            the Committee may, with the consent of the Successor Company,
            provide for the consideration to be received upon the exercise of
            the Option to be solely shares of common stock (or their equivalent)
            of the Successor Company or its parent or subsidiary equal in Fair
            Market Value to the per Share consideration received by holders of a
            majority of the outstanding shares in the Transaction; and provided
            further that the Committee may determine, in its discretion, that in
            lieu of such assumption or substitution of Options for options of
            the Successor Company or its parent or subsidiary, such Options will
            be substituted for any other type of asset or property including
            cash which is fair under the circumstances.

      7.4   If the Company is voluntarily liquidated or dissolved while
            unexercised Options remain outstanding under the Global Plan, the
            Company shall immediately notify all unexercised Option holders of
            such liquidation, and the Option holders shall then have ten (10)
            days to exercise any unexercised Vested Option held by them at that
            time, in accordance with the exercise procedure set forth herein.
            Upon the expiration of such ten-days period, all remaining
            outstanding Options will terminate immediately.

      7.5   If the outstanding Shares shall at any time be changed or exchanged
            by declaration of a share dividend (bonus shares), Share split or
            reverse Share split, combination or exchange of shares,
            recapitalization, or any other like event by or of the Company, and
            as often as the same shall occur, then the number, class and kind of
            the Shares subject to the Global Plan or subject to any Options
            theretofore granted, and the Purchase Prices, shall be appropriately
            and equitably adjusted so as to maintain the proportionate number of
            Shares without changing the aggregate Purchase Price; provided,
            however, that no adjustment shall be made by reason of the
            distribution of subscription rights (rights offering) on outstanding
            Shares. Upon happening of any of the foregoing, the class and
            aggregate number of Shares issuable pursuant to the Global Plan (as
            set forth in Section 5 hereof), in respect of which Options have not
            yet been exercised, shall be appropriately adjusted (all as
            determined by the Board whose determination shall be final).
                                       8
<PAGE>

      7.6   The Optionee acknowledges that Optionee's rights to sell the Shares
            may be subject to certain limitations (including a lock-up period),
            as will be requested by the Company or its underwriters, and the
            Optionee unconditionally agrees and accepts any such limitations.

8.    TERM AND EXERCISE OF OPTIONS

      8.1   Options shall be exercised by the Optionee's by giving written
            notice of to the Company or to any third party designated by the
            Company (the "Representative"), in such form and method as may be
            determined by the Company, which exercise shall be effective upon
            receipt of such notice by the Company and/or the Representative and
            the payment of the exercise price for the number of Shares with
            respect to which the option is being exercised, at the Company's or
            the Representative's principal office. The notice shall specify the
            number of Shares with respect to which the Option is being
            exercised.

      8.2   Options, to the extent not previously exercised, shall terminate
            upon the earlier of: (i) the date set forth in the Option Agreement;
            (ii) the expiration of ten (10) years from the Date of Grant; or
            (iii) the expiration of any extended period in any of the events set
            forth in Section 8.5 below.

      8.3   The Options may be exercised by the Optionee in whole at any time or
            in part from time to time, to the extent that the Options have
            become vested and exercisable, prior to the Expiration Date, and
            provided that, subject to the provisions of Section 8.5 below, the
            Optionee is an Employee or a Service Provider at all times during
            the period beginning with the granting of the Option and ending upon
            the date of exercise.

      8.4   Subject to the provisions of Section 8.5 below, in the event of a
            termination of Optionee's employment or service, all Options granted
            to such Optionee shall immediately expire. Unless otherwise approved
            by the Committee, a notice of termination of employment or services
            shall be deemed to constitute termination of employment or services.

      8.5   Notwithstanding anything to the contrary hereinabove and unless
            otherwise determined in the Optionee's Option Agreement, an Option
            may be exercised after the date of termination of Optionee's
            employment or service during an additional period of time beyond the
            date of such termination, but only with respect to the number of
            Vested Options at the time of such termination according to the
            Vesting Dates, if:

            8.5.1 termination is without Cause, in which event the Vested
                  Options still in force and unexpired may be exercised within a
                  period of three (3) months after the date of such termination;
                  or

            8.5.2 termination is the result of death or disability of the
                  Optionee, in which event the Vested Options still in force and
                  unexpired may be exercised within a period of twelve (12)
                  months after such date of termination; or-

            8.5.3 prior to the date of such termination, the Committee shall
                  authorize an extension of the term of all or part of the
                  Vested Options beyond the date of such termination for a
                  period not to exceed the period during which the Options by
                  their terms would otherwise have been exercisable.

                                       9
<PAGE>

            8.5.4 For avoidance of any doubt, if termination of employment or
                  service is for Cause, any outstanding unexercised Option will
                  immediately expire and terminate, and the Optionee shall not
                  have any right in respect of such outstanding Options.

      8.6   To avoid doubt, Optionees shall not have any of the rights or
            privileges of shareholders of the Company, in respect of any Shares
            purchasable upon the exercise of an Option, nor shall they be deemed
            to be a class of shareholders or creditors of the Company for the
            purpose of all applicable law, until registration of the Optionee as
            holder of such Shares in the Company's register of shareholders upon
            exercise of the Option in accordance with the provisions of the
            Global Plan.

      8.7   Any form of Option Agreement authorized by the Global Plan may
            contain such other provisions, not inconsistent with the Global
            Plan, as the Board may, from time to time, deem advisable.

9.    VESTING OF OPTIONS

      9.1   Subject to the provisions of the Global Plan, Options shall vest at
            the Vesting Dates set forth in the Option Agreement. However no
            Option shall be exercised after the Expiration Date.

      9.2   An Option may be subject to such other terms and conditions, not
            inconsistent with the Global Plan, on the time or times when it may
            be exercised as the Committee may deem appropriate. The vesting
            provisions of individual Options may vary.

10.   PURCHASE FOR INVESTMENT

      The Company's obligation to issue or allocate Shares upon exercise of an
      Option granted under the Global Plan is expressly conditioned upon: (a)
      the Company's completion of any registration or other qualifications of
      such Shares under all applicable laws, rules and regulations or (b)
      representations and undertakings by the Optionee (or his legal
      representative, heir or legatee, in the event of the Optionee's death) to
      assure that the sale of the Shares complies with any registration
      exemption requirements which the Company in its sole discretion shall deem
      necessary or advisable. Such required representations and undertakings may
      include representations and agreements that such Optionee (or his legal
      representative, heir, or legatee): (a) is purchasing such Shares for
      investment and not with any present intention of selling or otherwise
      disposing thereof; and (b) agrees to have placed upon the face and reverse
      of any certificates evidencing such Shares a legend setting forth (i) any
      representations and undertakings which such Optionee has given to the
      Company or a reference thereto and (ii) that, prior to effecting any sale
      or other disposition of any such Shares, the Optionee must furnish to the
      Company an opinion of counsel, satisfactory to the Company, that such sale
      or disposition will not violate the applicable laws, rules and regulations
      of the United States or any other state having jurisdiction over the
      Company and the Optionee.

                                       10
<PAGE>

11.   DIVIDENDS

      With respect to all Shares (but excluding, for avoidance of any doubt, any
      unexercised Options) allocated or issued upon the exercise of Options
      purchased by the Optionee and held by the Optionee or by a trustee, as the
      case may be, the Optionee shall be entitled to receive dividends in
      accordance with the quantity of such Shares, subject to the provisions of
      the Company's incorporation documents, as amended from time to time and
      subject to any applicable taxation on distribution of dividends.

12.   RESTRICTIONS ON ASSIGNABILITY AND SALE OF OPTIONS

      No Option or any right with respect thereto, purchasable hereunder,
      whether fully paid or not, shall be assignable, transferable, or given as
      collateral nor any right with respect thereto may be given to any third
      party whatsoever, other than by will or by the laws of descent and
      distribution or as specifically otherwise allowed under the Global Plan
      and during the lifetime of the Optionee, each and all of such Optionee's
      rights to purchase Shares hereunder shall be exercisable only by the
      Optionee. Any action made in contradiction to the aforementioned, shall be
      null and void.

13.   EFFECTIVE DATE AND DURATION OF THE GLOBAL PLAN

      The Global Plan shall be effective as of the day it was adopted by the
      Board and shall terminate at the end of ten (10) years from such day of
      adoption.

      The Company shall obtain the approval of the Company's shareholders for
      the adoption of this Global Plan or for any amendment to this ISOP, if
      shareholders' approval is necessary or desirable to comply with any
      applicable law including without limitation the U.S. securities law or the
      securities laws of other jurisdiction applicable to Options granted to
      Optionees under this Global Plan, or if shareholders' approval is required
      by any authority or by any governmental agencies or national securities
      exchanges including without limitation the US Securities and Exchange
      Commission.

                                       11
<PAGE>

14.   AMENDMENTS OR TERMINATION

      14.1  The Board may at any time, subject to the provisions of Section 14.2
            below and all applicable law, amend, alter, suspend or terminate the
            Global Plan, provided, however, that (i) the Board may not extend
            the term of the Global Plan specified in Section 13 and (ii) no
            amendment, alteration, suspension or termination of the Global Plan
            shall impair the rights of any Optionee, unless mutually agreed
            otherwise by the Optionee and the Company, which agreement must be
            in writing and signed by the Optionee and the Company. Earlier
            termination of the Global Plan prior to the Termination Date shall
            not affect the Board's ability to exercise the powers granted to it
            hereunder with respect to Options granted under the Global Plan
            prior to the date of such earlier termination.

      14.2  The Company shall obtain the approval of the Company's shareholders
            for any amendment to this Global Plan and/or the Appendixes thereto
            if shareholders' approval is required under any applicable law
            including without limitation the U.S. securities law or the
            securities laws of other jurisdiction applicable to Options granted
            to Optionees under this Global Plan and/or the Appendixes thereto,
            or if shareholders' approval is required by any authority or by any
            governmental agencies or national securities exchanges including
            without limitation the U.S. Securities and Exchange Commission.

15.   GOVERNMENT REGULATIONS

      The Global Plan, the granting and exercise of Options hereunder and the
      obligation of the Company to sell and deliver Shares under such Options
      shall be subject to all applicable laws, rules, regulations, approvals and
      consents whether of the United States, the State of Israel, or any other
      state having jurisdiction over the Company or the Optionee, including the
      registration of the Shares under the United States Securities Act 1933 or
      under the securities act of any applicable jurisdiction, and to such
      approvals by any governmental agencies or national securities exchanges as
      may be required. Nothing herein shall be deemed to require the Company to
      register the Shares under the securities law of any jurisdiction.

16.   CONTINUANCE OF EMPLOYMENT

      Neither the Global Plan nor any Option Agreement shall impose any
      obligation on the Company or an affiliate to continue any Optionee in its
      employ or service, and nothing in the Global Plan or in any Option granted
      pursuant hereto shall confer upon any Optionee any right to continue in
      the employ or service of the Company or an affiliate thereof or restrict
      the right of the Company or an affiliate thereof to terminate such
      employment or service at any time.

                                       12
<PAGE>

17.   GOVERNING LAW AND JURISDICTION

      The Global Plan shall be governed by and construed and enforced in
      accordance with the laws of the State of Israel as applicable to contracts
      made and to be performed therein, without giving effect to the principles
      of conflict of laws. The competent courts of the State of Israel,
      Washington State or any other state of the United States in which the
      company is qualified to do business shall have sole jurisdiction in any
      matters pertaining to the Global Plan.

18.   TAX CONSEQUENCES

      Any tax consequences to any Optionee arising from the grant or exercise of
      any Option, from the payment for Shares covered thereby or from any other
      event or act (of the Company and/or its affiliates, or the Optionee)
      hereunder shall be borne solely by the Optionee. The Company and/or its
      affiliates shall withhold taxes according to the requirements under the
      applicable laws, rules, and regulations, including withholding taxes at
      source. Furthermore, the Optionee shall agree to indemnify the Company
      and/or its affiliates and hold them harmless against and from any and all
      liability for any such tax or interest or penalty thereon, including
      without limitation, liabilities relating to the necessity to withhold, or
      to have withheld, any such tax from any payment made to the Optionee.

      The Company shall not be required to release any Share certificate to an
      Optionee until all required payments have been fully made.

21.   NON-EXCLUSIVITY OF THE GLOBAL PLAN

      The adoption of the Global Plan by the Board shall not be construed as
      amending, modifying or rescinding any previously approved incentive
      arrangements or as creating any limitations on the power of the Board to
      adopt such other incentive arrangements as it may deem desirable,
      including, without limitation, the granting of Options otherwise then
      under the Global Plan, and such arrangements may be either applicable
      generally or only in specific cases. For the avoidance of doubt, prior
      grant of options to Optionees of the Company under their employment
      agreements, and not in the framework of any previous option plan, shall
      not be deemed an approved incentive arrangement for the purpose of this
      section.

22.   MULTIPLE AGREEMENTS

      The terms of each Option may differ from other Options granted under the
      Global Plan at the same time, or at any other time. The Board may also
      grant more than one Option to a given Optionee during the term of the
      Global Plan, either in addition to, or in substitution for, one or more
      Options previously granted to that Optionee.

23.   RULES PARTICULAR TO SPECIFIC COUNTRIES

      Notwithstanding anything herein to the contrary, the terms and conditions
      of the Global Plan may be adjusted with respect to a particular country by
      means of an addendum to the Global Plan in the form of an appendix (the

                                       13
<PAGE>

      "Appendix"), and to the extent that the terms and conditions set forth in
      the Appendix conflict with any provisions of the Global Plan, the
      provisions of the Appendix shall govern. Terms and conditions set forth in
      the Appendix shall apply only to Options issued to Optionees under the
      jurisdiction of the specific country that is subject of the Appendix and
      shall not apply to Options issued to any other Optionee. The adoption of
      any such Appendix shall be subject to the approval of the Board and if
      required the approval of the shareholders of the Company.

                                      * * *

                                       14
<PAGE>

                        BRAINSTORM CELL THERAPEUTICS INC

                               APPENDIX A - ISRAEL

                       TO THE 2004 GLOBL SHARE OPTION PLAN

1.    GENERAL

      1.1.  This appendix (the "Appendix") shall apply only to participants who
            are residents of the state of Israel or those who are deemed to be
            residents of the state of Israel for the payment of tax. The
            provisions specified hereunder shall form an integral part of the
            2004 Global Share Option Plan of BrainStorm Cell Therapeutics Inc
            (hereinafter: the "Plan"), which applies to the issuance of options
            to purchase Shares of BrainStorm Cell Therapeutics Inc (hereinafter:
            the "Company"). According to the Plan, options to purchase the
            Company's Shares may be issued to employees, directors, consultants
            and service provides of the Company or its affiliates

      1.2   This Appendix is effective with respect to Options granted as of
            January 1, 2003 and shall comply with Amendment no. 132 of the
            Israeli Tax Ordinance.

      1.3.  This Appendix is to be read as a continuation of the Plan and only
            modifies options granted to Israeli Optionees so that they comply
            with the requirements set by the Israeli law in general, and in
            particular with the provisions of Section 102 (as specified herein),
            as may be amended or replaced from time to time. For the avoidance
            of doubt, this Appendix does not add to or modify the Plan in
            respect of any other category of Optionees.

      1.5.  The Plan and this Appendix are complimentary to each other and shall
            be deemed as one. In any case of contradiction, whether explicit or
            implied, between the provisions of this Appendix and the Plan, the
            provisions set out in the Appendix shall prevail.

      1.6.  Any capitalized terms not specifically defined in this Appendix
            shall be construed according to the interpretation given to it in
            the Plan.

2.    DEFINITIONS

      2.1   "Affiliate" means any "employing company" within the meaning of
            Section 102(a) of the Ordinance.

      2.2   "Approved 102 Option" means an Option granted pursuant to Section
            102(b) of the Ordinance and held in trust by a Trustee for the
            benefit of the Optionee.

      2.3   "Capital Gain Option (CGO)" means an Approved 102 Option elected and
            designated by the Company to qualify under the capital gain tax
            treatment in accordance with the provisions of Section 102(b)(2) of
            the Ordinance.

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      2.4   "Controlling Shareholder" shall have the meaning ascribed to it in
            Section 32(9) of the Ordinance.

      2.5   "Employee" means a person who is employed by the Company or its
            Affiliates, including an individual who is serving as a director or
            an office holder, but excluding any Controlling Shareholder, all as
            determined in Section 102 of the Ordinance.

      2.6   "ITA" means the Israeli Tax Authorities.

      2.7   "Non-Employee" means a consultant, adviser, service provider,
            Controlling Shareholder or any other person who is not an Employee.

      2.8   "Ordinary Income Option (OIO)" means an Approved 102 Option elected
            and designated by the Company to qualify under the ordinary income
            tax treatment in accordance with the provisions of Section 102(b)(1)
            of the Ordinance.

      2.9   "102 Option" means any Option granted to Employees pursuant to
            Section 102 of the Ordinance.

      2.10  "3(i) Option" means an Option granted pursuant to Section 3(i) of
            the Ordinance to any person who is a Non- Employee.

      2.11  "Ordinance" means the Israeli Income Tax Ordinance [New Version]
            1961 as now in effect or as hereafter amended.

      2.12  "Section 102" means section 102 of the Ordinance and any
            regulations, rules, orders or procedures promulgated thereunder as
            now in effect or as hereafter amended.

      2.13  "Trustee" means any individual appointed by the Company to serve as
            a trustee and approved by the ITA, all in accordance with the
            provisions of Section 102(a) of the Ordinance.

      2.14  "Unapproved 102 Option" means an Option granted pursuant to Section
            102(c) of the Ordinance and not held in trust by a Trustee.

3.    ISSUANCE OF OPTIONS

      3.1   The persons eligible for participation in the Plan as Optionees
            shall include any Employees and/or Non-Employees of the Company or
            of any Affiliate; provided, however, that (i) Employees may only be
            granted 102 Options; and (ii) Non-Employees and/or Controlling
            Shareholders may only be granted 3(i) Options

      3.2   The Company may designate Options granted to Employees pursuant to
            Section 102 as Unapproved 102 Options or Approved 102 Options.

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      3.3   The grant of Approved 102 Options shall be made under this Appendix
            adopted by the Board, and shall be conditioned upon the approval of
            this Appendix by the ITA.

      3.4   Approved 102 Options may either be classified as Capital Gain
            Options ("CGOs") or Ordinary Income Options ("OIOs").

      3.5   No Approved 102 Options may be granted under this Appendix to any
            eligible Employee, unless and until, the Company's election of the
            type of Approved 102 Options as CGO or OIO granted to Employees (the
            "Election"), is appropriately filed with the ITA. Such Election
            shall become effective beginning the first date of grant of an
            Approved 102 Option under this Appendix and shall remain in effect
            at least until the end of the year following the year during which
            the Company first granted Approved 102 Options. The Election shall
            obligate the Company to grant only the type of Approved 102 Option
            it has elected, and shall apply to all Optionees who were granted
            Approved 102 Options during the period indicated herein, all in
            accordance with the provisions of Section 102(g) of the Ordinance.
            For the avoidance of doubt, such Election shall not prevent the
            Company from granting Unapproved 102 Options simultaneously.

      3.6   All Approved 102 Options must be held in trust by a Trustee, as
            described in Section 4 below.

      3.7   For the avoidance of doubt, the designation of Unapproved 102
            Options and Approved 102 Options shall be subject to the terms and
            conditions set forth in Section 102.

4.    TRUSTEE

      4.1   Approved 102 Options which shall be granted under this Appendix
            and/or any Shares allocated or issued upon exercise of such Approved
            102 Options and/or other shares received subsequently following any
            realization of rights, including without limitation bonus shares,
            shall be allocated or issued to the Trustee and held for the benefit
            of the Optionees for such period of time as required by Section 102
            or any regulations, rules or orders or procedures promulgated
            thereunder (the "Holding Period"). In the case the requirements for
            Approved 102 Options are not met, then the Approved 102 Options may
            be regarded as Unapproved 102 Options, all in accordance with the
            provisions of Section 102.

      4.2   Notwithstanding anything to the contrary, the Trustee shall not
            release any Shares allocated or issued upon exercise of Approved 102
            Options prior to the full payment of the Optionee's tax liabilities
            arising from Approved 102 Options which were granted to him and/or
            any Shares allocated or issued upon exercise of such Options.

                                       17
<PAGE>

      4.3   With respect to any Approved 102 Option, subject to the provisions
            of Section 102 and any rules or regulation or orders or procedures
            promulgated thereunder, an Optionee shall not sell or release from
            trust any Share received upon the exercise of an Approved 102 Option
            and/or any share received subsequently following any realization of
            rights, including without limitation, bonus shares, until the lapse
            of the Holding Period required under Section 102 of the Ordinance.
            Notwithstanding the above, if any such sale or release occurs during
            the Holding Period, the sanctions under Section 102 of the Ordinance
            and under any rules or regulation or orders or procedures
            promulgated thereunder shall apply to and shall be borne by such
            Optionee.

      4.4   Upon receipt of Approved 102 Option, the Optionee will sign an
            undertaking to release the Trustee from any liability in respect of
            any action or decision duly taken and bona fide executed in relation
            with this Appendix, or any Approved 102 Option or Share granted to
            him thereunder.

5.    THE OPTIONS

      The terms and conditions upon which the Options shall be issued and
      exercised, shall be as specified in the Option Agreement to be executed
      pursuant to the Plan and to this Appendix. Each Option Agreement shall
      state, inter alia, the number of Shares to which the Option relates, the
      type of Option granted thereunder (whether a CGO, OIO, Unapproved 102
      Option or a 3(i) Option), the vesting provisions and the exercise price.

6.    FAIR MARKET VALUE

      Without derogating from Section 2.9 of the Plan and solely for the purpose
      of determining the tax liability pursuant to Section 102(b)(3) of the
      Ordinance, if at the date of grant the Company's shares are listed on any
      established stock exchange or a national market system or if the Company's
      shares will be registered for trading within ninety (90) days following
      the date of grant of the CGOs, the fair market value of the Shares at the
      date of grant shall be determined in accordance with the average value of
      the Company's shares on the thirty (30) trading days preceding the date of
      grant or on the thirty (30) trading days following the date of
      registration for trading, as the case may be.

7.    EXERCISE OF OPTIONS

      Options shall be exercised by the Optionee by giving a written notice to
      the Company and/or to any third party designated by the Company (the
      "Representative"), in such form and method as may be determined by the
      Company and, when applicable, by the Trustee, in accordance with the
      requirements of Section 102, which exercise shall be effective upon
      receipt of such notice by the Company and/or the Representative and the
      payment of the exercise price for the number of Shares with respect to
      which the option is being exercised, at the Company's or the
      Representative's principal office. The notice shall specify the number of
      Shares with respect to which the option is being exercised.

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8.    ASSIGNABILITY AND SALE OF OPTIONS

      8.1.  Notwithstanding any other provision of the Plan, no Option or any
            right with respect thereto, purchasable hereunder, whether fully
            paid or not, shall be assignable, transferable or given as
            collateral or any right with respect to them given to any third
            party whatsoever, and during the lifetime of the Optionee each and
            all of such Optionee's rights to purchase Shares hereunder shall be
            exercisable only by the Optionee.

            Any such action made directly or indirectly, for an immediate
            validation or for a future one, shall be void.

      8.2   As long as Options or Shares purchased pursuant to thereto are held
            by the Trustee on behalf of the Optionee, all rights of the Optionee
            over the shares are personal, can not be transferred, assigned,
            pledged or mortgaged, other than by will or laws of descent and
            distribution.

9.    INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER'S PERMIT

      9.1.  With regards to Approved 102 Options, the provisions of the Plan
            and/or the Appendix and/or the Option Agreement shall be subject to
            the provisions of Section 102 and the Tax Assessing Officer's
            permit, and the said provisions and permit shall be deemed an
            integral part of the Plan and of the Appendix and of the Option
            Agreement.

      9.2.  Any provision of Section 102 and/or the said permit which is
            necessary in order to receive and/or to keep any tax benefit
            pursuant to Section 102, which is not expressly specified in the
            Plan or the Appendix or the Option Agreement, shall be considered
            binding upon the Company and the Optionees.

10.   DIVIDEND

      Subject to the Company's incorporation documents, with respect to all
      Shares (but excluding, for avoidance of any doubt, any unexercised
      options) allocated or issued upon the exercise of Options and held by the
      Optionee or by the Trustee as the case may be, the Optionee shall be
      entitled to receive dividends in accordance with the quantity of such
      shares, and subject to any applicable taxation on distribution of
      dividends, and when applicable subject to the provisions of Section 102
      and the rules, regulations or orders promulgated thereunder.

11.   TAX CONSEQUENCES

      11.1  Any tax consequences arising from the grant or exercise of any
            Option, from the payment for Shares covered thereby or from any
            other event or act (of the Company, and/or its Affiliates, and the
            Trustee or the Optionee), hereunder, shall be borne solely by the
            Optionee. The Company and/or its Affiliates, and/or the Trustee
            shall withhold taxes according to the requirements under the
            applicable laws, rules, and regulations, including withholding taxes
            at source. Furthermore, the Optionee shall agree to indemnify the
            Company and/or its Affiliates and/or the Trustee and hold them
            harmless against and from any and all liability for any such tax or
            interest or penalty thereon, including without limitation,
            liabilities relating to the necessity to withhold, or to have
            withheld, any such tax from any payment made to the Optionee.

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<PAGE>

      11.2  The Company and/or, when applicable, the Trustee shall not be
            required to release any share certificate to an Optionee until all
            required payments have been fully made.

      11.3  With respect to Unapproved 102 Option, if the Optionee ceases to be
            employed by the Company or any Affiliate, the Optionee shall extend
            to the Company and/or its Affiliate a security or guarantee for the
            payment of tax due at the time of sale of Shares, all in accordance
            with the provisions of Section 102 and the rules, regulation or
            orders promulgated thereunder.

12.   GOVERNING LAW & JURISDICTION

      This Appendix shall be governed by and construed and enforced in
      accordance with the laws of the State of Israel applicable to contracts
      made and to be performed therein, without giving effect to the principles
      of conflict of laws. The competent courts of Tel-Aviv, Israel shall have
      sole jurisdiction in any matters pertaining to this Appendix.

                                      * * *

DATE APPROVED BY BOARD OF DIRECTORS:            November 25, 2004

DATE APPROVED BY STOCKHOLDERS:                  MARCH 28, 2005

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