Document:

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                                 EXHIBIT 10.1.1

                                                                        OPTION #

NEITHER THIS OPTION, NOR THE SHARES REPRESENTED BY THIS OPTION, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW
OF ANY STATE, AND THEREFORE THEY MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR ASSIGNED UNLESS REGISTERED UNDER THE APPLICABLE PROVISIONS OF
SUCH ACTS OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION FROM LEGAL COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

                                    RECITALS
                                    --------

         A.       Effective August 17, 1997, Nogatech, Inc., a California
corporation (the "Corporation") and Corex Israeli Industries Ltd. ("Optionee")
entered into a Series A Preferred Stock Purchase Agreement (the "Purchase
Agreement") for the purchase by Optionee of Three Hundred Eighteen Thousand Four
Hundred Seventy-one (318,471) shares of Series A Preferred Stock from the
Corporation.

         B.       In connection with the terms and conditions of the Purchase
Agreement, the Corporation has agreed to issue to Optionee an option to purchase
shares of the Corporation's Common Stock in accordance with the terms and
conditions herein.

                                     OPTION
                                     ------

         In exchange for consideration the sufficiency of which is hereby
acknowledged by the parties hereto, the Corporation hereby grants to Optionee
the right to purchase from the Corporation up to Three Hundred Eighteen Thousand
Four Hundred Seventy-one (318,471) shares of the Common Stock of the Corporation
(the "Option Shares"), subject to the following terms and conditions:

         1. TERM. Subject to Sections 2 and 4 below, this Option may be
exercised in whole or in increments of not less than Ten Thousand (10,000)
Option Shares at any time from the date of issuance of this Option through
August 17, 1999 (the "Exercise Period").

         2.       MATERIAL EVENTS.

                  a.       INITIAL PUBLIC OFFERING. In the event that the
Corporation files a registration statement ("the Registration Statement") for
the initial public offering pursuant to the Securities Act of 1933, as amended,
of the Corporation's Common Stock resulting in gross cash proceeds to the
Corporation in excess of Ten Million U.S. Dollars ($10,000,000) (the "IPO"), the
Corporation shall provide written notice of such filing to

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Optionee (the "Corporation IPO Notice"). Within twenty (20) days after
Optionee's receipt of the Corporation IPO Notice (the "IPO Exercise Date"),
Optionee must notify the Corporation in accordance with Section 4 below if
Optionee intends to exercise this Option, which notice may state that such
exercise shall be effective contingent upon and immediately prior to the
consummation of the IPO. Thereafter, so long as the Corporation consummates the
IPO within one hundred eighty (180) days after the filing of its Registration
Statement (the "IPO Closing Date"), Optionee shall have no further rights
hereunder and this Option shall be terminated. If the Corporation fails to
consummate such IPO within such time, then to the extent this Option was not
exercised as provided herein or contingent upon the consummation of the IPO,
such Option shall remain in effect subject to Sections 1 and 2.b. herein and
this Section 2.a. in the event of further filings of Registration Statements for
an IPO. During the period of time between the IPO Exercise Date and the IPO
Closing Date, Optionee shall be prohibited from further exercising this Option.

                  b.       MERGER, TRANSFER OF ASSETS, OR CHANGE OF CONTROL. In
the event (i) of a bona fide transaction whereby the Corporation has received
written terms and an offer for a (A) merger or consolidation in which the
Corporation is not the consolidated or surviving corporation and the controlling
shareholders (or their affiliates) of the Corporation are not the controlling
shareholders of the surviving corporation; or (B) transfer of all or
substantially all of the assets of the Corporation; or (ii) the officers or
directors of the Corporation receive actual knowledge of a bona fide written
offer which would result in a change in the control of the Corporation from the
sale or exchange of more than 51% of the Corporation's outstanding voting
securities (collectively, the "Corporate Sale"), the Corporation shall provide
Optionee written notice of such information (the "Corporate Sale Notice").
Within twenty (20) days after Optionee's receipt of the Corporate Sale Notice
(the "Corporate Sale Exercise Date"), Optionee must notify the Corporation in
accordance with Section 4 below if Optionee intends to exercise this Option,
which notice may state that such exercise shall be effective contingent upon and
immediately prior to the consummation of the Corporate Sale. Thereafter, so long
as the Corporation or its shareholders consummate the Corporate Sale within one
hundred eighty (180) days after furnishing the Corporate Sale Notice to Optionee
(the "Corporate Sale Closing Date"), Optionee shall have no further rights
hereunder and this Option shall be terminated. If the Corporation or its
shareholders fail to consummate the Corporate Sale within such time, then to the
extent this Option was not exercised as provided herein or contingent upon the
sale consummation of the Corporate Sale, such Option shall remain in effect
subject to Sections 1 and 2.a. herein and this Section 2.b. in the event of
further Corporate Sales. During the period of time between the Corporate Sale
Exercise Date and the Corporate Sale Closing Date, Optionee shall be prohibited
from further exercising this Option.

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         3.       PURCHASE PRICE. The purchase price for each share of the
Corporation's Common Stock purchasable hereunder shall be One and 57/100 U.S.
Dollars (U.S. $1.57) (the "Option Exercise Price"), although this Option shall
only be exercisable pursuant to Section 4 (below).

         4.       EXERCISE OF OPTION. The Option may be exercised by Optionee as
follows:

                  a.       OPTION EXERCISEABLE IN INCREMENTS. Optionee may
exercise this Option, in whole or in increments of not less than Ten Thousand
(10,000) Option Shares, by providing written notice (the "Notice") to the
Corporation of exercise pursuant to the terms and conditions of Section 4.b.
herein. Optionee may exercise this Option up to Twenty (20) times during the
Term of this Option or until such time as Optionee has exercised all of the
Option Shares subject to this Option, whichever is earlier to occur.

                  b.       NOTICE OF EXERCISE. The Notice shall set forth the
Optionee's election to exercise the Option and the number of shares with respect
to which the Option is being exercised, and shall be signed by the Optionee. The
Notice, other than the notice required under Sections 2.a. and 2.b. herein
(collectively, the "Material Events Notices") , shall be accompanied by payment
of the appropriate exercise price in cash or a cash equivalent. The Option shall
be deemed exercised upon the Corporation's receipt of the Notice accompanied by
the appropriate exercise price. Payment for Options exercised in connection with
the Material Events Notices (the "Material Events Options") shall be delivered
to the Corporation no later than five (5) days following receipt from the
Corporation of notice informing Optionee of the consummation date of the IPO or
Corporate Sale, as applicable. Notwithstanding anything contrary herein, all
Material Events Options for which payment has not been received by the
Corporation as set forth above shall be deemed terminated.

                  Certificates for shares purchased hereunder shall be delivered
to the Optionee within thirty (30) business days after the date on which this
Option shall have been exercised as aforesaid other than the Material Events
Options, but Optionee shall be deemed the record owner of such Option Shares as
of and from the close of business on the date on which the Notice, together with
the payment, is received. Certificates for shares purchased in connection with
the Material Events Options hereunder shall be delivered to the Optionee within
thirty (30) business days after receipt of payment therefor, but Optionee shall
be deemed the record owner of the related Option Shares as of and from the close
of business on the date on which such payment is received.

         5.       FRACTIONAL INTEREST. The Corporation shall not be required to
issue any fractional shares on the exercise of this Option.

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         6.       OPTION CONFERS NO RIGHTS OF SHAREHOLDER. Optionee shall not
have any rights as a shareholder of the Corporation with regard to the Option
Shares prior to actual exercise resulting in the purchase of the Option Shares.

         7.       INVESTMENT REPRESENTATION. Neither this Option nor the Option
Shares issuable upon the exercise of this Option have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under the
California Corporate Securities Law of 1968. Optionee acknowledges by acceptance
of the Option that (a) it has acquired this Option for investment and not with a
view toward distribution; (b) it has a pre-existing personal or business
relationship with the Corporation, or its executive officers, or by reason of
its business or financial experience it has the capacity to protect its own
interests in connection with the transaction; and (c) it is an accredited
investor as that term is defined in Regulation D promulgated under the
Securities Act. Optionee agrees that any Option Shares issuable upon exercise of
this Option will be acquired for investment and not with a view toward
distribution; and acknowledges that to the extent such Option Shares will not be
registered under the Securities Act and applicable state securities laws, that
such Option Shares may have to be held indefinitely unless they are subsequently
registered or qualified under the Securities Act and applicable state securities
laws; or, based on an opinion of counsel reasonably satisfactory to the
Corporation, an exemption from such registration and qualification is available.
Optionee, by acceptance hereof, consents to the placement of the following
restrictive legend, or similar legend, on each certificate to be issued to
Optionee by the Corporation in connection with the issuance of such Option
Shares:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES
LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS (A) THERE
IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR LAWS COVERING SUCH
SECURITIES, OR (B) THE OPTIONEE RECEIVES AN OPINION OF COUNSEL FOR THE OPTIONEE
OF THE SECURITIES SATISFACTORY TO THE CORPORATION, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND ANY FURTHER QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE LAW."

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         8.       STOCK FULLY PAID, RESERVATION OF SHARES. All Option Shares
that may be issued upon the exercise of the rights represented by this Option
and Common Stock will, upon issuance, be fully paid and nonassessable, and free
from all taxes, liens and charges with respect to the issue thereof. The
Corporation agrees at all times during the Exercise Period to have authorized
and reserved, for the exclusive purpose of issuance and delivery upon exercise
of this Option, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented hereby.

         9.       ADJUSTMENT OF OPTION EXERCISE PRICE AND NUMBER OF SHARES. The
number and kind of securities purchasable under the exercise of the Option, and
the Option Price shall be subject to adjustment from time to time on the same
day as the occurrence of certain events, as follows:

                  a.       SUBDIVISIONS OR COMBINATIONS OF SHARES. If the
Corporation at any time while this Option remains outstanding and unexpired
shall subdivide or combine its Common Stock, the Option Exercise Price, and the
number of Shares issuable upon exercise hereof shall be proportionately
adjusted.

                  b.       STOCK DIVIDENDS. If the Corporation at any time while
this Option is outstanding and unexpired shall pay a dividend payable in shares
of Common Stock (except as a distribution specifically provided for in the
foregoing subsection 9.a.) then the Option Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Option Exercise Price in effect immediately prior to such date of determination
by a fraction (i) the numerator of which shall be the total number of Shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of Shares of Common
Stock outstanding immediately after such dividend or distribution and the number
of Option Shares subject to this Option shall be proportionately adjusted.

                  c.       NO IMPAIRMENT. The Corporation will not, by amendment
of its Articles of Incorporation or through any dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 9, and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of Optionee
against impairment.

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                  d.       NOTICE OF ADJUSTMENTS. Whenever the Option Exercise
Price shall be adjusted pursuant to the provisions hereof, the Corporation shall
within thirty (30) days after such adjustment deliver a certificate signed by
its Chief Financial Officer to Optionee setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Option Exercise Price, after
giving effect to such adjustment.

         10.      REPRESENTATIONS AND OPTIONS. This Option is issued and
delivered on the basis of the following:

                  a.       CORPORATE AUTHORIZATION. This Option has been duly
authorized and executed by the Corporation, and when delivered will be the valid
and binding obligation of the Corporation, enforceable in accordance with the
terms hereof.

                  b.       OPTION AUTHORIZATION. The Option has been duly
authorized by the Corporation and, when issued in accordance with the terms
hereof, will be validly issued.

                  c.       ARTICLES OF INCORPORATION. The rights, preferences,
privileges and restrictions granted to or imposed upon the Shares of Common
Stock and Optionee are as set forth in the Corporation's Articles of
Incorporation, as amended, a true and complete copy of which has been delivered
to the Optionee.

                  d.       RESERVATION OF SHARES. The Shares of Common Stock
issuable upon exercise of this Option have been duly authorized and reserved
and, when issued in accordance with the terms of the Corporation's Articles of
Incorporation, as amended, will be validly issued, fully paid and nonassessable.

                  e.       DELIVERY. The execution and delivery of this Option
are not, and the issuance of the Shares upon exercise of this Option in
accordance with the terms hereof will not be, inconsistent with the
Corporation's Articles of Incorporation or Bylaws; do not and will not
contravene any law, governmental rule or regulation, judgment or order
applicable to the Corporation; and do not and will not contravene any provision
of, or constitute a default under, any indenture, mortgage, contract or other
instrument of which the Corporation is a party, or by which it is bound or
requires the consent or approval of, the giving of notice to, the registration
with or the taking of any action in respect of or by, any federal, state or
local government authority or agency, or other person, other than qualification
and filing of the appropriate notice with the California Department of
Corporations and a notice filing on Form D with the United States Securities and
Exchange

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Commission by the Corporation within fifteen calendar days following the date of
execution of this Option.

         11.      MISCELLANEOUS

                  a.       SURVIVAL. Subject to Sections 2 a. and 2.b. herein,
the covenants and agreements made herein shall survive the Closing of the
transactions contemplated hereby and shall end upon the consummation of an IPO.

                  b.       OPTION AGREEMENT. This Option and any other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between and among the parties with regard to the subjects hereof and
thereof.

                  c.       GOVERNING LAW. This Option shall be governed by and
construed in accordance with the laws of the State of California, applicable to
contracts between California residents entered into and to be performed entirely
within the State of California.

                  d.       DISPUTES. Any dispute arising out of the transactions
contemplated by this Option shall be adjudicated by a court of competent
jurisdiction sitting in the city of Tel Aviv/Jaffa, subject, in any event, to
the provisions of section 11.c. of this Option. The parties hereby submit
themselves to the exclusive jurisdiction of such courts for the purposes hereof.

                  e.       SUCCESSORS AND ASSIGNES. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.

                  f.       NOTICE. Any notice, payment, report or other
communication required or permitted to be given by one party to any other party
by this Option shall be in writing and either (i) served personally on the other
party or parties; (ii) sent by express, registered or certified first class
mail, postage prepaid, addressed to the other party or parties at its or their
address or addresses as indicated next to their signatures below, or to such
other address as any addressee shall have theretofore furnished to the other
parties by like notice; (iii) delivered by commercial courier to the other party
or parties; or (iv) sent by facsimile. Such notice shall be deemed received (A)
on the third day after sending if sent by one day courier; (B) to the extent
such day is a business as recognized by the country of sender's principal place
of business, on the day of transmission of such notice by facsimile, or, to the
extent such day is not a business as recognized by the country of sender's
principal place of business, on the first business day of the sender following
the day of

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transmission, in each case if the recipient has the capability to receive a
facsimile at its address, the sender has the capability of obtaining from its
facsimile machine a confirmation of transmission and the sender mails to the
recipient a copy of such confirmation by regular first class mail no later than
the next business day (as recognized by the country of sender's principal place
of business) following such transmission; and (C) upon receipt if sent by other
methods.

                  g.       ATTORNEYS FEES. If either party to this Option shall
bring any action for any relief against the other, declaratory or otherwise,
arising out of this Option, the losing party shall pay to the prevailing party a
reasonable sum as determined by the court for attorneys fees incurred in
bringing such suit and/or enforcing any judgment granted therein, all of which
shall be deemed to have accrued upon the commencement of such action and shall
be paid whether or not such action is prosecuted to judgment. Any judgment or
order entered in such action shall contain a specific provision providing for
the recovery of attorneys fees and costs incurred in enforcing such judgment.
For the purposes of this section, attorneys fees shall include, without
limitation, fees incurred in the following: (1) post-judgment motions; (2)
contempt proceedings; (3) garnishment, levy and debtor and third-party
examinations; (4) discovery; and, (5) bankruptcy litigation.

         Should judicial proceedings be commenced to enforce or carry out this
provision or any award or judgment in connection with this Option, the
prevailing party in such proceedings shall be entitled to reasonable attorneys'
fees and costs in addition to other relief. Either party shall have the right,
prior to receiving an arbitration award, to obtain preliminary relief from a
court of competent jurisdiction to avoid injury or prejudice to that party.

                  h.       DESCRIPTIVE HEADINGS. The headings used herein are
descriptive only and for the convenience of identifying provisions, and are not
determinative of the meaning or effect of any such provisions.

         AGREED BY UNDERSIGNED AND BINDING ON OPTIONEE THAT THIS OPTION
         SUPERSEDES AND REPLACES ANY AND ALL EXISTING OPTIONS OF THE SAME NUMBER
         OF OPTION SHARES.

Dated:  August 17, 1997                            NOGATECH, INC.

                                                 By: /s/ A. Heiman
                                                   Dr. Arie Heiman, President

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                                   Exhibit 10.1.2

                                                                     Option #___

THE SECURITIES REPRSENTED BY OR UNDERLYING THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH A
DISTRIBUTION THEREOF. THE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT AN OPINION OF LEGAL
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SECURITIES REPRESENTED BY OR UNDERLYING THIS INSTRUMENT ARE SUBJECT TO
RESTRICTIONS ON TRANSFER PURSUANT TO REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
EXCEPT PURSUANT TO THE PROVISIONS UNDER REGULATION S OR PURSUANT TO REGISTRATION
UNDER SUCH SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.

THE OPTIONS AND OPTION SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT,
AND (i) THE OPTIONS AND THE OPTION SHARES MAY NOT BE EXERCISED, OFFERED OR SOLD
BY OR ON BEHALF OF U.S. PERSONS, (ii) THE OPTIONS MAY NOT BE EXERCISED IN THE
UNITED STATES AND (iii) THE OPTION SHARES MAY NOT BE DELIVERED IN THE UNITED
STATES UNLESS, IN EACH CASE, THERE IS A REGISTRATION STATEMENT IN EFFECT
GOVERNING THE OPTIONS AND OPTION SHARES OR THERE IS AVAILABLE AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                                     OPTION

         In exchange for consideration the sufficiency of which is hereby
acknowledged by the parties hereto, the Corporation hereby grants to Hapoalim
Nechasim (Menayot) Ltd. ("Optionee"), a wholly owned subsidiary of Bank Hapoalim
B.M., the right to purchase from the Corporation up to Four Hundred and Eighty
Thousand Four Hundred Seventeen (480,417) shares of the Common Stock of the
Corporation (the "Option Shares"), subject to the following terms and
conditions:

         1.       TERM.

                  a. Subject to Sections 2 and 4 below, this Option may be
         exercised at any time during the period beginning on the date hereof
         and ending on May 1, 2001 (the "Exercise Period").

                  b. Notwithstanding anything to the contrary herein, this
         Option shall only be exercisable so long as Bank Hapoalim B.M. makes
         available or

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         certifies its willingness to make available, to Nogatech Ltd., a
         wholly-owned subsidiary of the Corporation, a continuous line of
         credit of up to Two Million Dollars ($2,000,000), or such lower amount
         (including zero) as is requested by the Corporation or Nogatech Ltd.

         2.       MATERIAL EVENTS.

                  a. INITIAL PUBLIC OFFERING. In the event that the Corporation
files a registration statement ("the Registration Statement") for an initial
public offering, on any recognized public securities exchange, including an
initial public offering pursuant to the Securities Act of 1933, as amended, of
the Corporation's Common Stock resulting in gross cash proceeds to the
Corporation in excess of Ten Million U.S. Dollars ($10,000,000) (the "IPO"), the
Corporation shall provide written notice of such filing to Optionee (the
"Corporation IPO Notice"). Within twenty (20) days after Optionee's receipt of
the Corporation IPO Notice (the "IPO Exercise Date"), Optionee must notify the
Corporation in accordance with Section 4 below if Optionee intends to exercise
this Option, which notice may state that such exercise shall be effective
contingent upon and immediately prior to the consummation of the IPO.
Thereafter, so long as the Corporation consummates the IPO within one hundred
and twenty (120) days after the filing of its Registration Statement (the "IPO
Closing Date"), Optionee shall have no further rights hereunder (other than the
completion of such exercise and the rights specified in Section 10 herein) and
this Option shall be terminated if not so exercised. If the Corporation fails to
consummate such IPO within such time, then to the extent this Option was not
exercised , such Option shall remain in effect subject to Sections 1 and 2.b.
herein and this Section 2.a. in the event of further filings of Registration
Statements for an IPO. During the period of time between the IPO Exercise date
and the IPO Closing Date, Optionee shall be prohibited from further exercising
this Option.

         b. MERGER, TRANSFER OF ASSETS, OR CHANGE OF CONTROL. In the event (i)
of a bona fide transaction whereby the Corporation has received written terms
and an offer for a (A) merger or consolidation in which the Corporation is not
the consolidated or surviving corporation and the controlling shareholders (or
their affiliates) of the Corporation are not the controlling shareholders of the
surviving corporation; or (B) transfer of all or substantially all of the assets
of the Corporation; or (ii) the officers or directors of the Corporation receive
actual knowledge of a bona fide written offer which would result in a change in
the control of the Corporation from the sale or exchange of more than 51% of the
Corporation's outstanding voting securities (collectively, the "Corporate
Sale"), the Corporation shall provide Optionee written notice describing the
material terms of the Corporate Sale including without limitation, price (the
"Corporate Sale Notice"). Within twenty (20) days after Optionee's receipt of
the Corporate Sale Notice (the "Corporate Sale Exercise Date"), Optionee must
notify the Corporation in accordance with Section 4 below if Optionee intends to
exercise this Option, which notice may state that such exercise shall be
effective contingent upon and immediately prior to the consummation of the
Corporate Sale. Thereafter, so long as the Corporation or its shareholders
consummate the Corporate Sale within one hundred and twenty (120) days after
furnishing the Corporate Sale Notice to Optionee (the "Corporate Sale Closing
Date"), Optionee shall have no further rights hereunder (other than the
completion of such exercise and the rights specified in Section 10 herein) and
this Option shall be terminated if not so exercised. If the Corporation or its
shareholders fail to

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consummate the Corporate Sale within such time, then to the extent this Option
was not exercised, such Option shall remain in effect subject to Sections 1 and
2.a. herein and this Section 2.b. in the event of further Corporate Sales.
During the period of time between the Corporate Sale Exercise Date and the
Corporate Sale Closing Date, Optionee shall be prohibited from further
exercising this Option.

         3. PURCHASE PRICE. The purchase price for each share of the
Corporation's Common Stock purchasable hereunder shall be One and 4.07628/100
U.S. Dollars (U.S. $1.0407628) (the "Option Exercise Price"), although this
Option shall only be exercisable pursuant to Section 4 (below).

         4. EXERCISE OF OPTION. The Option may be exercised by Optionee as
follows:

                  a. OPTION EXERCISABLE IN INCREMENTS. Optionee may exercise
this Option, in whole or in increments of not less than Ten Thousand (10,000)
Option Shares, by providing written notice (the "Notice") to the Corporation of
exercise pursuant to the terms and conditions of Section 4.b. herein.

                  b. NON-U.S. PERSON. It shall be a condition to the exercise of
this Option that the Optionee certify to the Corporation, at the time of
exercise, either that he or it is not a U.S. Person (as defined in Regulation S
under the Securities Act of 1933, as amended (the "Securities Act") and that
this Option is not being exercised on behalf of a U.S. Person, or to provide an
opinion of counsel that the Option and the Option Shares to be delivered upon
exercise thereof have been registered under the Securities Act or that an
exemption from the registration requirements of the Securities Act is available.
It shall be a further condition to the exercise of this Option that the Option
may not be exercised in the United States and the Option Shares may not be
delivered to the United States absent registration under the Securities Act or
an available exemption from registration.

                  c. NOTICE OF EXERCISE. The Notice shall set forth the
Optionee's election to exercise the Option and the number of shares with respect
to which the Option is being exercised, and shall be signed by the Optionee. The
Notice, other than the notice required under Sections 2.a. and 2.b. herein
(collectively, the "Material Events Notices") , shall be accompanied by payment
of the appropriate exercise price in cash or a cash equivalent. The Option shall
be deemed exercised upon the Corporation's receipt of the Notice accompanied by
the appropriate exercise price. Payment f or Options exercised in connection
with the Material Events Notices (the "Material Events Options") shall be
delivered to the Corporation upon the earlier of (i) 60 days following receipt
from the Corporation of notice informing Optionee of the consummation date of
the IPO or Corporate Sale, as applicable, and (ii) the consummation date of the
IPO or Corporate Sale, as applicable.

Certificates for shares purchased hereunder shall be delivered to the Optionee
within thirty (30) business days after the date on which this Option shall have
been exercised as aforesaid other than the Material Events Options, but Optionee
shall be deemed the record owner of such Option Shares as of and from the date
on which the Notice, together with the payment, is received. Certificates for
shares purchased in connection with the Material Events Options hereunder shall
be delivered to the Optionee within thirty (30) business days after receipt of
payment therefor, but

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<PAGE>

Optionee shall be deemed the record owner of the related
Option Shares as of and from the date on which such payment is received.

                  d. NON-TRANSFERABLE. Notwithstanding anything to the contrary
herein, the Option is personal in nature and is non-transferable, except for
transfers to (a) any entity of which more than 50% of its outstanding voting
securities are controlled by Bank Hapoalim B.M, and (b) any third party to which
the Corporation gives its prior written consent.

         5. FRACTIONAL INTEREST. The Corporation shall not be required to issue
any fractional shares on the exercise of this Option. Should the exercise of the
Option results in a fractional share, the Corporation shall pay the Optionee
concurrent with the issuance of the Option Shares, the value of such fractional
share.

         6. OPTION CONFERS NO RIGHTS OF SHAREHOLDER. Optionee shall not have any
rights as a shareholder of the Corporation with regard to the Option Shares
prior to actual exercise resulting in the purchase of the Option Shares.

         7. INVESTMENT REPRESENTATION. Neither this Option nor the Option Shares
issuable upon the exercise of this Option have been registered under the
Securities Act, or any state securities laws.. The Optionee acknowledges by
acceptance of the Option that as of the date of this Option and at the time of
exercise (a) Optionee has acquired this Option or the Option Shares, as the case
may be, for investment and not with a view to distribution; (b) Optionee has a
pre-existing personal or business relationship with the Corporation, or its
executive officers, or by reason of its business or financial experience
Optionee has the capacity to protect its own interests in connection with the
transaction; (c) Optionee is an accredited investor as that term is defined in
Regulation D promulgated under the Securities Act; and (d) Optionee meets all of
the requirements for a purchaser to qualify for exemption under Regulation S
promulgated under the Securities Act. Optionee acknowledges receiving Audited
Consolidated Financial Statements of the Corporation and Nogatech Ltd. for the
years ended December 31, 1996 and 1995, and internally prepared (unaudited)
Consolidated Financial Statements of the Corporation and Nogatech Ltd. for the
year ended December 31, 1997. Optionee further acknowledges and agrees that the
Corporation has made no representations as to the business or business success
of the Corporation or Subsidiary. Optionee agrees that the Option Shares
issuable upon exercise of this Option will be acquired for investment and not
with a view to distribution and such Option Shares will not be registered under
the Securities Act and applicable state securities laws and that such Option
Shares may have to be held indefinitely unless they are subsequently registered
or qualified under the Securities Act and applicable state securities laws; or,
based on an opinion of counsel reasonably satisfactory to the Corporation, an
exemption from such registration and qualification is available. Optionee, by
acceptance hereof, consents to the placement of the following restrictive
legends, or similar legends, on each certificate to be issued to Optionee by the
Corporation in connection with the issuance of such Option Shares:

"THE SECURITIES REPRESENTED BY OR UNDERLYING THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OR QUALIFIED

                                      -4-
<PAGE>

UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR LAWS COVERING SUCH SECURITIES, OR (B) THE HOLDER RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THE SECURITIES SATISFACTORY TO THE CORPORATION,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND THE
QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE LAW."

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER PURSUANT TO REGULATION S PROMULGATED UNDE R THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT
PURSUANT TO THE PROVISIONS UNDER REGULATION S OR PURSUANT TO REGISTRATION UNDER
SUCH SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.

         8. STOCK FULLY PAID, RESERVATION OF SHARES. All Option Shares that may
be issued upon the exercise of the rights represented by this Option and Common
Stock will, upon issuance, be fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issue thereof. The Corporation
agrees at all times during the Exercise Period to have authorized and reserved,
for the exclusive purpose of issuance and delivery upon exercise of this Option,
a sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented hereby.

         9. ADJUSTMENT OF OPTION EXERCISE PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable under the exercise of the Option, and the
Option Price shall be subject to adjustment from time to time on the same day as
the occurrence of certain events, as follows:

                  a. SUBDIVISIONS OR COMBINATIONS OF SHARES. If the Corporation
at any time while this Option remains outstanding and unexpired shall subdivide
or combine its Common Stock, the Option Exercise Price, and the number of Shares
issuable upon exercise hereof shall be proportionately adjusted.

                  b. STOCK DIVIDENDS. If the Corporation at any time while this
Option is outstanding and unexpired shall pay a dividend payable in shares of
Common Stock (except as a distribution specifically provided for in the
foregoing subsection 9.a.) then the Option Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Option Exercise Price in effect immediately prior to such date of determination
by a fraction (i) the numerator of which shall be the total number of Shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of Shares of Common
Stock outstanding immediately after such dividend or distribution and the number
of Option Shares subject to this Option shall be proportionately adjusted.

                  c. NO IMPAIRMENT. The Corporation will not, by amendment of
its Articles of Incorporation or through any dissolution, issue or sale of
securities, or any

                                      -5-
<PAGE>

other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Corporation, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 9, and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of Optionee against impairment.

                  d. NOTICE OF ADJUSTMENTS. The Corporation shall provide
Optionee with written notice, at least twenty (20) days prior to an adjustment
of the Option Exercise Price pursuant to the provisions hereof. To the extent
the Option has not been exercised, in whole or in part, the Corporation shall,
within thirty (30) days after such adjustment, deliver a certificate signed by
its Chief Financial Officer to Optionee setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Option Exercise Price, after
giving effect to such adjustment.

         10.      Piggyback Registration

                  a. THE CORPORATION'S OBLIGATION TO REGISTER. At any time
beginning immediately after the exercise of the Option, in whole or in part, and
ending 3 years after the consummation of an initial public offering of the
Corporations capital stock pursuant to the Securities Act, if the Corporation at
any time proposes to initiate a registration of its securities under the
Securities Act on its own or upon request of other shareholders, and thereafter
registers any of its securities under the Securities Act (other than a
registration effected solely to implement an employee benefit plan, to effect an
exchange, merger or acquisition of shares pursuant to Form S-4 or equivalent
form, a transaction effected in order to comply with Rule 145 of the United
States Securities and Exchange Commission or any other United States federal
agency at the time administering the Securities Act ("Commission"), or any other
form or type of registration in which Option Shares cannot be included pursuant
to Commission rule), it will give written notice to the Optionee of its
intention to do so at least twenty (20) days prior to the filing of any such
registration (stating the intended method and terms of disposition of such
stock, including a list of the jurisdictions in which the Corporation intends to
qualify such stock). Upon the written request from the Optionee within fifteen
(15) days after receipt of the Corporation's notice to the Optionee subject to
the limits contained in this Section, the Corporation shall afford the Optionee
an opportunity to include in such registration all or any part of the Option
Shares then held by the Optionee to the extent requisite to permit such sale or
other disposition by the Optionee of the Option Shares so registered and to the
extent permissible under applicable securities laws. All expenses in connection
with such registration shall be borne by the Corporation, except that the
Optionee shall bear its pro rata share of underwriters' commissions and
discounts. .

                  b. CUTBACKS. In connection with an offering involving an
underwriting of shares of the Corporation's capital stock, the Corporation shall
not be required under Section 10.a. to include any of the Optionees Option
Shares in such underwriting unless the Optionee accepts the terms of the
underwriting as agreed upon between the Corporation and the underwriters
selected by it, and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by the
Corporation. If the underwriter managing such registration notifies the Optionee
in writing that market or economic

                                      -6-
<PAGE>

conditions limit the amount of securities which may reasonably be expected to be
sold, the Optionee will only be allowed to register such number of Option Shares
as permitted by the underwriters up to the maximum amount requested by the
Optionee, and in proportion to the number of shares held by all the security
holders of the Corporation entitled to any registration rights and included in
such registration.

         11. REPRESENTATIONS AND OPTIONS. The Corporation represents and
warrants to the Optionee as follows:

                  a. CORPORATE AUTHORIZATION. This Option has been duly
authorized and executed by the Corporation, and when delivered will be the valid
and binding obligation of the Corporation, enforceable in accordance with the
terms hereof.

                  b. OPTION AUTHORIZATION. The Option has been duly authorized
by the Corporation and, when issued in accordance with the terms hereof, will be
validly issued.

                  c. ARTICLES OF INCORPORATION. The rights, preferences,
privileges and restrictions granted to or imposed upon the Shares of Common
Stock are as set forth in the Corporation's Articles of Incorporation, as
amended, a true and complete copy of which has been delivered to the Optionee.

                  d. RESERVATION OF SHARES. The Shares of Common Stock issuable
upon exercise of this Option have been duly authorized and reserved and, when
issued in accordance with the terms of the Corporation's Articles of
Incorporation, as amended, will be validly issued, fully paid and nonassessable,
and not subject to any preemptive rights.

                  e. DELIVERY. The execution and delivery of this Option are
not, and the issuance of the Shares upon exercise of this Option in accordance
with the terms hereof will not be, inconsistent with the Corporation's Articles
of Incorporation as currently in effect; do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to the
Corporation; and do not and will not contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other instrument of which
the Corporation is a party, or by which it is bound or requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
action in respect of or by, any federal, state or local government authority or
agency, or other person, other than qualification and filing of the appropriate
notice with the California Department of Corporations and a notice filing on
Form D with the United States Securities and Exchange Commission by the
Corporation within fifteen calendar days following the date of execution of this
Option.

         12.      MISCELLANEOUS

                  a. SURVIVAL. Subject to Sections 2 a. and 2.b. herein, the
covenants and agreements made herein shall survive the Closing of the
transactions contemplated hereby..

                                      -7-
<PAGE>

                  b. OPTION AGREEMENT. This Option and any other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between and among the parties with regard to the subjects hereof and
thereof.

                  c. GOVERNING LAW. This Option shall be governed by and be
construed in accordance with the laws of the State of California, applicable to
contracts between California residents entered into and to be performed entirely
within the State of California.

                  d. DISPUTES. Any dispute arising out of the transactions
contemplated by this Option shall be adjudicated by a court of competent
jurisdiction sitting in the city of Tel Aviv/Jaffa, subject, in any event, to
the provisions of section 11.c. of this Option. The parties hereby submit
themselves to the exclusive jurisdiction of such courts for the purposes hereof.

                  e. SUCCESSORS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, heirs, executors and administrators of the parties hereto.

                  f. NOTICE. Any notice, payment, report or other communication
required or permitted to be given by one party to any other party by this Option
shall be in writing and either (i) served personally on the other party; (ii)
sent by express, registered or certified air mail, postage prepaid, addressed to
the other party at its address as indicated next to its signatures below, or to
such other address as any addressee shall have theretofore furnished to the
other parties by like notice; (iii) delivered by commercial courier to the other
party or parties; or (iv) sent by facsimile. Such notice shall be deemed
received (A) on the third day after sending if sent by one day courier; (B) to
the extent such day is a business as recognized by the country of sender's
principal place of business, on the day of transmission of such notice by
facsimile, or, to the extent such day is not a business as recognized by the
country of sender's principal place of business, on the first business day of
the sender following the day of transmission, in each case if the recipient has
the capability to receive a facsimile at its address, the sender has the
capability of obtaining from its facsimile machine a confirmation of
transmission and the sender mails to the recipient a copy of such confirmation
by regular air mail no later than the next business day (as recognized by the
country of sender's principal place of business) following such transmission;
and (C) upon receipt if sent by other methods.

                  g. ATTORNEYS FEES. If either party to this Option shall bring
any action for any relief against the other, declaratory or otherwise, arising
out of this Option, the losing party shall pay to the prevailing party a
reasonable sum as determined by the court for attorneys fees incurred in
bringing or defending such suit and/or enforcing any judgment granted therein,
all of which shall be deemed to have accrued upon the commencement of such
action and shall be paid whether or not such action is prosecuted to judgment.
Any judgment or order entered in such action shall contain a specific provision
providing for the recovery of attorneys fees and costs incurred in enforcing
such judgment. For the purposes of this section, attorneys fees shall include,
without limitation, fees incurred in the following: (1) post-judgment motions;
(2) contempt proceedings; (3) garnishment, levy and debtor and third-party
examinations; (4) discovery; and, (5) bankruptcy litigation.

                                      -8-
<PAGE>

                  h. DESCRIPTIVE HEADINGS. The headings used herein are
descriptive only and for the convenience of identifying provisions, and are not
determinative of the meaning or effect of any such provisions.

Dated: June 24           , 1998                       NOGATECH, INC.
      -------------------
                                                   By: /s/ Nathan Hod
                                                         Nathan Hod, Chairman
                                                               of the Board

                                      -9-

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