Document:

EXHIBIT
10.18

    

    BioLineRx
Ltd.

    

    2003
Share Incentive Plan

    

    (*In
compliance with Amendment No. 132 of the Israeli Tax Ordinance,
2002)

     

    
      
        	
                1.

              	
                Name

              

      

    

    This
plan, as amended from time to time, shall be known as the "BioLineRx Ltd. 2003
Share Incentive Plan" (the "Plan").

     

    
      
        	
                2.

              	
                Purpose

              

      

    

    The
purpose and intent of the Plan is to provide incentive: (i) to retain, in the
employ of the Company and its Affiliates (as defined below), persons of
training, experience and ability, (ii) to attract new employees, directors,
consultants, service providers and other entities, the services of which shall
be considered valuable to the Company by the Board of Directors of the Company,
(iii) to encourage the sense of proprietorship of such persons, and (iv) 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, pursuant to the Plan.

     

    
      
        	
                3.

              	
                Definitions

              

      

    

    For
purposes of the Plan and related documents, including the Incentive Agreement,
the following definitions shall apply:

     

    
      	
               
      

            	
              3.1.

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

            

    

     

    
      	
               
      

            	
              3.2.

            	
              "Approved 102 Option"
      means an Option granted pursuant to Section 102(b) of the Ordinance and
      held in trust by a Trustee (as defined in Section 7) for the benefit of
      Grantee.

            

    

     

    
      	
               
      

            	
              3.3.

            	
              "Approved 102 Security"
      means an Approved 102 Option and/or an Approved 102
  Share.

            

    

     

    
      	
               
      

            	
              3.4.

            	
              "Approved 102 Share"
      means a Share issued pursuant to Section 102(b) of the Ordinance or a
      Share issued upon the exercise of an Approved 102 Option, and held in
      trust by a Trustee (as defined in Section 7) for the benefit of a
      Grantee.

            

    

     

    
      	
               
      

            	
              3.5.

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

            

    

     

    
      	
               
      

            	
              3.6.

            	
              "Capital Gain Security
      (CGS)" as defined in Section
6.4.

            

    

     

    
      	
               
      

            	
              3.7.

            	
              "Cause" means (i)
      commitment of a serious breach of trust, including, but not limited to,
      theft, embezzlement, self-dealing; (ii) prohibited disclosure to
      unauthorized persons or entities of confidential or proprietary
      information of, or relating to, the Company and/or its Affiliates; (iii)
      the engaging by Grantee in any prohibited business or activities
      competitive to the business of the Company and/or its Affiliates; or (iv)
      any other action or omission which may be defined as Cause "justifiable
      cause" or the like in the respective Grantee's employment, consulting or
      service agreement with the Company or an Affiliate,  as
      applicable.

            

    

     

    
      	
               
      

            	
              3.8.

            	
              "Chairman" means the chairman
      of the Committee.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.9.

            	
              "Committee" means a share
      option / share incentive compensation committee appointed by the Board, as
      may be fixed from time to time by the
Board.

            

    

     

    
      	
               
      

            	
              3.10.

            	
              "Companies Law" means the Israeli
      Companies Law 5759-1999, as now in effect or as hereafter
      amended.

            

    

     

    
      	
               
      

            	
              3.11.

            	
              "Company" means BioLineRx
      Ltd.

            

    

     

    
      	
               
      

            	
              3.12.

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

            

    

     

    
      	
               
      

            	
              3.13.

            	
              "Date of Grant" means,
      the date of grant of a Security, as determined by the Board and set forth
      in Grantee’s Incentive Agreement.

            

    

     

    
      	
               
      

            	
              3.14.

            	
              "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
      Controlling Shareholder(s).

            

    

     

    
      	
               
      

            	
              3.15.

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

            

    

     

    
      	
               
      

            	
              3.16.

            	
              "Expiration Date" means
      the date upon which an Option shall expire, as set forth in Section
      10.2.

            

    

     

    
      	
               
      

            	
              3.17.

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

            

    

     

    
      	
               
      

            	
              (i)

            	
              If
      the Shares are listed on any established stock exchange or a national
      market system, including without limitation the NASDAQ National Market
      system, or the NASDAQ SmallCap Market of the NASDAQ Stock Market, the Fair
      Market Value shall be the closing sales price for such Shares (or the
      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 or
      the Committee deems reliable. Without derogating from the above, 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, the Fair Market Value of a Share 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;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              If
      the Shares are regularly quoted by a recognized securities dealer but
      selling prices are not reported, the Fair Market Value shall be the mean
      between the high bid and low 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 or the
      Committee.

            

    

     

    
      	
               
      

            	
              3.18.

            	
              "Grantee" means a person
      who receives or holds a Security under the
Plan.

            

    

     

    
      	
               
      

            	
              3.19.

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

            

    

     

    
      	
               
      

            	
              3.20.

            	
              "Issuance Price" means
      the price for each share issued to a
Grantee.

            

    

     

    
      	
               
      

            	
              3.21.

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

            

    

     

    
      	
               
      

            	
              3.22.

            	
              "Ordinary Income Security
      (OIS)" as defined in Section
6.5.

            

    

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.23.

            	
              "Option" means an option
      to purchase one or more Shares of the Company pursuant to the
      Plan.

            

    

     

    
      	
               
      

            	
              3.24.

            	
              "102 Option" means any Option
      granted pursuant to Section 102 of the Ordinance to any person who is an
      Employee.

            

    

     

    
      	
               
      

            	
              3.25.

            	
              "102 Security" means a
      102 Option and/or a 102 Share.

            

    

     

    
      	
               
      

            	
              3.26.

            	
              "102 Share" means a Share
      issued pursuant to Section 102 of the Ordinance or a Share issued upon the
      exercise of a 102 Option, to any person who is an
  Employee.

            

    

     

    
      	
               
      

            	
              3.27.

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

            

    

     

    
      	
               
      

            	
              3.28.

            	
              "3(i) Security" means a
      3(i) Option and/or a 3(i) Share.

            

    

     

    
      	
               
      

            	
              3.29.

            	
              "3(i) Share" means a
      Share issued pursuant to Section 3(i) of the Ordinance or a Share issued
      upon the exercise of a 3(i) Option, to any person who is an
      Non-Employee.

            

    

     

    
      	
               
      

            	
              3.30.

            	
              "Incentive Agreement"
      means the share option agreement or share incentive agreement between the
      Company and a Grantee that sets out the terms and conditions of a
      Security.

            

    

     

    
      	
               
      

            	
              3.31.

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

            

    

     

    
      	
               
      

            	
              3.32.

            	
              "Plan" means this
      BioLineRx Ltd. 2003 Share Incentive
Plan.

            

    

     

    
      	
               
      

            	
              3.33.

            	
              "Section 102" means section 102
      of the Ordinance as now in effect or as hereafter
  amended.

            

    

     

    
      	
               
      

            	
              3.34.

            	
              "Security" means an
      Option or a Share.

            

    

     

    
      	
               
      

            	
              3.35.

            	
              "Share" means an Ordinary
      Share, NIS 0.01 par value, of the
Company.

            

    

     

    
      	
               
      

            	
              3.36.

            	
              "Transaction" means (i) a
      merger, consolidation or reorganization of the Company with or into any
      other corporation, or (ii) the sale or transfer of all or substantially
      all of the outstanding shares of the Company, (iii) or the sale or
      transfer of all or substantially all of the assets of the
      Company.

            

    

     

    
      	
               
      

            	
              3.37.

            	
              "Unapproved 102
      Option" means an Option
      granted pursuant to Section 102(c) of the
  Ordinance.

            

    

     

    
      	
               
      

            	
              3.38.

            	
              "Unapproved 102 Security"
      means an Unapproved 102 Option and/or an Unapproved 102
    Share.

            

    

     

    
      	
               
      

            	
              3.39.

            	
              "Unapproved 102 Share"
      means a Share issued pursuant to Section 102(c) of the Ordinance or a
      Share issued upon the exercise of an Unapproved 102
  Option.

            

    

     

    
      	
               
      

            	
              3.40.

            	
              "Vesting Dates" means, as
      determined by the Board or by the Committee, the date as of which Grantee
      shall be entitled to exercise the Options or part of the
      Options.

            

    

     

    
      
        	
                4.

              	
                Administration

              

      

    

     

    
      	
               
      

            	
              4.1.

            	
              The
      Plan will be administered by the Board or by a Committee. If a Committee
      is not appointed, the term Committee, whenever used herein, shall mean the
      Board. The Board shall appoint the members of the Committee and may, from
      time to time, remove members from, or add members to, the Committee and
      shall fill vacancies in the Committee however
  caused.

            

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              4.2.

            	
              The
      Committee shall select one of its members as its Chairman and shall hold
      its meetings at such times and places as it shall determine. Actions taken
      by a majority of the members of the Committee, at a meeting at which a
      majority of its members is present, or acts reduced to or approved in
      writing by all members of the Committee, shall be the valid acts of the
      Committee. The Committee may appoint a Secretary, who shall keep records
      of its meetings and shall make such rules and regulations for the conduct
      of its business as it shall deem
advisable.

            

    

     

    
      	
               
      

            	
              4.3.

            	
              Subject
      to the general terms and conditions of the Plan, the Committee shall have
      the full authority in its discretion, from time to time and at any time
      to: (i) designate Grantees to whom Securities shall be granted; (ii)
      determine the number of Shares to be covered by each Option; (iii)
      determine the time or times at which the same shall be granted; (iv)
      determine the Exercise Price of the Options and the Vesting Dates; (v)
      determine the Fair Market Value of the Shares; (vi) make an election as to
      the type of Approved 102 Securities; (vii) designate the type of
      Securities; (viii) determine any conditions on which the Options may be
      exercised and on which such Shares shall be paid for; and (ix) make all
      other determinations necessary or desirable for, or incidental to, the
      administration of the Plan.

            

    

     

    
      	
               
      

            	
              4.4.

            	
              Notwithstanding
      the above, the Committee shall not be entitled to grant Options or issue
      Shares that are not underlying Options to Grantees, however, it will be
      authorized to issue Shares underlying Options which have been granted by
      the Board and duly exercised pursuant to the provisions herein in
      accordance with section 112(a)(5) of the Companies
  Law.

            

    

     

    
      	
               
      

            	
              4.5.

            	
              The
      Committee may, from time to time, adopt such rules and regulations for
      carrying out the Plan as it may deem necessary. No member of the Board or
      of the Committee shall be liable for any act or determination made in good
      faith with respect to the Plan or any Security granted
      thereunder.

            

    

     

    
      	
               
      

            	
              4.6.

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

            

    

     

    
      
        	
                5.

              	
                Eligible
      Grantees

              

      

    

     

    
      	
               
      

            	
              5.1.

            	
              The
      persons eligible for participation in the Plan as Grantees 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 Securties;
      (ii) Non-Employees may only be granted 3(i) Securities; and (iii)
      Controlling Shareholders may only be granted 3(i)
    Securities.

            

    

     

    
      	
               
      

            	
              5.2.

            	
              The
      grant of a Security to a Grantee hereunder, shall neither entitle such
      Grantee to participate, nor disqualify her/him from participating, in any
      other grant of Securities pursuant to the Plan or any other Share
      incentive plan of the Company.

            

    

     

    
      
        	
                6.

              	
                Designation
      of Securities Pursuant to Section
102

              

      

    

     

    
      	
               
      

            	
              6.1.

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

            

    

     

    
      	
               
      

            	
              6.2.

            	
              The
      grant of Approved 102 Securities may be made under the Plan only following
      its adoption by the Board as described in Section 18, and shall be
      conditioned upon the approval of the Plan by the Israeli Tax
      Authorities.

            

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.3.

            	
              Approved
      102 Securities may either be classified as Capital Gain Securities (“CGS”) or Ordinary Income
      Securities (“OIS”).

            

    

     

    
      	
               
      

            	
              6.4.

            	
              Approved
      102 Securities elected and designated by the Company to qualify under the
      capital gain tax treatment in accordance with the provisions of Section
      102(b)(2) shall be referred to herein as CGS.

            

    

     

    
      	
               
      

            	
              6.5.

            	
              Approved
      102 Securities elected and designated by the Company to qualify under the
      ordinary income tax treatment in accordance with the provisions of Section
      102(b)(1) shall be referred to herein as OIS.

            

    

     

    
      	
               
      

            	
              6.6.

            	
              The
      Company’s election of the type of Approved 102 Securities as CGS or OIS
      granted to Employees (the “Election”), shall be
      appropriately filed with the Israeli Tax Authorities before the Date of
      Grant of any Approved 102
Securities.

            

    

    

    Such
Election shall become effective beginning the first Date of Grant of an Approved
102 Security under the Plan and shall remain in effect until at least the end of
the year following the year during which the Company first granted Approved 102
Securities. The Election shall obligate the Company to grant only the type of Approved 102
Security it has elected, and shall apply to all Approved 102 Security granted
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 Securities
simultaneously.

     

    
      	
               
      

            	
              6.7.

            	
              All
      Approved 102 Securities must be held in trust by a Trustee, as described
      in Section 7.

            

    

     

    
      	
               
      

            	
              6.8.

            	
              For
      the avoidance of doubt, the designation of Unapproved 102 Securities and
      Approved 102 Securities shall be subject to the terms and conditions set
      forth in Section 102 of the Ordinance and the regulations promulgated
      thereunder.

            

    

     

    
      	
               
      

            	
              6.9.

            	
              With
      regards to Approved 102 Securities, the provisions of the Plan and/or the
      Incentive 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 Incentive
      Agreement. 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 Incentive
      Agreement, shall be considered binding upon the Company and the
      Grantees.

            

    

     

    
      
        	
                7.

              	
                Trustee

              

      

    

     

    
      	
               
      

            	
              7.1.

            	
              Anything
      herein to the contrary notwithstanding, Approved 102 Securities granted
      under the Plan and/or other shares received subsequently following any
      realization of rights with respect to such Securities, including without
      limitation bonus shares, shall be granted by the Company to a trustee
      designated by the Board and approved by the Israeli Tax Authorities in
      accordance with the provisions of Section 102(a) of the Ordinance (the
      "Trustee"), and
      held for the benefit of the Grantees 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
      event that the requirements for Approved 102 Securities are not met, then
      the Approved 102 Securities may be treated as Unapproved 102 Securities,
      all in accordance with the provisions of Section 102 and regulations
      promulgated thereunder.

            

    

     

    
      	
               
      

            	
              7.2.

            	
              Notwithstanding
      anything to the contrary, the Trustee shall not release any Approved 102
      Shares prior to the full payment of Grantee’s tax liabilities arising from
      Approved 102 Securities which were granted to
  Grantee.

            

    

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              7.3.

            	
              With
      respect to any Approved 102 Securities, subject to the provisions of
      Section 102 and any rules or regulation or orders or procedures
      promulgated thereunder, a Grantee shall not sell or release from trust any
      Approved 102 Share 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
      Grantee.

            

    

     

    
      	
               
      

            	
              7.4.

            	
              Upon
      receipt of Approved 102 Securities, Grantee will sign and undertaking to
      release the Trustee from any liability in respect of any action or
      decision duly taken and bona fide executed in relation with the Plan, or
      any Approved 102 Security granted to Grantee
  thereunder.

            

    

     

    
      	
               
      

            	
              7.5.

            	
              For
      the avoidance of doubt, nothing contained herein shall prevent the Company
      from granting Unapproved 102 Securities and/or 3(i) Securities to a
      trustee designated by the Board, to be held for the benefit of Grantees,
      all in accordance with the terms and conditions specified by the
      Board.

            

    

     

    
      
        	
                8.

              	
                Reserved
      Shares

              

      

    

    The
Company has reserved 2,285,022 authorized but unissued Shares for purposes of
the Plan and any other present or future share incentive plans of the Company,
subject to adjustments as provided in Section 14 (such number is based on a
contemplated 1:20 split of the share capital of the Company, by way of division
of the share capital and/or issuance of bonus shares).  All Shares
under the Plan or under any other present or future share incentive plans, in
respect of which the right of a Grantee hereunder or thereunder to hold or
purchase the same shall, for any reason, terminate, expire or otherwise cease to
exist, shall again be available for issuance and/or grant through Options under
the Plan and such other share incentive plans.

     

    
      
        	
                9.

              	
                Grant
      of Securities

              

      

    

    Each
Security granted pursuant to the Plan shall be evidenced by a written Incentive
Agreement between the Company and Grantee, in such form as the Board or the
Committee shall from time to time approve. Each Incentive Agreement shall state,
inter alia, the number of Shares covered thereby, the type of Security granted
thereunder (whether a CGS, OIS, Unapproved 102 Security or a 3(i) Security), the
dates when the Option may be exercised (if applicable), the Exercise Price (if
applicable), and such other terms and conditions as the Committee at its
discretion may prescribe, such as, without limitation, vesting or reverse
vesting dates, provided that they are consistent with the Plan.

     

    
      	
              10.

            	
              Term
      and Vesting of Securities

            

    

     

    
      	
               
      

            	
              10.1.

            	
              Subject
      to the provisions of this Plan, Options granted to a Grantee under the
      Plan shall vest and become exercisable following the vesting dates and for
      such number of Shares as set forth in such Grantee's Incentive Agreement,
      as determined by the Committee. As well, subject to the Plan, Shares
      issued to a Grantee shall be released from reverse vesting as set forth in
      the Grantee's Incentive Agreement, as determined by the Committee. A
      Security may be subject to such other terms and conditions on the time or
      times when it may be exercised or released from reverse vesting, as
      applicable, as the Committee may deem appropriate. The vesting or reverse
      vesting provisions of individual Securities may
  vary.

            

    

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              10.2.

            	
              Options,
      to the extent not previously exercised, shall terminate forthwith upon the
      earlier of: (i) ten (10) years from the Date of Grant (unless otherwise
      specified in the Option Agreement); (ii) the expiration in accordance with
      Section 15; and (ii) the expiration of any extended period in any of the
      events set forth in section 13.

            

    

     

    
      	
              11.

            	
              Issuance
      Price and Exercise Price

            

    

    The
Issuance Price or Exercise Price per Share issued or covered by each Option, as
applicable, shall be determined by the Committee in its sole and absolute
discretion; provided, however, that such Issuance Price or Exercise Price shall
not be less than the par value of the Shares issued or of the Shares into which
such Option is exercisable, as applicable. Each Incentive Agreement will contain
the Issuance Price or Exercise Price determined for each Grantee.

     

    
      	
              12.

            	
              Exercise
      of Options

            

    

     

    
      	
               
      

            	
              12.1.

            	
              Options
      shall be exercisable pursuant to the terms under which they were awarded
      and subject to the terms and conditions of the
  Plan.

            

    

     

    
      	
               
      

            	
              12.2.

            	
              The
      exercise of an Option shall be made by a written notice of exercise (the
      "Notice of
      Exercise") delivered by Grantee to the Company at its principal
      executive office, specifying the number of Shares to be purchased and
      accompanied by the payment of the Exercise Price, and containing such
      other terms and conditions as the Committee shall prescribe from time to
      time.

            

    

     

    
      	
               
      

            	
              12.3.

            	
              Anything
      herein to the contrary notwithstanding, but without derogating from the
      provisions of Section 13, if any Option has not been exercised and
      the Shares covered thereby not paid for until the Expiration Date, the
      Grantee’s right to such Option and his/her right to acquire the underlying
      Shares of such Option shall terminate, all interests and rights of the
      Grantee in and to the same shall ipso facto expire, and, in the event that
      in connection therewith any Approved 102 Options are still held by the
      Trustee as aforesaid, the trust with respect thereto shall ipso facto
      expire and all of such Approved 102 Options shall again be subject for
      grant as provided in Section 8.

            

    

     

    
      	
               
      

            	
              12.4.

            	
              Each
      payment for Shares shall be in respect of a whole number of Shares, and
      shall be effected in cash or by a cashier's check payable to the order of
      the Company, or such other method of payment acceptable to the
      Company.

            

    

     

    
      	
               
      

            	
              12.5.

            	
              For
      the avoidance of doubt, Grantees shall not have any of the rights or
      privileges of shareholders of the Company in respect of any Shares
      purchasable upon the exercise of any Option, nor shall they be deemed to
      be a class of shareholders or creditors of the Company for purpose of the
      operation of sections 350 and 351 of the Companies Law or any successor to
      such section, until registration of Grantee as holder of such Shares in
      the Company’s register of shareholders upon exercise of the Option in
      accordance with the provisions of the Plan, but in case of Options and
      Shares held by the Trustee, subject to the provisions of Section
      7.

            

    

     

    
      	
              13.

            	
              Termination
      of Engagement

            

    

     

    
      	
               
      

            	
              13.1.

            	
              Subject
      to the provisions of Section 13.2, unless otherwise provided in the
      Grantee’s Incentive Agreement, in the event that a Grantee ceases, for any
      reason, to be employed by or to provide services to the Company or an
      Affiliate, all Options granted to such Grantee will immediately expire
      upon such cessation. For the avoidance of doubt, unless expressly stated
      otherwise in the Grantee's Incentive Agreement, in case of such cessation
      of employment or service, the unvested portion of the Grantee's Option
      shall not continue to vest and shall immediately
  expire.

            

    

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              13.2.

            	
              Notwithstanding
      anything to the contrary hereinabove and unless otherwise determined in
      the Grantee's Incentive Agreement, an Option may be exercised after the
      date of cessation of Optionee's employment or service with the Company or
      any Affiliates during an additional period of time beyond the date of such
      cessation, but only with respect to its vested portion at the time of such
      termination, as follows:

            

    

     

    
      	
               
      

            	
              13.2.1.

            	
              If
      the Grantee’s termination of employment or service is due to such
      Grantee’s death or “Disability” (as hereinafter defined), then any of such
      Grantee’s vested Options (to the extent exercisable at the time of the
      Grantee’s termination of employment or service) shall be exercisable by
      the Grantee’s legal representative, estate of other person to whom the
      Grantee’s rights are transferred by will or by laws of descent of
      distribution for a period of twelve (12) months following such death or
      termination of employment or service due to “Disability” (but in no event
      after the expiration of the Option Term), and shall thereafter
      terminate.

            

    

    

    For
purposes hereof, “Disability” shall mean the
inability, due to illness or injury, to engage in any gainful occupation for
which the individual is suited by education, training or experience, which
condition continues for at least six (6) consecutive months or an aggregate of
six (6) months in any twelve (12)-month period.

     

    
      	
               
      

            	
              13.2.2.

            	
              If
      the Grantee’s termination of employment or service is for any reason other
      than for Cause, then any of such Grantee’s vested Options (to the extent
      exercisable at the time of the Grantee’s termination of employment or
      service) shall be exercisable for a period of ninety (90) days following
      such termination of employment or service, and shall thereafter terminate;
      provided, however, that if the Grantee dies within such ninety-day period,
      such Options shall be exercisable by the Grantee’s legal representative,
      estate or other person to whom the Grantee’s rights are transferred by
      will or by laws of descent of distribution for a period of twelve (12)
      months following the Grantee’s death (but in no event after the expiration
      of the Option Term), and shall thereafter
  terminate.

            

    

     

    
      	
               
      

            	
              13.2.3.

            	
              In
      the event of termination for Cause, any Option held by such Grantee
      (whether or not vested) shall terminate immediately and the Grantee shall
      have no further rights to purchase Shares pursuant to such
      Option.

            

    

     

    
      	
               
      

            	
              13.3.

            	
              With
      respect to Unapproved 102 Securities, if the Grantee ceases to be employed
      by the Company or any Affiliate, the Grantee 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.

            

    

     

    
      	
              14.

            	
              Adjustment
      Upon Changes in
Capitalization

            

    

    Subject
to any required action by the shareholders of the Company, the number and type
of Shares covered by each outstanding Option, and the number of Shares which
have been authorized for issuance under the Plan but which have not been issued
or as to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option or otherwise, as well as
the Exercise Price, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, stock
dividend, combination, exchange of shares or reclassification of the Shares, all
only if such triggering event generally applies to all Shares.

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to the Plan.

     

    
      	
              15.

            	
              Consequences
      of a Transaction or
Dissolution

            

    

     

    
      	
               
      

            	
              15.1.

            	
              Upon
      the occurrence of any kind of Transaction or voluntarily liquidation or
      dissolution of the Company ("Dissolution"), any
      unexercised vested Options and any unvested Options existing at that time
      shall be automatically terminated.

            

    

     

    
      	
               
      

            	
              15.2.

            	
              Notwithstanding
      the aforesaid, in case of a Transaction that involves sale, transfer or
      disposal of the securities of the Company, the Grantee’s Options then
      outstanding may be assumed or substituted for an appropriate number of
      shares of each class of shares or other securities and/or assets of the
      successor company in such Transaction (or a parent or subsidiary or
      another affiliate of such successor company) (the "Successor Company") as
      were distributed to the shareholders of the Company in respect of the
      Transaction. Furthermore, if the consideration received by the
      shareholders of the Company in respect of the Transaction was not solely
      common stock (or its equivalent) of the Successor Company, then the
      Committee may stipulate that the consideration to be received upon the
      exercise of Options shall be solely common stock (or its equivalent) of
      the Successor Company. As well, the Committee may stipulate that in lieu
      of any assumption of Options for shares or other securities of the
      Successor Company, such Options will be substituted for any other type of
      asset of the Successor Company as may be fair under the circumstances,
      including, but not limited to, cash amounts. In the case of such
      assumption and/or substitution of shares, appropriate adjustments shall be
      made to the Exercise Price of the Options to reflect such action, and all
      other terms and conditions of the Options, such as the vesting periods,
      shall remain in force.

            

    

     

    
      	
               
      

            	
              15.3.

            	
              The
      Company may notify all holders of vested but unexercised Options, at least
      10 (ten) business days before the estimated day of closing of a
      Transaction or of Dissolution (as shall be determined by the Committee) of
      such expected event, and such holders shall be required to advise the
      Company within 7 (seven) days of such notice, whether they wish to
      exercise their vested Options, in accordance with the procedures set forth
      in this Plan (regardless of whether or not actual closing of the
      Transaction or the Dissolution occurs after more than such 7-day period).
      Such exercise may be contingent on actual closing of the Transaction or
      actual occurrence of the Dissolution. Upon the expiration of such 7-day
      period, no exercise of the Options shall be allowed unless specifically
      authorized by the Committee. With respect to a Transaction, the provisions
      of this Section 15.3 shall not apply in the event of an assumption or
      substitution under Section 15.2
apply.

            

    

     

    
      	
              16.

            	
              Transferability;
      Restrictions

            

    

     

    
      	
               
      

            	
              16.1.

            	
              No
      Option shall be assignable or transferable by the Grantee to whom granted
      otherwise than by will or the laws of descent and distribution, and an
      Option may be exercised during the lifetime of the Grantee only by such
      Grantee or by such Grantee's guardian or legal
      representative.  The terms of such Option shall be binding upon
      the beneficiaries, executors, administrators, heirs and successors of such
      Grantee. The provisions of this Section 16.1 applying to Options shall
      apply to any Shares subject to reverse vesting, mutatis
      mutandis.

            

    

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              16.2.

            	
              Unless
      otherwise determined by the Committee, until the consummation of an IPO,
      the Shares issued under the Plan shall be subject to all restrictions on
      transfer applicable to the Shares of the Company (including without
      limitation, rights of first refusal, bring along rights, no-sale, market
      stand-off and tag-along rights), as stated in the Articles and in any
      shareholders agreement applicable to all or substantially all of the
      Company's shareholders, regardless of whether or not the Grantee is party
      to such shareholders agreement.

            

    

     

    
      	
               
      

            	
              16.3.

            	
              Anything
      herein to the contrary notwithstanding, if, prior to the closing of an
      IPO, all or substantially all of the shares of the Company are to be sold,
      or upon a Transaction, all or substantially all of the shares of the
      Company are to be exchanged for securities of another company, then
      Grantee shall be obliged to sell or exchange, as the case may be, all
      Shares such Grantee was issued or purchased under the Plan, in accordance
      with the instructions then issued by the Board, whose determination shall
      be final.

            

    

     

    
      	
               
      

            	
              16.4.

            	
              Grantee
      acknowledges that in the event that Company’s shares shall be registered
      for trading on any public market, Grantee’s right to sell the Shares may
      be subject to certain limitations (including a lock-up period), as will be
      required by the Company or its underwriters; and Grantee unconditionally
      agrees and accepts any such
limitations.

            

    

     

    
      	
               
      

            	
              16.5.

            	
              By
      exercising an Option and/or by being issued a Share hereunder, Grantee
      agrees not to sell, transfer or otherwise dispose any of the Shares so
      purchased by him except in compliance with the United States Securities
      Act of 1933, as amended, and the rules and regulations thereunder or any
      other applicable law, and Grantee further agrees that all certificates
      evidencing any of such shares shall be appropriately legended to reflect
      such restriction. Nothing herein shall be deemed to require the Company to
      register the Shares under the securities laws of any jurisdiction. The
      Company shall not register any transfer of Shares not made in accordance
      with the provisions of the Plan, the Company's Articles of Association and
      any applicable law.

            

    

     

    
      	
              17.

            	
              Shareholders
      Rights

            

    

     

    
      	
               
      

            	
              17.1.

            	
              The
      Grantee shall have no rights of a shareholder with respect to the Shares
      subject to the Plan until the Grantee shall have exercised the Option (if
      applicable), paid the Exercise Price thereof (if applicable) and become
      the record holder of the Shares.

            

    

     

    
      	
               
      

            	
              17.2.

            	
              With
      respect to all exercised Options or Shares issued under the Plan, the
      Grantee shall be entitled to receive dividends in accordance with the
      number 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.

            

    

     

    
      	
              18.

            	
              Term
      and Amendment of the Plan

            

    

     

    
      	
               
      

            	
              18.1.

            	
              The
      Plan shall be effective as of the day it was adopted by the Board, and
      shall expire on such date that is ten (10) years following the Board
      adoption of the Plan.

            

    

     

    
      	
               
      

            	
              18.2.

            	
              Subject
      to applicable laws, the Board may, at any time and from time to time, but
      when applicable, after consultation with the Trustee, terminate or amend
      the Plan in any respect. In no event, unless allowed under this Plan, may
      any action of the Company alter or impair the rights of a Grantee, without
      his consent, under any Security previously granted to him. Termination of
      the Plan shall not affect the Committee’s ability to exercise the powers
      granted to it hereunder with respect to Securities granted under the Plan
      prior to the date of such
termination.

            

    

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

     

    
      	
              19.

            	
              Tax
      Consequences

            

    

     

    
      	
               
      

            	
              19.1.

            	
              All
      tax consequences and/or obligations regarding other compulsory payments
      arising from the issuance of Shares, the grant or exercise of any Option,
      from the payment for, or the subsequent disposition of, Shares covered
      thereby or from any other event or act (of the Company, its Affiliates,
      the Trustee or the Grantee) hereunder, shall be borne solely by the
      Grantee, and the Grantee shall indemnify the Company and/or its Affiliates
      and/or the Trustee, as applicable, and hold them harmless against and from
      any and all liability for any such tax (and compulsory payment, if any) or
      interest or penalty thereon, including without limitation, in respect of
      Approved 102 Securities, liabilities relating to the necessity to
      withhold, or to have withheld, any such tax (and compulsory payment, if
      any) from any payment made to the
Grantee.

            

    

     

    
      	
               
      

            	
              19.2.

            	
              The
      Company and/or, when applicable, the Trustee, shall not be required to
      release any Share certificate to a Grantee until all required payments
      have been fully made.

            

    

     

    
      	
              20.

            	
              Miscellaneous

            

    

     

    
      	
               
      

            	
              20.1.

            	
              Continuance of
      Employment or Hired Services: Neither the Plan nor the grant of a
      Security hereunder shall impose any obligation on the Company or any
      Affiliate thereof to continue the employment or service of any Grantee,
      and nothing in the Plan or in any Security granted pursuant hereto shall
      confer upon any Grantee 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 to terminate such employment or service at any
      time.

            

    

     

    
      	
               
      

            	
              20.2.

            	
              Lock up: The
      Grantee will be subject to a lock-up period of: (i) not less than one
      hundred and eighty (180) days beginning on the effective date of the
      registration statement pursuant to which an IPO was effected, or any
      longer period of time which may be required by the underwriters of such
      IPO, or as shall be binding on all other shareholders of the Company; and
      (ii) up to ninety (90) days beginning on the effective date of any
      subsequent underwritten registration of the Company’s securities (except
      to the extent that the relevant shares of the Grantee are part of such
      underwritten registration), or any longer period of time which may be
      required by the underwriters of such subsequent underwritten registration,
      or as shall be binding on all other shareholders of the
      Company.

            

    

     

    
      	
               
      

            	
              20.3.

            	
              Governing Law and
      Jurisdiction: The Plan and all instruments issued hereunder or in
      connection herewith, shall be governed by, and interpreted in accordance
      with, the laws of the State of Israel. The competent courts in Tel Aviv
      shall have sole and exclusive jurisdiction over any matters pertaining to
      the Plan.

            

    

     

    
      	
               
      

            	
              20.4.

            	
              Multiple
      Agreements: The terms of each Security may differ from other
      Securities granted under the Plan at the same time, or at any other time.
      The Committee may also grant more than one Security to a given Grantee
      during the term of the Plan, either in addition to, or in substitution
      for, one or more Securities previously granted to that Grantee. The grant
      of multiple Securities may be evidenced by a single Incentive Agreement or
      multiple Incentive Agreements, as determined by the
    Committee.

            

    

     

    
      	
               
      

            	
              20.5.

            	
              Non-Exclusivity of the
      Plan: The adoption of the Plan by the Board shall not be construed
      as amending, modifying or rescinding any previously approved incentive
      arrangement 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 stock options otherwise
      than under the Plan, and such arrangements may be either applicable
      generally or only in specific
cases.

            

    

     

    ******

    
      
         

      

      
        - 11
-Unassociated Document

    EXHIBIT
10.19

    TRANSLATION
FROM HEBREW

    

    Unprotected Lease
Agreement

    

    Made
and executed in Jerusalem on the 10th day of
July, 2005

    

    Between

    

    Kapps-Pharma
Ltd.

    Of 24
Raul Wallenberg Street, Tel Aviv

    

    (Hereinafter:
“the
Lessor”)

    

    Of the first
part

    

    And

    

    Bioline
Innovations Jerusalem, Limited Partnership

    Partnership
No. 55-021885-3

    Of 19
Hartum St., Har Hotzvim, Jerusalem

    

    (Hereinafter:
“the
Lessee”)

    

    Of the second
part

     

    
      	
              WHEREAS

            	
              The
      Lessor declares that it is entitled to be registered as the owner of lease
      rights in the land known as bloc 30243, parcel 62, lot 5 according to
      Urban Building Plan / Jerusalem / 2787, which constitute a lot with an
      area of 7,863 square meters located in the Har Hotzvim industrial area of
      Jerusalem (hereinafter: “the Lot”), whereon is constructed “the building”
      as defined herein below:

            

    

    

    
      	
              WHEREAS

            	
              The
      Lessor declares that there is no preclusion on his part pursuant to any
      law and/or agreement for it to enter into this agreement and perform all
      the undertakings thereof pursuant thereto and the signature thereof of
      this agreement and the performance of the undertakings thereof pursuant
      thereto fail to constitute any breach of any undertaking whatsoever
      vis-à-vis any third parties;

            

    

    

    
      	
              WHEREAS

            	
              The
      Lessee would like to rent from the Lessor and the Lessor would like to
      rent to the Lessee the parts of “the building” as defined herein below,
      described and defined herein below as the “rented premises,” all in
      accordance with and subject to the provisions of this
      agreement;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Accordingly,
the parties have agreed, declared and stipulated the
following:

    

    1.           The
Preamble to this agreement constitutes a binding and integral part
thereof.

    

    2.           Definitions

    

    In this
agreement, the terms specified herein below shall have the meaning that appears
alongside them:

    

    “The Agreement” – This
agreement including all appendices thereto

    

    “The Building” – The 9-story
building for light industry and offices and 2 basement parking lots that exists
on the lot

    

    “The Rented Premises” – An area
of 1,419 square meters (gross), all as delineated and marked in red on the
sketch attached hereto as Appendix A to this agreement and the provisions as
specified in section 7 herein below.

    It is
hereby clarified that the area, as aforesaid, is divided as
follows:

    

    751
square meters (gross) in the new wing of the building (hereinafter: “the New
Wing Area”)

    

    623
square meters (gross) in the old wing of the building (hereinafter: “the Old
Wing Area”)

    

    31 square
meters (gross) in the old wing of the building, wherein the generator, the
bellows and chiller shall be placed, as specified further on in the agreement
(hereinafter: “the Machinery Area”)

    

    14 square
meters (gross) – a gallery in the new wing, wherein the Lessee may place an
additional bellows (hereinafter: “the Gallery Area”)

    

    For the
avoidance of doubt, it is hereby clarified that for all intents and purposes the
rented premises shall be deemed, pursuant to this agreement, as the gross area
of the rented premises, i.e., 1,419 square meters, and this area shall be final
and not given to appeal even if by way of any measurement it becomes clear that
it differs from the particulars above.

    

    “Gross Area” in this agreement:
the net area with the addition of 15% in respect of the area of walls, hallways
and public areas.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Project Manager” – Mr. Avi
Kirschenberg or anyone to be authorized by the Lessor in writing by way of
notice to be delivered to the Lessee

    

    “Index” – The Consumer Price
Index (including fruits and vegetables) that is publicized by the Central Bureau
of Statistics

    

    “Basic Index” – The known index
on the date of signature of this agreement, i.e., the index for the month of
May, publicized on the 15th of
June, 2005, which stood at ______ points

    

    “Interest for Delay” – The
total interest for delay at the highest customary rate during the period of
delay pertinent to the matter at the Israel Discount Bank Ltd. in respect of
unauthorized overdrafts in current loan accounts. Written authorization of one
of the managers of a bank branch with respect to the rate of interest as
aforesaid shall be proof positive for the interest rate

    

    3.           Non-application
of the Tenancy Protection Law

    

    
      	
               
      

            	
              a.

            	
              It
      is hereby explicitly declared that the rented premises are situated in a
      building, the construction whereof shall be completed following the date
      of August 20, 1968 and this rental has been made with the explicit
      condition that the Tenancy Protection (Consolidated Version) Law 5732-1972
      as well as the other tenancy protection laws, including the regulations
      and orders thereof (hereinafter: “the Tenancy Protection Law”) and any law
      that grants the Lessee the status of a protected tenant fail to apply to
      the rental.

            

    

    

    
      	
               
      

            	
              b.

            	
              The
      Lessee declares that it has not paid and shall not pay the Lessor any key
      money or other proceeds for the rental, which do not comprise rent and the
      Lessee or anyone on behalf thereof shall not be a protected tenant in the
      rented premises according to law.

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      Lessee declares that all investments that it makes in the rented premises,
      including equipment and devices, shall be made solely for its needs and it
      shall be precluded from contending that such investments comprise any key
      money or payment pursuant to section 82 of the Tenancy Protection
      (Consolidated Version) Law 5732-1972 or any payment that grants it any
      rights whatsoever in the rented premises apart from the contents of this
      agreement. It shall also be precluded from demanding from the Lessor
      participation or a refund, in full or in part, in respect of the aforesaid
      investments.

            

    

    

    
      	
               
      

            	
              d.

            	
              The
      Lessee is aware that the rented premises are rented to the Lessee, inter alia, based on
      the declarations thereof above and it shall be precluded from raising any
      claims or contentions whatsoever in connection with being a protected
      tenant or that it has further rights in the rented premises apart from
      those granted thereto explicitly herein in this
  agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    4.           The
Tenancy

    

    
      	
               
      

            	
              a.

            	
              The
      Lessor hereby rents to the Lessee and the Lessee hereby rents from the
      Lessor the rented premises in a tenancy that is unprotected by the Tenancy
      Protection Law for the sole purposes of the tenancy for a period and under
      the conditions as specified herein in this agreement above and
      below.

            

    

    

    
      	
               
      

            	
              b.

            	
              The
      Lessee declares that it has seen the rented premises and/or the plans
      thereof and/or the blueprint of the rented premises and examined the legal
      state thereof and subject to the accuracy of the declarations and
      representations of the Lessor, it has found the premises to be suitable
      for the purposes thereof and the Lessee is hereby precluded from
      contending any contention in connection with the suitability of the rented
      premises for its needs and/or any other contention, save for a contention
      with respect to a concealed fault and/or flaw and/or
    damage.

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      Lessee shall act to the best of its ability and subject to the plans
      thereof to obtain authorization of an authorized concern as defined in the
      Encouragement of Capital Investments Law. The Lessee shall present this
      authorization to the Lessor forthwith upon receiving it and from this date
      an authorized enterprise shall be run throughout the period of the tenancy
      (including the extension periods). It is clarified that in the event that
      the Lessee loses the status of an authorized concern, at any time and for
      any reason, the Lessee shall inform the Lessor thereof forthwith and in
      writing.

            

    

    

    5.           Adapting
the Rented Premises

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee has prepared and shall prepare, at its expense, by way of planners
      to be authorized by the Lessor in advance and in writing, all plans for
      the performance of the initial adaptation works in the premises, as they
      are defined herein below, including interior plans, statements of
      quantities, specifications, and the plans of the rented premises and of
      all the systems in the premises, including air-conditioning, electricity,
      plumbing, fire-extinguishing, smoke detectors, and security systems (all
      the aforesaid together hereinafter: “the Plans”) and shall submit such for
      authorization of the Lessor. The parties agree that up to the date of
      signature of the agreement, solely the plans for the performance of the
      initial adaptation works in the area of the new wing of the rented
      premises have been authorized and these are attached hereto as Appendix
      B 1 to this agreement. The Lessee has submitted to the Lessor
      solely initial interior division plans for the performance of the
      adaptation works in the area of the old wing in the rented premises, which
      have been authorized as such by the Lessor. Subsequently, the parties
      hereby agree that the Lessee shall transmit for the Lessor’s authorization
      the plans (as defined above), including the specific plans for the
      performance of the initial adaptation works in the area of the old wing,
      including plans of the systems in accordance with the schedules attached
      hereto as Appendix B to this agreement. With respect to these plans, the
      Lessee shall perform any amendment and/or alteration, as required by the
      Lessor, until it receives authorization of the Lessor for the plans and
      all this at the earliest possible time, and, in any case, in accordance
      with the schedules attached hereto to this agreement, as aforesaid. From
      the moment of final authorization of the plans for the performance of the
      initial adaptation works in the area of the old wing by the Lessor, as
      aforesaid, these shall be attached to the agreement as Appendix
      B2. The Lessee hereby undertakes that the plans shall be adapted by
      the various consultants on behalf of the Lessee and Lessor, insofar as
      required by the Lessor, including a safety consultant on behalf of the
      Lessor, and the Lessee shall act, at its expense, insofar as required, to
      carry out all the aforesaid.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              b.

            	
              The
      Lessee shall receive possession of the rented premises, in its present
      state, “as is” on the date of delivery as defined in section 6 herein
      below.

            

    

    

    The
Lessee shall perform, at its sole liability and expense, all the adaptation
works in the rented premises, all subject to the provisions of this agreement,
including section 14 of this agreement and including the undertaking of the
Lessor to participate in the costs of performance of the initial permanent
adaptation works, as defined herein below, in accordance with the provisions of
this agreement.

    

    Without
derogating from the other provisions of this agreement, the parties hereby agree
that the adaptation works that the Lessee shall perform in the rented premises
in accordance with the final authorized plans, as aforesaid and as specified in
section 5(a) above, shall be performed thereby solely from the date of delivery
of the rented premises to the Lessee until the date February 1, 2006
(hereinafter: “the Initial Adaptation Works”). The initial adaptation works
shall be performed solely by registered contractors, provided that the Lessor
shall be partner to the procedure of choosing the performing contractors and the
process of conducting negotiations therewith. Any conclusion with respect to
selecting any performing contractor and the cost of the works to be performed
shall be subject to the prior authorization of the Lessor. The Lessor shall
refuse to give its agreement, as aforesaid, solely on reasonable grounds. In
addition, the Lessee hereby agrees that the Lessor shall propose to the Lessee,
if it chooses to do so, names of contractors to obtain price offers from them
and the Lessee shall contact the contractors, as aforesaid, with a request to
obtain a price proposal for the performance of the initial adaptation works or
any part thereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In the
event that the Lessor fails to give the Lessee its decision in connection with
the price proposal of the contractor that was authorized by the Lessor in
advance, as aforesaid, within 10 days of the date the Lessee submits the price
proposal in writing to the Lessor, the matter shall be deemed as implied consent
of the Lessor, and the Lessee may decide, according to its sole discretion,
whether or not the contractor’s proposal is acceptable.

    

    The
parties hereby clarify and agree that the Lessor may determine on reasonable
grounds in connection with the initial adaptation works that the price proposal
and/or the contractor are unacceptable thereto and the Lessee shall act in
accordance therewith.

    

    In
addition, the Lessee hereby undertakes to cooperate and instruct each contractor
and/or anyone on behalf thereof to cooperate with the Lessor and/or anyone on
behalf thereof concerning all that is connected to the performance of the
initial adaptation works, including in connection with the manner of the
performance thereof in the building and in general the fulfillment of the
provisions and directions for safety, etc.

    

    The
parties hereby agree that on behalf of the Lessee Mr. Yoav Avichai shall
supervise the performance of the initial adaptation works, pursuant to the
provisions of this agreement.

    

    The
Lessor shall finance part of the cost of the initial permanent adaptation works,
as to be defined herein below, solely in the amount of $250 per square meter of
the rented premises with the addition of Value Added Tax (hereinafter: “the
Lessor’s Contribution”) and all subject to the performance thereof pursuant to
the provisions of this agreement, in full and on time and in accordance with the
provisions of this section.

    

    For the
avoidance of doubt, it is hereby clarified that the Lessor’s contribution to the
cost of the initial adaptation works, as specified above, shall apply solely to
the initial adaptation works in the rented premises, which shall remain in the
rented premises on the date of evacuation thereof by the Lessee and which
constitute an alteration and/or addition to the infrastructures, to the division
or systems of the rented premises, including the form thereof, the nature
thereof, the style thereof, the quality thereof, the kind thereof, the size
thereof or the quantity thereof and, inter alia, the Lessor’s
contribution, as aforesaid, shall not apply to the purchase of movable
equipment, such as furniture, computers, etc. (above and herein below: “the
Initial Permanent Adaptation Works”).

    

    The
parties agree that following the parties’ and various contractors’ conclusion
regarding the estimated comprehensive price of the initial permanent adaptation
works, the parties shall prepare a revaluation of the amount of the Lessor’s
contribution, as defined and specified above, in relation to the total cost of
the initial permanent adaptation works (i.e., a revaluation according whereto
the Lessor’s contribution reaches a certain percentage [revaluated] of the sum
total of revaluated costs of the initial permanent adaptation works)
(hereinafter: “the Proportion of the Lessor’s Contribution”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
Lessor shall pay the Lessee the sum of the Lessor’s contribution in respect of
the performance of the initial permanent adaptation works, or any part thereof,
according to the amount of the Lessor’s contribution in connection with each and
every invoice within 21 days of any date whereon the Lessee issues to the Lessor
demands to pay in connection with the performance of such works, against the
presentation of the contractors’ invoices in connection with the same works,
provided that prior to the performance of the works subject of any invoice, as
aforesaid, the Lessee shall receive the authorization of the Lessor in advance
and in writing for the price proposal of the contractor selected for the
performance of the same works and the selection of the contractor for the
performance thereof, and, likewise, the Lessor has authorized that this concerns
the initial permanent adaptation works, subject to the fact that the Lessor has
authorized the same invoices following the performance of the works, as
aforesaid, and the works subject of the invoices have been performed subject to
the provisions of this agreement. (For the avoidance of doubt and solely for
purposes of illustration, it is hereby clarified that if following the aforesaid
revaluation, the parties agree that the Lessor’s contribution to the costs of
the initial permanent adaptation works, as aforesaid, amount to (for example)
the sum of 35% of the revaluated value thereof (i.e., the amount of the Lessor’s
contribution in this case), the Lessor shall pay the Lessee, in accordance with
the aforesaid, the value of 35% of the entire invoice to be presented thereto,
as aforesaid, in any event up to an upper comprehensive and final limit of $250
per square meter of the rented premises).

    

    The
parties hereby further clarify and agree that insofar as the cost of the initial
permanent adaptation works shall exceed the sum of the Lessor’s contribution, as
defined above, such works shall be performed at the expense of the Lessee, as
specified above, and the addition of the surplus price shall be paid by the
Lessee. And, in any event where the cost of the initial permanent adaptation
works shall be less than the amount of the Lessor’s contribution, as defined
above, the Lessee shall not be entitled to any compensation and/or payment
and/or refund of the difference between the actual cost of the initial permanent
adaptation works and the amount of the Lessor’s contribution, as specified
above, and/or to financing for the works and /or any equipment whatsoever, in
the amount of the aforesaid difference, at any time
whatsoever.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.           Date of
Delivery

    

    
      	
               
      

            	
              a.

            	
              If
      the Lessee has conveyed to the Lessor the securities as specified in
      section 22 herein below, and all remaining payments in accordance with
      section 11 (c), the Lessor shall deliver to the Lessee possession of the
      rented premises at the time of signature of the agreement by the Lessee
      and the submission thereof signed, with all appendices agreed thereto, to
      the Lessor (hereinafter: “the Date of
  Delivery”).

            

    

    

    
      	
               
      

            	
              b.

            	
              Without
      derogating from the generality of the aforesaid, a delay of up to 14 days
      in the date of delivery as a result of any delay whatsoever, for any
      reason whatsoever, shall not be deemed a breach of the agreement and shall
      not entitle the Lessee to any relief whatsoever. It is clarified that
      termination of the tenancy period shall not be deferred in accordance with
      a delay in delivery.

            

    

    

    
      	
               
      

            	
              c.

            	
              Without
      derogating from the aforesaid in sub-section b above, the parties hereby
      agree that the date of delivery and/or date of completion of the initial
      adaptation works shall be deferred in cases of force majeure, strikes or
      lockdowns in the construction industry, situations of war or mobilization
      of reserves, an unanticipated shortage in materials or laborers, the
      failure to supply electricity and/or if the rented premises fail to be
      connected to the electricity grid, provided that liability for such is not
      exclusively the Lessor’s or any other reason or cause not under the
      control of or within the reasonable anticipation of the Lessor. The
      project manager shall determine, according to his discretion, the duration
      of time wherein the circumstances as specified above occurred and the date
      of delivery shall be deferred accordingly. A delay as aforesaid shall not
      be deemed a breach of the agreement and shall not entitle the Lessee to
      any relief whatsoever. Termination of the tenancy period shall be deferred
      in accordance with a delay in the delivery of possession
      thereof.

            

    

    

    In the
event that completion of the initial adaptation works by the Lessee is delayed
due to force majeure and this precludes the entry of the Lessee into the rented
premises and its reasonable use thereof for the objective of the tenancy,
pursuant to the agreement, all dates pursuant to the agreement shall be deferred
for the period wherein the force majeure occurred, provided that the Lessee
acted insofar as possible and took all possible means to complete the works as
soon as possible and curtail the aforesaid delay.

    

    
      	
               
      

            	
              d.

            	
              The
      date of delivery or deferred date of delivery in accordance with
      sub-sections b or c above, shall be called hereinafter: “the Date of
      Delivery.”

            

    

    

    
      	
               
      

            	
              e.

            	
              The
      Lessee shall be obligated to accept possession of the rented premises on
      the date of delivery and the Lessor shall perform the delivery of the
      rented premises with the participation of the Lessee’s representative, if
      he is present, subsequent to receiving notice of at least two business
      days in advance.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    E1.   The
parties hereby agree and clarify that a principal and fundamental condition of
this agreement is that the Lessee shall evacuate an area of 430 square meters on
the first floor of the building, which the Lessee rented from the Lessor
pursuant to the tenancy agreement the parties signed on September 14, 2003
(respectively hereinafter: “the Returned Area” and “the First Tenancy
Agreement”), on whichever date is the earlier of : (1) ten days from the date of
the transfer of the business thereof and/or any part of the business thereof
(including the move of any furniture or equipment whatsoever) into the rented
premises; or (2) September 2, 2005. It is hereby agreed that at the Lessee’s
request of the Lessor, in writing, at least a month prior to this date, the
Lessee may receive an extension of up to 10 days of this date, i.e., until
October 2, 2005 at the latest (the date of evacuation as aforesaid shall be
called hereinafter: “the Date of Evacuation of the Returned Area”). The Lessee
hereby undertakes to evacuate the returned area, as aforesaid, in accordance
with all provisions of the first tenancy agreement, as it is clean and freshly
painted with Tambour Supercryl paint (in the same shade as it received the
returned area or any other shade whereto the Lessor or the project manager
agrees in writing).

    

    For the
avoidance of doubt, the parties hereby agree that as long as the Lessee fails to
evacuate the returned area in accordance with the provisions of this agreement
and the first tenancy agreement, the first tenancy agreement shall continue to
apply to the Lessee for all intents and purposes. Likewise, the parties hereby
clarify and agree that the failure to evacuate the returned area beyond
5

    business
days following the date of evacuation of the returned area, as defined above,
shall constitute a fundamental breach of the first tenancy agreement in respect
of the failure to evacuate on time, in respect whereof the Lessor may utilize
any relief pursuant to the first tenancy agreement and pursuant to any
law.

    

    
      	
              f.

            	
              For
      the avoidance of doubt it is clarified that the Lessor may also, following
      the completion of the building, perform building works and other works in
      parts of the building, which are not the rented premises, including, but
      not solely, development works, provided that such works fail to preclude
      and/or damage the reasonable use of the Lessee of the rented premises for
      the tenancy objective and fail to infringe on the Lessee’s rights pursuant
      to this agreement.

            

    

    

    
      	
               
      

            	
              Likewise,
      the addition of stories and/or parts of stories and/or the enlargement of
      the areas permitted for use in the building and/or the alteration of the
      permitted designation of areas within the building shall not be deemed a
      beach of the Lessor’s undertaking, as aforesaid, as long as this fails to
      preclude and/or harm the Lessee’s reasonable use of the rented premises
      for the objective of the tenancy or fail to infringe the rights thereof,
      pursuant to this agreement.

            

    

    

    
      	
               
      

            	
              The
      Lessor may perform alterations in the building plans and/or the rented
      premises, if it is required to do so by any competent authority, provided
      that the aforesaid alterations fail to preclude and/or damage the Lessee’s
      reasonable use of the rented premises for the objective of the tenancy
      and/or fail to infringe the Lessee’s rights pursuant to this
      agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              f.

            	
              The
      project manager shall determine, at his discretion, as an expert and not
      as an arbitrator, whether the works and/or alterations and/or additions,
      as specified in sub-section 6 (f) above disturb the Lessee’s reasonable
      use of the rented premises for the objective of the tenancy. In addition,
      the project manager shall determine, at his discretion, as an expert and
      not as an arbitrator, whether the initial adaptation works were performed
      in accordance with the plans in Appendices B1 and B2 to this agreement and
      whether divergences from the plans or specifications or alterations
      therein constitute substantial divergences or minor divergences and/or
      whether such may disrupt the Lessee’s reasonable use of the rented
      premises. The parties agree that in the event that the project director’s
      decision, as aforesaid, fails to be agreeable to either of the parties to
      this agreement, the parties shall jointly request the appointment of an
      arbitrator whereon they agree to decide such questions. The arbitrator
      shall be selected in agreement and shall be a professional in the field of
      engineering and/or construction. In the absence of agreement regarding the
      appointment of an arbitrator, the arbitrator shall be appointed by the
      chairman of the Contractors and Builders Association in Israel. The
      parties agree that in the event that either of the parties requests
      approaching an arbitrator, as aforesaid, the matter shall not constitute
      grounds for the non-performance and/or delay in performance of any of the
      provisions of the agreement, without the matter constituting the admission
      of any contention whatsoever and/or derogating from any contention and/or
      relief pursuant to any law and
agreement.

            

    

    

    7.           Parking

    

    A sketch
of the building’s parking spaces is attached hereto as Appendix
D to this agreement (hereinafter: “the Sketch of Parking Spaces”).
Eighteen ordinary parking spaces marked in red on the sketch of parking spaces
shall be made available to the Lessee for the period of the tenancy for the sole
use thereof, commencing at the beginning of the tenancy period, pursuant to this
agreement.

    

    The
parties hereby agree that by way of giving written notice of 30 days in advance
to the Lessor, the Lessee shall have the option to add and rent up to 12
additional parking spaces in the building to be allocated and marked by the
Lessor (hereinafter: “the Additional Parking Spaces”), part of which shall be
ordinary spaces and part shall be double spaces according to the relation and
arrangement herein below: the first 8 additional parking spaces shall be double
parking spaces (i.e., 4 double parking spaces) and the 4 remaining spaces to be
rented to the Lessee thereafter shall be ordinary parking spaces. Rental of each
of the additional parking spaces shall commence on the date according to the
Lessee’s provision of notice to the Lessor, as aforesaid, and shall extend until
the expiration of the tenancy period.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Likewise,
the parties hereby agree that, subject to the provision of 30 days’ notice in
advance and in writing to the Lessor, the Lessee shall have the right to reduce
the number of additional parking spaces that it shall rent from the Lessor, as
aforesaid, up to the rental of 18 ordinary parking spaces specified in the first
sub-section of this section 7 herein, at the least. The type of additional
parking spaces to be reduced, as aforesaid in this sub-section above, shall be
in accordance with the type of additional parking spaces that the Lessee rented
from the Lessor, in the reverse order to the order aforesaid, so that each
additional parking space to be removed shall be the last additional parking
space (ordinary or double) that the Lessee rented, in accordance with the
contents of this section above.

    

    In return
for the use of the parking spaces, the Lessee shall pay the Lessor rent as
specified in section 10 herein below.

    

    In any
event of the termination of the tenancy or the lawful revocation thereof, all as
the case may be, the permission to use the parking spaces as aforesaid shall
automatically be revoked as well. The provisions of this agreement concerning
all that pertains to the rented premises shall apply to the parking spaces as
well.

    

    8.           Objective
of the Tenancy

    

    
      	
               
      

            	
              a.

            	
              Without
      derogating from the aforesaid, the objective of the tenancy is to conduct
      a business that manages and develops medical projects, in general, and
      medications, in particular, including a laboratory for research and
      development for the aforesaid
purpose.

            

    

    

    It is
clarified that the Lessee has the responsibility to obtain all licenses required
for the management of its business in the rented premises, if required, and the
failure to obtain such shall not constitute grounds for the curtailment or the
delay of the tenancy or reduction of the rent, even in the event that the
business is closed as a result of the absence of a license as
aforesaid.

    

    
      	
               
      

            	
              b.

            	
              In
      the event that the Lessee fails to obtain a permit to conduct its business
      and/or a business license for any reason whatsoever, the Lessee shall not
      have a claim nor shall a claim arise on any grounds and of any kind
      against the Lessor and by the signature of this agreement the Lessee
      waives a claim in advance, including but not solely in respect of the
      investments thereof in the rented
premises.

            

    

    

    Nothing
in the aforesaid shall be deemed as permission by the Lessor for the Lessee to
use the rented premises and/or to manage a business therein without a permit
and/or by way of a divergence therefrom.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              c.

            	
              For
      the avoidance of doubt and without derogating from the aforesaid, the
      parties hereby agree that liability in respect of managing the Lessee’s
      business not in accordance with a lawful permit shall apply solely to the
      Lessee and it undertakes to indemnify the Lessor in respect of any claim
      and/or obligation placed thereon for managing a business in the rented
      premises without a lawful permit and/or due to the failure to obtain the
      permits within 7 days of receiving the first demand of the Lessor,
      provided that in the event of a claim – the Lessor gave the Lessee written
      notice of the filing of the claim a reasonable amount of time in advance
      and enabled it to offer a defense against the claim, and in the event of
      an obligation – against the presentation of documentary proof and/or
      lawful tax invoices with respect to the performance of actual payment by
      the Lessor.

            

    

    

    9.           Period of
the Tenancy

    

    Subject
to the fulfillment of all undertakings of the Lessee pursuant to the agreement,
the Lessor hereby rents to the Lessee and the Lessee hereby rents from the
Lessor the rented premises in an unprotected tenancy from the date of delivery
of the rented premises until the date, December 15, 2008 (hereinafter: “the
Period of the Tenancy”).

    

    Notwithstanding
the aforesaid, the parties hereby agree and clarify that in any case where on
the date of delivery the rented premises are not delivered to the Lessee as a
result of an act and/or omission of the Lessee and/or anyone on behalf thereof
and/or as a result of other reasons not under the Lessor’s liability, save for
force majeure, then the rented premises shall be deemed as having been delivered
to the Lessee on the date of delivery and commencing on this date (the date of
delivery), the Lessee shall be obligated with all its undertakings pursuant to
this agreement, including payment of rent, maintenance fees, municipal rates and
any other payment in relation to the entire rented premises.

    

    9A.        Right of First Refusal for
Renting Additional Space

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee is hereby granted the right of first refusal in connection with
      renting two areas on the 6th
      floor of the building, both outlined and marked in blue on the sketch
      attached hereto as Appendix A to this agreement, each of them in full
      (hereinafter: “the Right of Refusal” and “the Additional Areas”), solely
      during the first 18 months following the date of delivery of the rented
      premises as defined above (hereinafter: “the Period of the Right of First
      Refusal”), as follows:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
Lessor shall deliver notice to the Lessee of its intention to rent either of the
additional areas (above and below: “the Additional Area”) to a tenant who is
interested therein (hereinafter: “the Potential Tenant”) and the Lessee shall be
given 7 days from the date of delivery of the Lessor’s notice thereto to
undertake in writing vis-à-vis the Lessor to rent the relevant additional area
in its entirety, in accordance with the conditions offered by the potential
tenant and subject to the remaining provisions of this agreement, mutatis mutandi. Insofar as
the Lessee requests to measure the additional areas, the Lessor shall perform
the measurement and the Lessee shall bear the expense of the measurement. If the
Lessee undertakes, as aforesaid, to rent the pertinent additional space, as
aforesaid, then all the provisions of section 9A (b) herein below shall apply in
relation to the exercise of the right of first refusal and in accordance all the
provisions of this agreement shall apply in relation to the rental of the
additional area.

    

    If the
Lessee gives notice that it is not interested in renting the additional space or
fails to deliver its undertaking in writing for the rental of the Additional
Area within 7 days of the date the Lessor’s notice was delivered thereto as
aforesaid, the Lessor may rent the Additional Area to the potential tenant. The
parties agree that in the event that an agreement fails to be signed between the
potential tenant and the Lessor for the rental of the Additional Area as
aforesaid and the Lessor is interested in renting the Additional Area to another
potential tenant, then the Lessor shall be obligated to act again in accordance
with the procedure described herein in this section above prior to the rental of
the additional space.

    

    
      	
               
      

            	
              b.

            	
              In
      the event that the Lessee exercises the right of first refusal for the
      rental of either of the Additional Areas, the provisions of this agreement
      shall apply in relation to the Additional Area that it rents as well,
      mutatis mutandi,
      and in accordance with the particulars specified herein
    below:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      Lessee shall accept possession of the Additional Area, in its present
      state at the time of delivery thereof, “as is,” subsequent to the Lessor
      providing final authorization for the plans the Lessee submits to the
      Lessor, in accordance with the contents of section 5 above and on the date
      of delivery as defined in section 6 above in connection with the rented
      premises, all this in connection with the pertinent Additional Area, mutatis mutandi, and
      subject to the Lessee’s maintaining the
  schedules.

            

    

    

    The
Lessee shall perform at its sole liability and at its expense all the adaptation
works in the Additional Area, and all subject to the provisions of this
agreement, including section 14 of this agreement and subject to the contents
stated herein below, including the Lessor’s undertaking to participate in the
costs of the performance of the initial permanent adaptation works in the
Additional Area, at a cost per square meter and in the manner of participation
in accordance with the provisions of this agreement, mutatis mutandi.
Notwithstanding the aforesaid, the parties hereby agree explicitly that in the
event that the Lessee exercises the right of first refusal to rent either of the
Additional Areas, pursuant to this section 9 herein, in the last six months of
the period of the right of first refusal, as defined above, the Lessor’s
contribution shall amount to the cost of the performance of the initial
permanent adaptation works in the Additional Area, which the Lessee shall rent,
as aforesaid, i.e., solely $200 per square meter of the Additional Area, with
the addition of VAT, and not the amount stated in section 5 (b)
above.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    For the
avoidance of doubt, all provisions of this agreement in relation to the planning
and performance of the initial adaptation works in the rented premises and in
relation to the delivery of possession of the rented premises shall apply mutatis mutandi as well in
relation to each of the Additional Areas, if and insofar as such are rented to
the Lessee, as aforesaid in section 9A herein.

    

    
      	
               
      

            	
              (2)

            	
              The
      period of tenancy of the Additional Areas, if and insofar as such are
      rented to the Lessee, as aforesaid, shall conclude on the date that the
      rental period of the rented premises
expires.

            

    

    

    
      	
               
      

            	
              (3)

            	
              If
      the Lessee exercises the right of refusal for rental of either of the
      Additional Areas, as aforesaid, the pertinent Additional Area shall be
      added to the area of the rented premises as defined herein in this
      agreement above, and all provisions of this agreement shall apply thereto,
      mutatis
      mutandi.

            

    

    

    10.         Rent

    

    
      	
               
      

            	
              a.

            	
              During
      the period of the tenancy, the Lessee undertakes to pay the Lessor in
      respect of the rented premises monthly rent as
  follows:

            

    

    

    $10.20 in
respect of each square meter (gross) of the New Wing Area and the Old Wing
Area

    

    $8 in
respect of each square meter (gross) of the Machinery Area and the Gallery
Area

    

    $46 U.S.
for each parking unit (whether ordinary parking spaces or parking allocated to
the Lessee within the context of double parking spaces, in which case it is
clarified that the payment for double parking spaces shall stand at
$92)

    

    (Hereinafter:
“the Rent”)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
        	
              	
                b.

              	
                (1) With
      respect to all that pertains to the New Wing Area, notwithstanding the
      aforesaid in section 10 (a) above, the Lessee receives a grace period and
      shall not be obligated to pay rent solely for rental of the New Wing Area
      from the date of delivery, as aforesaid herein in this agreement above,
      until whichever is the earlier of: (a) the date of commencement of
      operating the business of the Lessee (including any part thereof) in an
      New Wing Area or in any part thereof, including moving any equipment
      and/or furniture whatsoever into the New Wing Area, or (b) September 2,
      2005. However, it is clarified that the Lessee shall be obligated with all
      remaining payments and undertakings pursuant to this agreement, including
      municipal rates and management fees, commencing from the date of delivery
      of the New Wing Area.

              

      

    

    

    (2) With
respect to all that pertains to the Old Wing Area, notwithstanding the aforesaid
in section 10 (a) above, the Lessee receives a grace period and shall not be
obligated to pay rent solely for the rental of the Old Wing Area from the date
of delivery, as aforesaid herein in this agreement above, until whichever is the
earlier of: (a) the date of commencement of operating the business of the Lessee
(including any part thereof) in the Old Wing Area or in any part thereof,
including moving any equipment and/or furniture whatsoever into the area of the
old wing, or (b) February 1, 2006. However, it is clarified that the Lessee
shall be obligated with all remaining payments and undertakings pursuant to this
agreement, including municipal rates and management fees, commencing on the date
of delivery of the Old Wing Area.

    

    
      	
               
      

            	
              c.

            	
              Rent
      and all other payments stated in dollar amounts herein in this agreement
      shall be translated and paid in New Israeli shekels according to the known
      representative rate on the actual date of payment and, in any event, the
      value thereof in shekels shall not be less than the value thereof on the
      date fixed for the performance of each payment, pursuant to this
      agreement. Without derogating from the aforesaid herein in this section,
      in the event that between the date fixed for payment and the actual date
      of payment there is a devaluation of one or more percent in the value of
      the dollar, the Lessee shall pay the Lessor, forthwith upon the first
      demand of the Lessor, the difference in rent between the date fixed for
      payment and the date of actual
payment.

            

    

    

    11.           Payment
of the Rent

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee shall pay the Lessor the rent, as aforesaid in section 10 above in
      advance for every three months of the tenancy period, on the first day of
      each 3-month period, as aforesaid.

            

    

    

    The
parties hereby agree that in order to facilitate payment and collection of the
rent, the Lessee, up to and no later than the date of the commencement of the
tenancy period each year, may deposit with the Lessor 4 checks, each of them in
the amount of the entire rent for each of the quarters of the following rental
year in a shekel amount required pursuant to the provisions of this agreement on
the date of issuing the checks, as aforesaid, and the actual date of payment of
each one of the checks shall be the first day of each quarter of the following
tenancy year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    At the
conclusion of each quarter of the rental period as well as on the date of
termination of the tenancy period, the Lessee shall pay the Lessor the
differences in the event that such were produced as a result of a rise in the
dollar rate between the sum stated on the checks and the sum that the Lessee is
to pay the Lessor in practice, according to the dollar rate on the actual date
of payment of each of the checks, i.e., on the first day of the pertinent
quarter.

    

    
      	
               
      

            	
              b.

            	
              All
      payments that apply to the Lessee pursuant to this agreement, the Lessee
      shall pay them, as aforesaid, up to the time of 11:00 a.m. by way of a
      bank transfer and/or in any other manner that fails to be a standing
      order, according to the Lessor’s instructions. If the date of payment
      falls on a day that is not a business day, the payments shall be paid on
      the first business day following
thereafter.

            

    

    

    
      	
               
      

            	
              c.

            	
              On
      the date of signature of this agreement by the Lessee, and as a condition
      to the signature thereof, the Lessee shall pay the Lessor rent for the
      first quarter of the rental period following forthwith each of the grace
      periods, as aforesaid in section 10
(b).

            

    

    

    
      	
               
      

            	
              d.

            	
              Payment
      by way of checks, authorization of the performance of the bank transfer
      and/or any other means of payment shall not be deemed payment and solely
      the actual remittance of the checks and/or the actual transfer of the sums
      to the Lessor by the bank shall be deemed as payment of the rent. The
      parties hereby agree that non-remittance of checks not as a result of an
      act and/or omission of the Lessee shall not be deemed a breach of this
      agreement, subject to the Lessee’s correction thereof and it shall ensure
      the full remittance of the checks and/or the performance of the payment in
      another manner within 4 days of the date of the demand of the Lessor
      and/or anyone on behalf thereof. Likewise, the parties hereby agree that
      in the event that the non-payment of the checks was caused by a strike at
      the bank, the aforesaid non-payment shall not be deemed a breach of this
      agreement as long as the strike continues at all banks in Israel wherein
      the Lessee holds a bank account.

            

    

    

    
      	
               
      

            	
              e.

            	
              The
      Lessee shall pay the Lessor rent and shall make all other payments it is
      obligated to pay in accordance with this agreement for the entire period
      of the tenancy, even if for any reason not under the Lessor’s liability
      the Lessee uses solely part of the rented premises and/or solely part of
      the time, whether of its own will or not of its own
  will.

            

    

    

    
      	
               
      

            	
              f.

            	
              The
      Lessee hereby waives any contention of offset and the cause of action of
      offset, whether current and/or future, of any amount, whether limited or
      not, of the rent and/or the management fees and/or any other payment owing
      to the Lessor, pursuant to this
agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    12.         Other
Payments

    

    
      	
               
      

            	
              a.

            	
              In
      addition to the other payments specified herein in this agreement, the
      following payments shall apply to the Lessee during the tenancy
      period:

            

    

    

    
      	
               
      

            	
              (1)

            	
              All
      taxes, municipal rates, fees, charges, municipal and government, of any
      kind that apply and/or shall apply to the holder of the rented premises
      and/or imposed in respect of the very use of the rented premises,
      including, but not solely, general municipal rates, garbage removal
      expenses and other municipal taxes and/or such involved in the business
      the Lessee runs in the rented premises and/or the objective of the rental,
      including business tax, signage tax, fees and licenses for a business and
      management thereof, save for charges and taxes applying by the nature
      thereof to the owners of property such as: the charge for sewage and
      paving roads, betterment charge,
etc.

            

    

    

    
      	
               
      

            	
              (2)

            	
              All
      fees and payments relating to the consumption of electricity in the rented
      premises.

            

    

    

    The
Lessee declares that it is aware that the Lessor is the owner of the sole rights
vis-à-vis the Israel Electric Corporation Ltd. (hereinafter: “the Electric
Corporation”) with respect to all that is connected to receiving electricity in
the building.

    

    In light
of the aforesaid, the Lessor hereby undertakes to supply the rented premises
with electricity under the conditions and at a rate according to system load and
consumption times for low voltage, customary from time to time, at the Israel
Electric Corporation.

    

    The
Lessee hereby waives absolutely, finally and irrevocably the right thereof to
enter into agreement with the Electric Corporation with respect to any matter
and issue pertaining to the supply of electricity to the rented premises. It
hereby declares and undertakes that its sole partner with respect to all that
pertains to the supply of electricity to the rented premises shall be solely the
Lessor (or, at the Lessor’s request, the management company) and that it has no
claims and shall have no claims and it hereby waives finally, absolutely and
irrevocably any claims against the Electric Corporation concerning anything
related to the supply of electricity to the rented
premises.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
Lessee may not request directly of the Electric Corporation and/or any other
entity, apart from the Lessor, that it shall supply electricity and it shall not
contact the Electric Corporation with a request to install a separate
electricity meter or to make payment directly to the Electric Corporation. The
Lessee shall have no claim concerning any cause of action whatsoever against the
Electric Corporation in respect of the failure to supply electricity or
disruptions in the supply of electricity. Without derogating from the aforesaid,
if the Lessee installs electronic equipment or any electricity whatsoever, it
shall not be permitted to come forward with any protest or claim whatsoever as a
result of the cessation of the supply of electricity and/or disruption in the
supply thereof.

    

    The
Lessor may visit the rented premises at any reasonable time and, insofar as
possible following prior coordination, to inspect any electrical device and
equipment connected to the electricity grid, to test the safety thereof and the
adaptation thereof to the safety standards and customary consumption habits, as
such may be from time to time. If an electrical engineer on behalf of the Lessor
believes that alterations must be made to the electricity system within the
rented premises or that any electrical equipment whatsoever installed in the
rented premises is likely to cause damage to the supply of electricity and/or
that it comprises a safety drawback or hazard and/or it fails to meet accepted
safety standards and/or the load it is likely to impose on the electricity
system is likely to disrupt the operation thereof or cause excessive expenses,
the engineer shall demand the repair and/or replacement and/or alteration of the
system or equipment, as aforesaid, and the Lessee undertakes to take any means
necessary, at its own expense, at the earliest possible time, provided that it
installed the electrical device in the rented premises and/or it was installed
at its request. The Lessee shall be liable for any damage caused to the Lessee
and/or the Lessor and/or the rented premises and/or the equipment and building
systems as a result of the operation of the improper electrical device that it
installed and/or had installed at its request in the rented premises or that was
damaged as a result of the unreasonable use of the rented premises by the
Lessee.

    

    The
Lessor is aware and agrees that the Lessee may install a bellows in the Gallery
Area and an additional bellows, chiller and generator in the Machinery Area, all
at the liability and expense of the Lessee and subject to the provisions of
section 14 herein below. It is clarified that subject to the agreement of the
parties with respect to the conditions of maintenance and price thereof, the
Lessor shall agree to maintain the bellows, the chiller and the generator, as
aforesaid. Nonetheless, in any event, the Lessee shall bear liability for faults
in any of the equipment, as aforesaid and any damage that is caused (insofar as
such is caused) to the Lessee, the Lessor or any third party in connection
thereto and the Lessor shall not bear any liability in connection
therewith.

    

    Without
derogating from the aforesaid in any other place, the supply of electricity to
the rented premises and/or other places in the building may be halted and/or
limited in the following instances:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              -

            	
              Any
      disturbance in the electric current from the Electric Corporation reaching
      the building, for any reason

            

    

    
      	
               
      

            	
              -

            	
              In
      any event where there is risk or concern for risk to person or
      property

            

    

    
      	
               
      

            	
              -

            	
              In
      any other event where an electrical engineer on behalf of the Lessor
      instructs that the electricity supply must be
  halted.

            

    

    

    Insofar
as possible, the Lessor shall coordinate with the Lessee in advance such
anticipated suspensions and/or disruptions in the electricity supply to the
rented premises. The Lessor shall act swiftly and efficiently to renew the
electricity supply fully or partially at the earliest possible
time.

    

    The
Lessor may arrange for controls, inspections, handling and repairs of electrical
devices and all equipment in connection with the electricity system, as it deems
proper, from time to time and, for this purpose it may from time to time,
subject to advance written notice, save for in emergencies or unanticipated
instances, temporarily disconnect the electricity supply to the rented premises
and/or the building, partially or fully. The Lessor shall act insofar as
possible to curtail the time period of such electricity breaks, as aforesaid.
The Lessee hereby waives any contention and claim in connection
thereto.

    

    In the
event of a break in the supply of electricity to the rented premises, the Lessee
shall be liable from every aspect and at any time to operate the Lessee’s
generator to supply electricity to the rented premises, if and insofar as the
Lessee has a generator as aforesaid and insofar as the Lessee opts to do so. The
parties hereby clarify and agree that the Lessor shall not be liable, at any
time and for any reason, for the operation and/or non-operation of the generator
of the Lessee, if and insofar as such generator shall be installed, as
aforesaid.

    

    The
Lessee hereby undertakes to pay the Lessor (or at the request thereof to the
management company) in respect of the consumption of electricity in the rented
premises throughout the entire period of the tenancy in accordance with the
reading of an electricity meter in the rented premises and the rate according to
system load and consumption times for low voltage of the Electric Corporation,
as they may be at the times of the charge, from time to
time.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
Lessor is obligated to pay the Electric Corporation for the electricity to be
supplied to the building without any connection to the Lessor’s success in
collecting the sums in respect of electricity consumption from the tenants.
Accordingly, the Lessee hereby gives its consent that the Lessor (or the
management company) may, subsequent to providing written warning of at least 72
hours in advance, disconnect the electricity supply to the rented premises, both
in respect of the failure to pay for electricity consumption, as aforesaid, and
in any event of a fundamental breach of this agreement by the Lessee, provided
that solely for the purposes of this section it shall not be deemed a
fundamental breach of the agreement but rather a breach with respect whereto
written warning of 14 days was given to the Lessee and it failed to rectify the
breach within this 14-day period. The Lessee hereby explicitly exempts the
Lessor from any liability for any deficit and/or damage and/or loss likely to be
caused thereto as a result of the interruption in the electricity supply in the
circumstances specified herein above.

    

    Notwithstanding
the aforesaid, if, for any reason whatsoever, the electricity to the building
shall not be supplied in bulk or the Lessor shall request that the rented
premises or any part of the building shall be connected to the ordinary supply
of electricity (not in bulk), whether permanently or temporarily, at the
Lessor’s request, the Lessor shall contact the Electric Company directly
concerning all matters connected to the supply of electricity to the rented
premises and the consumption thereof by the Lessee and the aforesaid herein in
this section shall be revoked or altered, as the case may be, and all conditions
and rules of the Electric Corporation regarding all that pertains to the
connection and supply of electricity to the Lessee shall apply to the Lessee.
The Lessee shall bear all expenses involved in connection with the aforesaid
herein in this section. In the event that the Lessor requests that the Lessee be
returned to the supply of electricity in bulk, the Lessee shall act as
required.

    

    Without
derogating from the remaining provisions of the agreement with respect to the
arrangement of alterations in the rented premises and as a special and
fundamental provision of the agreement, the Lessee hereby undertakes to refrain
from performing any works and/or alterations whatsoever in the electricity
system in the rented premises and/or the building and/or any part thereof
without obtaining the consent of the Lessor in writing and in advance and
subject to the conditions of such consent.

    

    In the
event that as a result of a law, regulation, order or act of a government
authority and/or other competent authority, in the opinion of the Lessor it
becomes necessary to perform any alterations in the system of the electricity
supply to the rented premises, the Lessor shall perform all such alterations, as
aforesaid, and the Lessee shall have no contention whatsoever in respect of the
performance of the alteration, as aforesaid. The Lessor shall coordinate the
performance of the adaptation works, as aforesaid, with the Lessee, save for in
urgent cases.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In
addition, the Lessee shall pay the Lessor for the consumption of electricity for
air-conditioning of the rented premises, pursuant to the relative consumption of
water or electricity of the air-conditioning system in the building, in
accordance with Appendix E of this
agreement, while the Lessee’s share shall be calculated according to the share
of the rented premises in relation to the entire rented areas in the building.
For the avoidance of doubt, the expenses in respect of electricity for
air-conditioning shall come in addition to the rent and maintenance fees,
pursuant to this agreement.

    

    It is
clarified that the Lessee has requested to supply the Old Wing Area with
air-conditioning with a higher than ordinary level of cooling. In addition to
the aforesaid in any other place, the Lessee shall pay the Lessor an additional
payment in respect of the supply of air-conditioning with a stronger cooling
power than ordinary, in accordance with the formula specified in Appendix
E1.

    

    The
Lessor shall not bear liability and/or any obligation in connection with any
damage, including direct damage and/or resulting damage and/or indirect damage
the Lessee or any person, institution or corporation incurs as a result of a
break in the supply of electricity and/or air-conditioning to the rented
premises by the Lessor, as a result of the failure to pay on time as aforesaid,
save in the event that such damage was caused as a result of a break in the
electricity supply by the Lessor with malicious intent and not in accordance
with the provisions of this agreement.

    

    The
Lessee hereby waives finally, absolutely and irrevocably any right to sue the
Lessor and/or the management company in respect of breaks in the supply of
electricity to the rented premises and/or the building and/or disruptions in
such supply, provided that the Lessor failed to perform such disruptions with
malicious intent and not in accordance with the provisions of this agreement and
did its best to renew the regular supply thereof as soon as possible. The Lessee
hereby exempts the Lessor explicitly from any liability for a deficit and/or
damage and/or loss it is likely to incur as a result of the disruptions in the
electricity supply to the rented premises, save if such were caused as a result
of an act or omission with malicious intent of the Lessor and not in accordance
with the provisions of this agreement. Notwithstanding the aforesaid in any
other place, even if it is found that the Lessor is liable for the damages the
Lessee or any third party incurs in any matter, including in connection with the
supply or failure to supply electricity to the rented premises and/or other
parts of the building, in any event the Lessor and/or the management company
shall not bear liability for indirect damages and/or resultant damages and/or
damages that are not monetary.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (3)

            	
              The
      cost of ongoing maintenance of the fire detection system within the rented
      premises (shall be implemented by the Lessor). The Lessor declares that to
      date of the signature of this agreement, such cost is estimated at NIS 10
      for a detector per month.

            

    

    

    
      	
               
      

            	
              (4)

            	
              Maintenance
      services shall be charged at the rate stated in section 16 herein
      below.

            

    

    

    
      	
               
      

            	
              (5)

            	
              All
      payments and expenses in respect of the supply of gas, water and telephone
      in the rented premises and any other payment that shall apply in respect
      of the use of the rented premises and maintenance thereof, including
      maintenance of the systems therein, including air-conditioning systems
      within the rented premises.

            

    

    

    
      	
               
      

            	
              b.

            	
              In
      the event that any of the sums that the Lessee is to pay the Lessor
      pursuant to section a above shall be based on an invoice that relates to
      the entire  building, the Lessee shall pay the Lessor the
      appropriate relative share of the amount of the entire invoice, provided
      that for the purpose of calculating the relative share of the Lessee in
      the aforesaid payments, the proportion between the rented premises and the
      entire area of the building, whereto the invoice relates, shall be taken
      into account.

            

    

    

    
      	
               
      

            	
              c.

            	
              The
      Lessee undertakes to ensure of its own accord and at its own expense that
      the rented premises are cleaned.

            

    

    

    13.         Value
Added Tax

    

    The
Lessee undertakes to pay the Lessor Value Added Tax in addition to and together
with the payment of rent, including linkage differentials in respect thereof
and/or interest for delay and, in addition to and together with any additional
payment that it is obligated to pay the Lessor, pursuant to this agreement
and/or that the Lessor paid in place of the Lessee and the Lessee is required to
reimburse the Lessor, pursuant to the provisions o f this agreement and the
Lessor shall issue the Lessee a duly issued tax invoice. The date of settling
payment of the VAT shall be the date of payment thereof by the Lessor to the VAT
authorities, i.e., the 15th of the
second month of each quarter of the tenancy period.

    

    The
aforesaid herein in this section is valid also in the event that another tax
shall be imposed in addition to VAT or shall come in place thereof under
conditions that the law shall apply to rent fees and shall impose or permit the
transfer of the duty in respect thereof to the Lessee. The VAT shall be handled
as is the rent, for all intents and purposes.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    14.         Alterations
in the Rented Premises Subsequent to the Date of Delivery

    

    
      	
               
      

            	
              a.

            	
              Following
      the date of delivery, the Lessee may perform solely in the rented premises
      (not including public areas, but including lavatories, kitchenettes and
      hallways), at its expense and liability, subsequent to attaining the
      permission of the Lessor, who shall refuse solely on reasonable grounds,
      works and alterations it requires to set up and/or move internal permanent
      or movable partitions, to install telephone systems, air-conditioning,
      plumbing, electricity and/or communications, to connect and install the
      machinery, computers and equipment thereof and any other additional work
      or alteration necessary in the opinion of the Lessee to conduct its
      business in the rented premises, save for alterations likely to damage the
      construction, walls, water and electricity systems thereof and/or
      alterations affecting the façade of the building, whether the external or
      internal façade or the reasonable use of the building by the users in
      other units, all under the following
conditions:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      Lessee shall transfer the plans for the aforesaid works for the Lessor’s
      authorization and, insofar as the Lessor requires, also for the
      authorization of a safety consultant, the identity whereof shall be
      determined by the Lessor in advance and in writing. The Lessee shall bear
      the fees of the safety consultant, as aforesaid, and any cost and/or
      expense in connection therewith.

            

    

    

    
      	
               
      

            	
              (2)

            	
              The
      Lessor and safety consultant on behalf of the Lessor shall have the right
      to demand alterations to the plans, specification and works specifications
      and the Lessee undertakes to alter these in accordance with the demands of
      the Lessor and safety consultant at the expense of the Lessee and commence
      with the performance of the works solely subsequent to the Lessor and
      safety consultant having authorized such in
  writing.

            

    

    

    
      	
               
      

            	
              (3)

            	
              The
      provision of the Lessor’s authorization for the performance of the works
      is conditional, in addition to the aforesaid, on the Lessee having
      delivered to the Lessor copies of the insurance policies, in accordance
      with the provisions of section 17 herein
below.

            

    

    

    
      	
               
      

            	
              (4)

            	
              All
      works shall be performed by skilled professionals at a level accepted in
      similar high-tech buildings in the region of the rented premises and
      according to Israel standards and subject to the directives of the project
      manager.

            

    

    

    
      	
               
      

            	
              (5)

            	
              The
      Lessee shall perform the works in the rented premises in such manner and
      form that it fails to cause any disturbance to the activities in any other
      part of the building and/or to other tenants and the Lessee undertakes to
      strictly fulfill all instructions of the Lessor and take all means to
      prevent any disturbance, as
aforesaid.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (6)

            	
              The
      Lessee shall bear liability for any damage caused during and as a result
      of the performance of the works in the rented premises to any person and
      any property, including herein in the building and/or the rented premises
      and/or to other tenants and/or other rented premises and/or the Lessor and
      agents thereof, whether the works were performed by the Lessee or by
      anyone on behalf thereof.

            

    

    

    
      	
               
      

            	
              (7)

            	
              The
      Lessee agrees and authorizes that any sum that it expends to make
      alterations to adapt the rented premises for the purposes thereof, as
      aforesaid, shall not grant it vis-à-vis the Lessor any right to
      restitution or any payment in respect of the sums and/or the alterations
      it performed as aforesaid, not during the tenancy period nor during the
      evacuation of the rented premises or subsequent to the evacuation
      thereof.

            

    

    

    
      	
               
      

            	
              (8)

            	
              The
      Lessee shall obtain at its expense all licenses, authorizations and
      permits required to perform the alterations from the competent
      institutions and authorities, insofar as such are
  required.

            

    

    

    
      	
               
      

            	
              b.

            	
              Commencing
      on the date of signature of this agreement, Mr. Yuri Shushan and Mrs.
      Revital Cohen shall be responsible for safety on behalf of the Lessee in
      the rented premises and they shall be liable on behalf of the Lessee to
      obtain all authorizations and meet all standards required to meet the
      demands of the fire department, as they may be from time to time, in
      accordance with the contents solely of section 15 (h) including: (1)
      obtaining authorizations of all manufacturers of the materials and those
      performing the works, pursuant to section 14 (a) above, with respect to
      meeting standards, forthwith upon completion of the performance of the
      works and transmitting such to the Lessor on its first demand, (2) issuing
      authorizations to the Lessor forthwith upon the demand thereof with
      respect to meeting the standards of the fire department regarding the
      electricity works, fire detection and fire extinguishing systems, fire
      walls, areas and doors, performed by the Lessee and/or by anyone on behalf
      thereof in the rented premises and (3) ongoing management to ensure that
      escape routes in the rented premises to emergency exits shall be
      accessible at all times.

            

    

    

    Those in
charge of safety shall be available at all times at telephone numbers (054)
444-9991, (054) 645-0904 or (02) 548-9100. The Lessee may replace the entity
responsible for safety by way of written notice to the Lessor.

    

    The
Lessee shall be liable for any damage the Lessor and/or any person and/or body
and/or property shall incur as a result of the failure to fulfill the provisions
and/or procedures of safety and security in the rented premises, in accordance
with the provisions of this agreement and the directives of any authorities
pertaining to the matter. The Lessee hereby undertakes to indemnify the Lessor
within 7 days of receiving the first demand thereof in respect of any damage
and/or expense caused to the Lessor as a result of any claim or demand referred
vis-à-vis the Lessor and/or anyone on behalf thereof in respect of the Lessee’s
failure to meet the required safety standards and/or as a result of the failure
to fulfill provisions and undertakings of safety specified herein in this
agreement against the presentation of documentary proof and/or duly issued tax
invoices with respect to the actual payment of the expenses.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In the
event that the Lessee fails to completely fulfill the undertakings thereof
pursuant to this section 14 (b) herein above, the Lessor may (but is not
obligated to) perform the activities and undertakings applying to the Lessee or
any part thereof, as aforesaid, and the Lessee shall repay the Lessor any
expenses that it disbursed for this purpose within 7 days of receiving the first
demand thereof and against the presentation of documents of proof and/or duly
issued tax invoices with respect to the performance of the actual payment by the
Lessor and all provided that the Lessor gave the Lessee advance written warning
of 5 days prior to the performance of the activities, as aforesaid. Nothing in
the contents of this section may derogate from the Lessee’s duty to perform and
fulfill all undertakings thereof pursuant to section 14 (b) as aforesaid and/or
derogate from the liability of the Lessee, as specified in the section above,
also in respect of any action and/or deed that the Lessor performs as a result
of the Lessee’s failure to fulfill the undertakings thereof as specified herein
in this section.

    

    15.         Use of
the Rented Premises

    

    Without
derogating from the validity of the remaining provisions of the agreement, the
Lessee undertakes the following:

    

    
      	
               
      

            	
              a.

            	
              To
      manage the work solely within the confines of the rented premises and to
      use the rented premises solely for the objective of the tenancy and not
      for any other purpose.

            

    

    

    
      	
               
      

            	
              b.

            	
              To
      fail to place and/or hold any equipment, stock and any movables and/or
      other objects whatsoever in the courtyard and/or on the balconies of the
      rented premises and/or the building and/or in any other area outside the
      rented premises and to refrain from the use of any part of the building,
      aside from the rented premises, for any objective whatsoever, except for
      the use to access the rented
premises.

            

    

    

    Notwithstanding
the aforesaid, the Lessee may place on the balconies of the rented premises
garden furniture of the type to be authorized by the Lessor in advance and in
writing.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    It is
hereby clarified that save for the kitchenette for the use of the Lessee and
employees thereof, which is not to serve for the purposes of cooking, baking or
frying and which shall be implemented in the rented premises subject to the
Lessor’s authorization of the plans of the Lessee in connection with the
installation of a kitchenette, and pursuant to the provisions of this agreement,
the Lessee may not install in the rented premises dining rooms, kitchens,
kitchenettes, etc., unless it receives authorization for this in advance and in
writing from the Lessor and, if it receives authorization as aforesaid, it may
act solely in accordance with conditions to be determined, if determined, in the
authorization, as aforesaid.

    

    Notwithstanding
the aforesaid herein in this section, if any movables whatsoever of the Lessee
shall be found on the terraces and/or outside the rented premises and the Lessee
fails to remove such following the first request of the Lessor, then the Lessor
may but is not obligated to remove such movables from the building and/or the
area at the Lessee’s expense without there being any liability for the Lessor to
pay for such. The Lessor shall not act as aforesaid, save if it gave 24 hours
warning thereof to the Lessee in advance and in writing.

    

    The
failure to exercise the rights of the Lessor as above shall not constitute any
consent on its part to holding the movables as aforesaid on the terraces and/or
outside the rented premises, and it shall not grant the Lessee any additional
right to continue to hold the movables there and it shall not preclude the
Lessor from undertaking any procedure whereto it is entitled by law and/or
pursuant to the conditions of this agreement.

    

    
      	
               
      

            	
              c.

            	
              To
      refrain from causing any nuisance, disturbance and unpleasantness to any
      other persons found in or visiting the area wherein the rented premises
      are located, to neighbors and/or the surroundings as well as to maintain
      the cleanliness of the rented premises and environs
    thereof.

            

    

    

    The
Lessee hereby undertakes to refrain from introducing to the sewage network and
to ensure that it fails to cause the introduction thereto of unsuitable spills,
pursuant to the provisions of the Ministry of Health on the
subject.

    

    A Lessee
who produces a quantity of refuse and/or garbage in a regular and ongoing
manner, which is unusual in the Lessor’s opinion, the Lessor shall be entitled
to impose on the Lessee the exceptional expenses of the removal of the refuse of
the same Lessee from the building wherein the rented premises are
located.

    

    
      	
               
      

            	
              d.

            	
              To
      fulfill all laws, regulations and bylaws applying and/or those that shall
      apply during the tenancy period to the rented premises, the use thereof
      and the business, works and activities to be performed therein by the
      Lessee and to be liable vis-à-vis the government and municipal
      institutions and authorities for the payment of all fines thereof, as a
      result of the failure to fulfill the provisions of this section
      herein.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              e.

            	
              To
      use for the purpose of access to the rented premises solely the access
      routes marked and/or arranged in the building as they shall be from time
      to time, to park vehicles and transport vehicles in the places intended
      therefor and to refrain from the use of any motorized vehicles or other
      vehicle likely to damage the access routes and parking surfaces and to
      observe the instructions to be issued by the Lessor and/or anyone on
      behalf thereof from time to time in connection with the access
      arrangements and parking within the confines of the
  lot.

            

    

    

    
      	
               
      

            	
              f.

            	
              To
      pay in full and on time all payments it owes to the Lessor and/or the
      competent authorities on the dates stated for the settlement
      thereof.

            

    

    

    
      	
               
      

            	
              g.

            	
              To
      enable the Lessor and/or a representative thereof to visit the rented
      premises at any reasonable time and insofar as possible following advance
      coordination and inspect the state and use being made thereof in order to
      assess the degree of fulfillment of the provisions of this agreement
      and/or to take the actions and means determined herein in this agreement
      or in any law, which require entry to the rented premises, including
      herein the following:

            

    

    

    
      	
               
      

            	
              (1)

            	
              To
      perform within the confines of the rented premises the repairs necessary
      for the requirements of the building or any part
  thereof.

            

    

    

    
      	
               
      

            	
              (2)

            	
              To
      perform construction and/or demolition, which the Lessor is entitled to
      perform pursuant to this agreement. To the extent possible according to
      the sole discretion of the Lessor, the Lessee shall be given the
      possibility to perform such acts of its own accord within 7 days of the
      date of the Lessor’s request and, in accordance with the provisions and
      authorization of the Lessor in advance and in writing, including with
      respect to the manner of performance of the activities and the identity of
      the entity performing the
activities.

            

    

    

    
      	
               
      

            	
              (3)

            	
              To
      show the rented premises to potential buyers and/or
    tenants.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (4)

            	
              If
      some of the building’s systems are located in the rented premises and
      access thereto is through the rented premises, the Lessee shall allow the
      Lessor access to the same systems at any time for the purpose of the
      inspection and repair thereof. In an emergency, insofar as there is no one
      present in the rented premises and/or the rented premises are locked and
      there is a need to enter the rented premises due to an emergency
      situation, the Lessor and/or anyone on behalf thereof shall telephone the
      Lessee’s operations center, telephone no. (02) 625-7002 (the Shion
      Company). In the event that the aforesaid telephone number of the Lessee’s
      center changes, the Lessee shall inform the Lessor of the new number
      forthwith and in writing. If the Lessor has telephoned the Lessee’s
      center, it shall inform the person who answers the phone that he shall
      dispatch a representative of the Lessee hastily since there is an
      emergency situation and an urgent need to enter the rented premises. In
      the event there is no reply at the number, as aforesaid, for any reason
      and/or in the event that a representative of the Lessee fails to arrive
      within the time the Lessor or anyone on behalf thereof requires, from time
      to time, according to the circumstances of the matter, the Lessor and/or
      anyone on behalf thereof may break into the rented premises without delay.
      The Lessee agrees and declares that any damages and/or expenses it shall
      incur, directly and/or indirectly, in connection with the break-in, as
      aforesaid, shall be at the expense thereof and/or the sole liability
      thereof and it exempts the Lessor of any liability for any expense and/or
      damage it incurs, directly and/or indirectly, in connection with the
      break-in, even if it becomes apparent in retrospect that the Lessor could
      have avoided breaking in and/or could have broken in another manner and/or
      another place, all subject to the fact that the break-in, as aforesaid,
      shall be performed in cases where, in the circumstances of the matter, it
      was reasonable to assume that this constituted an emergency, which
      justified taking steps, as aforesaid, by the Lessor. For the avoidance of
      doubt, following the break-in, the Lessor shall not be obligated to place
      any security whatsoever at the rented premises subject to the fact that in
      the event it received a telephone response, as aforesaid, the Lessor made
      certain that a representative of the Lessee is aware of the situation at
      the rented premises.

            

    

    

    
      	
               
      

            	
              h.

            	
              To
      fulfill the instructions of the Lessor and directives of the competent
      authorities connected to the arrangements and procedures of fire
      extinguishing and prevention of fires, the Home Front Command, safety and
      security, in connection solely with the rented premises and to purchase
      and maintain at its expense, pursuant to the abovementioned bodies, all
      precautionary and safety equipment necessary to apply and observe the
      aforementioned instructions (including firefighting equipment) and to
      connect it to the center on that floor, all in connection and in relation
      solely to the rented premises, save for public infrastructure and external
      walls of the rented premises, which fall under the liability of the Lessor
      and with respect whereto the provisions of this sub-section shall not
      apply to the Lessee, unless a provision and/or demand, as aforesaid, in
      connection  therewith ensues from the type and/or manner of
      management of the Lessee’s business in the rented
  premises.

            

    

    

    
      	
               
      

            	
              i.

            	
              According
      to the demand of the Lessor, to demolish and/or alter any addition or
      alteration introduced by the Lessee to the rented premises and/or the
      building that were constructed not in accordance with the provisions of
      this agreement and to restore the state of the rented premises and
      building to the former state thereof, all at the Lessee’s
      expense.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              j.

            	
              The
      Lessee hereby undertakes to refrain from hanging and installing signs
      and/or other means of advertisement in the area and/or in any part of the
      building. The signage, location thereof, type thereof, size and form
      thereof shall be determined by the Lessor, at its sole discretion, and the
      Lessor shall install such at the expense of the
  Lessee.

            

    

    

    
      	
               
      

            	
              k.

            	
              For
      the avoidance of doubt, it is hereby explicitly clarified that the Lessee
      may not install air-conditioners in the walls and/or windows of the rented
      premises.

            

    

    

    16.         Maintenance
and Repairs

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee undertakes to use the rented premises throughout the period of the
      tenancy in a reasonable manner and to maintain the rented premises and all
      facilities therein or connected thereto in good condition, functional,
      clean and orderly.

            

    

    

    
      	
               
      

            	
              b.

            	
              In
      return for payment of the aforesaid sums in sub-section d herein below,
      the Lessor hereby undertakes to supply the maintenance services specified
      in sub-section c herein below, all under the conditions specified
      there.

            

    

    

    
      	
               
      

            	
              c.

            	
              Maintenance
      services provided by the Lessor shall be of the type, extent and under the
      conditions specified herein below:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Maintenance
      of the structure, maintenance of the mechanical systems in the public
      areas, public plumbing, public sewage, public electricity, maintenance of
      elevators, gardening, maintenance of public signage, maintenance and
      cleaning of public areas, repair of problems and/or damages caused to
      systems of the rented premises as a result of reasonable and ordinary
      wear, save for the air-conditioning systems within the rented premises and
      the systems installed, added and/or altered in the rented premises by the
      Lessee and/or anyone on behalf
thereof.

            

    

    

    
      	
               
      

            	
              (2)

            	
              Air-conditioning
      systems, including central cooling services, but not including treatment
      and maintenance of the air-conditioning appliances within the rented
      premises, on business days and at times that are customary. Heating shall
      be installed in the corner units.

            

    

    

    The
Lessor shall supply the Lessee, if such is required, with cooling services also
during the winter season to an extent and under the conditions to be concluded
between them.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For the
avoidance of doubt, it is hereby explicitly clarified that subject to the
undertaking of the Lessor to repair problems solely in the central
air-conditioning system, if there are such, within a reasonable time from the
date of receiving notice of the Lessee of the aforesaid impairment, nothing in
the provisions of this agreement may imposed any liability whatsoever thereon
for the disruptions likely to occur in the operation of the air-conditioning
systems whether due to problems or maintenance activities or due to any other
reason without exception, and the Lessee shall not be entitled to demand and/or
receive from the Lessor any compensation and/or damage fees and/or payment in
respect thereof for any reason whatsoever.

    

    The
Lessee may not touch the air-conditioning systems in the rented premises and/or
deal with them and/or maintain them and/or repair them and/or perform any action
and/or enable others to do so, save for licensed contractors to whom the Lessor
agrees in advance and in writing to their handling of the air-conditioning
system in the rented premises and to do anything of the aforesaid with the
equipment. If the Lessee breaches any of the provisions of this section and as a
result thereof damage is caused to the air-conditioning systems, the Lessee
shall bear the full expenses of the repair of the damage in practice, according
to invoices to be presented to the Lessee together with interest for delay. For
the avoidance of doubt, the Lessee shall bear all costs of the handling and
maintenance of the air-conditioning systems within the rented
premises.

    

    
      	
               
      

            	
              (3)

            	
              Environmental
      protection – to an extent to be determined from time to time by the Lessor
      according to its sole and exclusive
discretion.

            

    

    

    
      	
               
      

            	
              (4)

            	
              Insurance
      – The relative suitable share of the expenses and insurance fees that the
      Lessor shall pay for insurance of the building and systems therein against
      loss or damage as a result of the risks of fire, explosion, earthquake,
      storm and gale, flood, water damage, strikes, riots and malicious damage,
      as well as any additional risk necessary in the Lessor’s opinion. This
      insurance shall not include the contents of the rented premises s well as
      repairs, alterations and additions to the rented premises made by and/or
      for the Lessee.

            

    

    

    The
parties hereby agree explicitly that nothing in the arrangement of insurance, as
aforesaid herein in this section, may derogate from the Lessee’s liability,
whether pursuant to this agreement or according to law, and nothing therein may
impose any liability whatsoever on the Lessor with respect to loss and/or damage
to the building.

    

    (Herein
below: “Maintenance
Services”)

    

    
      	
               
      

            	
              d.

            	
              In
      return for maintenance services the Lessee shall pay the Lessor, in
      addition to the rent specified in section 10 above and in addition to the
      payments specified in section 12 above, the sum of $2.50 a month for each
      square meter of the rented premises (gross), save in respect of the
      Machinery Area and the Gallery Area (hereinafter: “the Maintenance
      Fees”).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Maintenance
fees shall be translated into shekels on the date of signature of this agreement
and shall constitute the base for the payment of maintenance fees (“the
principle”), and shall be paid to the Lessor while linked to the Index. For the
avoidance of doubt, it is clarified that the linkage differentials shall be
calculated in accordance with the known index on the date of any payment in
practice of maintenance fees, as opposed to the basic index.

    

    The
Lessee shall pay the Lessor maintenance fees in advance for every 3 months of
the tenancy period, as specified in section 11 above.

    

    
      	
               
      

            	
              e.

            	
              Together
      with the payment of the maintenance fees, the Lessee shall pay the Lessor
      the VAT that applies to such payments against a duly issued tax invoice.
      The date of settling the VAT shall be the date of payment thereof to the
      VAT authorities pursuant to law, which is to say the 15th
      day of the second month of each quarter of the tenancy
    period.

            

    

    

    
      	
               
      

            	
              f.

            	
              For
      the avoidance of doubt, the parties agree that the Lessor as aforesaid
      shall not be deemed “the guardian” of the rented premises and/or the
      contents thereof, regarding the provisions of the Watchmen Law,
      5727-1967.

            

    

    

    
      	
               
      

            	
              g.

            	
              The
      Lessee undertakes to inform the Lessor, as the case may be, forthwith with
      no delay, of any loss, impairment, or damage caused to the rented premises
      or to any part thereof.

            

    

    

    
      	
               
      

            	
              h.

            	
              Without
      derogating from the aforesaid, the Lessee undertakes to repair at its own
      expense any fault or impairment wherefore the Lessee is liable pursuant to
      section 17A herein below at the latest within seven (7) days of the date
      of the occurrence thereof.

            

    

    

    
      	
               
      

            	
              i.

            	
              In
      the event the Lessee fails to fulfill in full an undertaking pursuant to
      sub-sections a to h above, the Lessor of its own accord
      may  perform (but is not obligated to do so) the maintenance and
      repairs that apply to the Lessee, subsequent to having given 7 days’
      warning in advance and in writing to the Lessee. The Lessee shall
      reimburse the Lessor for all expenses that it expended for this purpose
      within 7 days of receiving its first demand and against the presentation
      of documentary proof with respect to payment of the actual expenses.
      Nothing in the aforesaid herein in this section may derogate from the
      Lessee’s duty to perform the repairs of the rented
    premises.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    17.         Insurance
and Liability

    

    
      	
               
      

            	
              A.

            	
              In
      the relations between the parties and without derogating from the
      liability of the Lessee pursuant to any law, the Lessee shall be solely
      liable for any damage caused to any person and/or body and/or property
      during and as a result of the performance of the works in the rented
      premises by the Lessee and/or anyone on behalf thereof, save for damages
      in respect of the performance of the initial adaptation works to be
      performed by the Lessor, pursuant to the provisions of this agreement and,
      as well, the Lessee shall be liable for any damage caused to any person,
      body or property in connection with the possession and/or use thereof
      and/or anyone on behalf thereof, including the guests thereof in the
      rented premises. The Lessee undertakes to indemnify the Lessor in respect
      of any damage proved or monetary expense caused thereto, as a result of
      any claim or demand to be addressed vis-à-vis the Lessor, in connection
      with the incidents within the confines of the Lessee’s
      liability.

            

    

    

    The
parties hereby agree that the Lessee shall indemnify the Lessor, as aforesaid
herein in this section above, on condition that the Lessor notified the Lessee
forthwith upon receiving the claim or demand, enabled the Lessee to participate
in the defense and did not reach a settlement without the authorization of the
Lessee. It is clarified that the Lessee shall bear any expenses, including
lawyers’ fees that the Lessor bears in connection with all the aforesaid,
against the presentation of suitable invoices to the Lessee. In any event, the
Lessee shall be liable to restore the rented premises to the former state
thereof as on the date of delivery, including the initial adaptation works, as
defined above, and subject to reasonable wear.

    

    
      
        	
              	
                B.

              	
                (1)
      Prior
      to the date of delivery as defined in section 6 (d) above, and without
      derogating from the generality of the aforesaid in section A above and
      from the Lessee’s undertakings pursuant to this agreement and pursuant to
      the provisions of any law and in addition thereto, the Lessee undertakes
      to purchase at its expense and maintain in effect throughout the entire
      tenancy period the insurance policies specified herein below with an
      extent of coverage as defined alongside them, as
  follows:

              

      

    

    

    
      	
               
      

            	
              a.

            	
              Employers’
      Liability Insurance – Insurance of the Lessee’s liability vis-à-vis the
      employees thereof in respect of any personal injury to any employee during
      and as a result of the employment thereof, with a customary liability
      limit at the time of the arrangement of the
  insurance.

            

    

    

    
      	
               
      

            	
              b.

            	
              Third
      Party Liability Insurance – Insurance of the Lessee’s liability vis-à-vis
      the Lessor and any third party whatsoever in an amount that shall not be
      less than a shekel sum equivalent to $1,000,000. The policy shall include
      a “cross liability” section. The policy shall be extended to indemnify the
      Lessor in respect of the liability thereof for acts and/or omissions of
      the Lessee.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              c.

            	
              Property
      Insurance – Insurance of the contents of the rented premises including
      improvements and investments made therein of any kind and type whatsoever,
      to the full value thereof against all risks customary including fire,
      explosion, earthquake, storms, gales, floods, water damage, airplanes,
      collisions, strikes, riots, malicious damages, burglary and broken
      glass.

            

    

    

    The
parties hereby agree that the Lessee may refrain from arranging the insurance
against broken glass as aforesaid in sub-section c herein provided that the
exemption in section 17 (b)(2)(1) herein below shall apply as if broken glass
insurance had been arranged.

    

    
      	
               
      

            	
              d.

            	
              Consequential
      Damage Insurance – Consequential damage insurance for a period no less
      than 12 months as a result of loss or damage to the property of the
      Lessee, the rented remises and the building from risks as specified in
      section 17B (1)(c) above. The parties hereby agree that the Lessee may
      refrain from the arrangement of the insurance as aforesaid herein in this
      sub-section (d) provided that the exemption in section 17 (b)(2)(1) herein
      below shall apply, as if such insurance had been
  arranged.

            

    

    

    
      	
               
      

            	
              e.

            	
              In
      the event and insofar as the Lessee shall perform any works whatsoever in
      the rented premises, subsequent to the completion of all the initial
      adaptation works, as aforesaid in section 5 herein in this agreement – the
      insurance of the works performed by the Lessee and/or on behalf thereof in
      the rented premises as well as “third party liability insurance” at the
      time of the performance of the works with a liability limit that shall be
      no less than the sum of $500,000 and employers’ liability insurance with a
      liability limit customary at the time of the arrangement of the insurance.
      Third party liability insurance shall be extended to include a
      cross-liability section as well as indemnity of the Lessor in respect of
      the liability thereof as the owner and/or manager of the rented
      premises.

            

    

    

    
      
        	
              	
                f.

              	
                (1)
      Without
      derogating from the Lessee’s liability pursuant to this agreement or
      according to any law, the Lessee declares that it shall arrange and
      fulfill, at its expense, whether of its own accord or by way of
      contractors on behalf thereof, commencing on the date of the beginning of
      the performance period of the adaptation works in the rented premises
      (hereinafter in this section: “the Works”),  with a licensed
      reputable insurance company, a Works Insurance policy as specified herein
      below (hereinafter: “Works Insurance”), throughout the entire period of
      the works, in its name, in the contractor’s name, the sub-contractors, in
      the Lessor’s name, the management company and the name of those coming by
      virtue thereof, against loss, damage or liability connected to or ensuing
      from the performance of the works. Works insurance shall include the
      following insurance chapters specified herein
  below:

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Chapter
(1) – Property Damage

    

    All Risks
Insurance insures against the physical and unanticipated loss or damage that
shall be caused to the works during the period of insurance. The chapter
comprises explicit expansion with respect to coverage of proximate property and
property being worked on with a liability limit in the amount of at least
$50,000. The insurance shall include a section with respect to the waiver of the
right of subrogation in favor of the Lessor, the management company and anyone
acting on behalf thereof as well as vis-à-vis other rights holders in the
building wherein the rented premises are located (who have a similar waiver in
favor of the Lessee in the insurance of the property thereof), provided that the
waiver, as aforesaid, shall not apply in favor of a person who caused damage
maliciously.

    

    Chapter
(2) – Third Party Liability

    

    Liability
insurance vis-à-vis third parties in respect of bodily injury or damage to
property caused during the period of the works, with a liability limit of
$1,000,000 per incident for the insurance period.

    

    Coverage
shall include explicitly also a section on cross-liability. The chapter as
aforesaid shall not include any limit on the matter of the following
topics:

    

    
      	
               
      

            	
              a.

            	
              Subrogation
      claims of the National Insurance Institute in respect of employees of
      contractors and sub-contractors employed on the site of the
      Works.

            

    

    
      	
               
      

            	
              b.

            	
              Personal
      injury ensuing from the use of mechanical engineering equipment, which is
      a motorized vehicle, and there is no duty to insure it with compulsory
      insurance.

            

    

    
      	
               
      

            	
              c.

            	
              Liability
      for damage caused as a result of earthquakes and the weakening of an
      abutment with a liability limit in the amount of $250,000 per
      incident.

            

    

    

    Chapter
(3) – Employers Liability

    

    Liability
insurance vis-à-vis employees performing the works in respect of personal injury
or illness caused to any one of them within the confines of the performance of
the works during the period of performance, while performing and as a result of
the performance of the works, with a liability limit of $5,000,000 for the
Plaintiff per incident and period of insurance. The insurance shall not include
any limit with respect to contractors, sub-contractors and employees thereof,
works performed at heights and in depth, lures and poisons, as well as with
respect to the employment of youth.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Extent of
insurance coverage in contractors’ works insurance shall be no less than the
conditions known as “Bit 2005” conditions or a
policy similar thereto at the time the insurance is arranged.

    

    (2)           Works
insurance shall include an explicit condition to the effect that the insurer may
not revoke it and/or restrict the extent thereof unless the insurer delivered
notice to the Lessor by way of registered mail of its intent to do so at least
30 days in advance.

    

    (3)           For
the avoidance of doubt, the Lessee and/or anyone on behalf thereof shall bear
the sums of the deductible stated in the insurance policies. These sums may be
set off by the Lessor from any amount owing to the Lessee pursuant to this
agreement.

    

    (4)           The
policies shall include a provision to the effect that solely the Lessee and/or
anyone on behalf thereof alone shall be liable for the payment of the
premium.

    

    (5)           The
policies shall include a provision to the effect that they constitute primary
policies for each policy that was separately taken out by an individual of the
individuals of the insured party.

    

    (6)           The
Lessee undertakes to present to the Lessor, no later than the date of
commencement of the performance of the works authorization of the arrangement of
insurance by the insurer thereof and/or the insurer of the contractor on behalf
of the Lessee of the performance of works insurance, in accordance with the
authorization of the arrangement of insurance attached hereto to this agreement
as Appendix
F1, and constituting an integral part thereof (hereinafter:
“Authorization of the Arrangement of Insurance”). The parties hereby agree
explicitly that the arrangement of the insurances, as aforesaid, the
presentation thereof and/or the amendment thereof fail to constitute
authorization with respect to the suitability thereof and shall not impose any
liability whatsoever on the Lessor and/or the management company and shall not
restrict the liability of the Lessee pursuant to this agreement or pursuant to
any law.

    

    (7)           The
Lessee, in its name and in the name of the contractor/s on behalf thereof,
hereby exempts the Lessor, the management company and those on behalf thereof as
well as other rights holders in the building wherein the rented premises are
located (who have agreements that grant them rights in the building wherein the
rented premises are located, which include a similar exemption in favor of the
Lessee) from any liability for any loss or damage whatsoever to property of the
Lessee and/or anyone on behalf thereof, provided that the exemption, as
aforesaid, shall not apply in favor of an individual who caused damage
maliciously.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              (2)

            	
              The
      following provisions shall apply to policies, as aforesaid in section
      17B(1) above:

            

    

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee shall perform the aforesaid insurances with a recognized and duly
      licensed insurance company, shall update the sums of the insurance, shall
      strictly fulfill all provisions of the policies and shall pay the premiums
      on time.

            

    

    

    
      	
               
      

            	
              b.

            	
              The
      Lessee shall ensure that the insurer waives the right of subrogation
      against the Lessor, other tenants and other possessors of property, the
      managers and employees thereof and anyone on behalf thereof, while all
      that pertains to the other tenants and possessors, as aforesaid herein in
      this sub-section b, shall be subject to the fulfillment of a similar
      section in the agreements signed therewith. This sub-section shall not
      apply in favor of anyone who has caused damage
  maliciously.

            

    

    

    
      	
               
      

            	
              c.

            	
              At
      the Lessor’s request, the Lessee shall present to the Lessor all insurance
      policies issued thereto in accordance with this section 17 or the
      insurance authorization for the rented premises, attached hereto as
      Appendix F to this agreement, signed by the insurer. In addition, the
      Lessee shall present to the Lessor and at the request thereof any
      amendment or revision to the policy and at the reasonable request of the
      Lessor, the Lessee shall be obligated to add and/or update and/or amend
      the insurance policies to the satisfaction of the Lessor so that they
      fulfill the criteria set forth herein in this section
  17.

            

    

    

    
      	
               
      

            	
              d.

            	
              The
      Lessee undertakes to use the funds received from the insurance company in
      accordance with the policies solely to rectify forthwith the damages
      and/or policies. Nothing in the aforesaid may limit and/or derogate from
      the Lessor’s right to exercise the rights thereof pursuant to the
      policies. The policy shall include a provision that the Lessor and the
      insurance company undertake to act pursuant to this
    section.

            

    

    

    
      	
               
      

            	
              e.

            	
              The
      Lessee’s insurances shall be defined as primary insurance and shall
      include an explicit condition to the effect that they take precedence over
      any other insurance the Lessor has
arranged.

            

    

    

    This
insurance entitles the Lessor to full indemnity owing pursuant to the conditions
thereof without the Lessor’s insurers demanding participation in coverage of the
damage or liability connected to the tenancy agreement. Likewise, the policies
shall include a provision to the effect that they shall not be restricted or
revoked unless written notice by way of registered mail shall be delivered to
the Lessor 30 days in advance.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              f.

            	
              The
      Lessee declares that it shall have no contention or demand or claim
      against the Lessor, the services company or other tenants in the building
      in respect of any damage whereto it is entitled to indemnity in respect
      thereof, according to the insurances that it undertook to arrange pursuant
      to this section or was entitled to had it not been for the deductible for
      damages stated in the same insurances, and it hereby exempts the Lessor
      and other tenants and other possessors in the building from any liability
      for damage as aforesaid.

            

    

    

    Nothing
in the arrangement of the aforesaid insurances by the Lessee may restrict or
derogate in any manner whatsoever from the undertakings of the Lessee in
accordance with this agreement or release it from the duty to compensate the
Lessor and/or any other person whatsoever in respect of any damage caused
directly or indirectly in connection with the property wherefore it is liable in
respect thereof and/or as a result of the activity thereof and/or from the
Lessee’s use of the rented premises and/or as a result of the non-fulfillment of
the provisions of this agreement by the Lessee and/or as a result of the
performance of works in the rented premises by the Lessee. Payment of any
insurance benefits whatsoever to the Lessor shall serve solely to be deducted
from the amount of indemnity and/or compensation whereto the Lessor is entitled,
as the case may be, in respect of the damage or loss.

    

    The
contents of this section shall add to and not derogate from any other provision
herein in this agreement with respect to the exemption from liability vis-à-vis
the Lessor and with respect to the imposition of liability on the
Lessee.

    

    
      	
               
      

            	
              g.

            	
              The
      Lessee undertakes to fulfill the conditions of the policy, to pay the
      insurance fees in full and on time, to ensure and make certain that the
      insurance policies for the rented premises shall be renewed from time to
      time, as required and shall remain valid throughout the entire period of
      the tenancy.

            

    

    

    
      	
               
      

            	
              h.

            	
              If
      the Lessee fails to fulfill the undertaking thereof according to this
      section 17 herein in its entirety, the Lessor shall be entitled, but not
      obligated, to arrange the insurances or part thereof in place of the
      Lessee and at the expense thereof and to pay in place of the Lessee any
      amount, without derogating from the Lessor’s right to any other relief. In
      such instance, the Lessor shall be entitled to the refund of the expenses
      thereof in this context together with interest for delay as specified in
      section 2 above.

            

    

    

    
      	
               
      

            	
              i.

            	
              Without
      derogating from the generality of the aforesaid in section a above, the
      Lessee shall be liable for any claim wherefore the Lessor is likely to be
      obligated as a result of the Lessor’s breach or failure to fulfill the
      provisions of any law or license or competent authority or as a result of
      the breach of an undertaking of the Lessee pursuant to this agreement, and
      the Lessee shall indemnify the Lessor in respect of any expense or damage
      whatsoever, if there are such, in connection
  therewith.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
parties hereby clarify and agree that the Lessee is solely liable and shall
indemnify and compensate the Lessor forthwith upon its first demand in respect
of any damage and/or expense the Lessor incurs, directly or indirectly,
including as a result of a claim or complaint from any third party whatsoever in
connection with the use and/or handling by the Lessee of chemical and/or
biochemical and/or other materials including but not solely the storage thereof,
the spill thereof, the drainage thereof including the leaking thereof, for any
reason whatsoever, emission of gases of any kind and for any reason from the
rented premises and/or from any apparatus and/or system in the rented premises,
and including the animals and/or animal house held in the rented premises, if
such is held. Indemnity by the Lessee of the Lessor as aforesaid herein in this
sub-section shall be against the presentation of documentary proof and/or
suitable invoices to the Lessee.

    

    Notwithstanding
the aforesaid in any other place, the Lessor shall not be liable in any case for
any damage, expense, loss or impairment caused, directly or indirectly, to any
person and/or body in connection with the equipment and/or materials and/or
animals and/or animal house whereof the Lessee makes use in the rented premises,
including all byproducts thereof, as well as, but not solely, the transport
thereof, storage thereof, evacuation thereof or emptying thereof. And the Lessee
hereby declares that it agrees to be solely liable and indemnify the Lessor
forthwith upon its first demand in respect of any expense or damage in
connection therewith.

    

    
      	
               
      

            	
              d.

            	
              If
      possible, all the insurances shall indicate therein that following each
      payment of compensation by the insurer, the limits of liability shall
      automatically be restored to their former state. The Lessee shall be
      liable to pay the additional premium resulting
  therefrom.

            

    

    

    
      	
              18.

            	
              Transfer
      and Endorsement of Rights

            

    

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee shall not be entitled to transfer the rights in the rented premises
      and rights pursuant to the agreement or to permit any use whatsoever of
      the rented premises or any part thereof to anyone else, whether for
      proceeds or not for proceeds, directly or indirectly, without obtaining
      the permission of the Lessor to do so, in advance and in writing. The
      Lessor shall refuse to give the consent thereof solely on reasonable
      grounds.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              b.

            	
              The
      Lessor may sell and transfer to another the rights thereof in the lot
      and/or the building or any of the units thereof, including the rented
      premises and/or the rights pursuant to the agreement or to encumber them
      or mortgage them without the need for the prior consent of the Lessee,
      provided that the Lessee’s rights pursuant to the provisions of the
      agreement and/or according to any law shall not be infringed. The Lessor
      shall inform the Lessee insofar as it shall sell the rights thereof in the
      rented premises to another.

            

    

    

    
      	
               
      

            	
              c.

            	
              Without
      derogating from the aforesaid, the Lessor may transfer, assign, endorse
      and mortgage in favor of another all the rights thereof to the rent,
      subject of the agreement, and the Lessee shall act pursuant to and in
      accordance with the written provisions with which the Lessor provides him
      on this matter, provided that the rights of the Lessee according to the
      provisions of the agreement and/or according to any law shall not be
      infringed.

            

    

    

    
      	
               
      

            	
              d.

            	
              The
      Lessee undertakes to inform the Lessor of any change in ownership of the
      Lessee, within 7 days of the occurrence of such
  change.

            

    

    

    
      	
               
      

            	
              e.

            	
              The
      parties agree that the Lessee may transfer part of the rights thereof in
      the rented premises, pursuant to this agreement, to a sub-tenant, subject
      to the cumulative fulfillment of the conditions following herein below:
      (1) the sub-tenant is a factory in the high-tech industry; (2) the Lessee
      shall obtain the consent of the Lessor to the identity of the sub-tenant,
      in advance and in writing, and the parties agree that the Lessor shall
      only refuse the preference of the Lessee on reasonable grounds; and (3)
      the Lessee shall remain solely liable for the fulfillment of all
      conditions and undertakings pursuant to this agreement vis-à-vis the
      Lessor, including but not solely all payments (of any kind), the objective
      of the rented premises, the use of the rented premises, the maintenance
      and evacuation of the rented premises, with respect to the entirety of the
      rented premises.

            

    

    

    19.         Fundamental
Sections and Advance Agreed Compensation

    

    
      	
               
      

            	
              a.

            	
              The
      parties hereby agree that the provisions of sections 6(a), 6(e1), 8(a), 9,
      10, 11, 12(a), 13, 14, 15(a)(b)(h), 16(c)(d)(e), 17, 18(a), 21 and 22 are
      principal and fundamental sections of this agreement as the term is
      defined pursuant to the Contracts (Reliefs Due to Breach of Contract) Law
      5731-1970. The breach of these sections or any one of them shall be deemed
      a fundamental breach as this term is defined pursuant to the Contracts
      (Reliefs Due to Breach of Contract) Law
  5731-1970.

            

    

    

    
      	
               
      

            	
              b.

            	
              The
      breach of the provisions of sections 9, 10, 11, 12(a), 14, 16(c)(d)(e), 17
      and 21 of this agreement that failed to be rectified even subsequent to
      the provision of a warning of 7 days in writing to the Lessee shall grant
      the Lessor, in addition to all reliefs and remedies granted thereto, the
      right to agreed compensation estimated in advance in the amount of the
      rent and maintenance fees in respect of the rented premises for 4 months
      of rent, with the addition of VAT, as it may be from time to time
      (hereinafter: “the Agreed Compensation”). The agreed compensation shall be
      linked to an index from the basic index to an index to be known at the
      time of actual payment. The parties hereby declare that the amount of
      agreed compensation is effective and reasonable and has been determined by
      them in accordance with damages they anticipate in the event of a
      fundamental breach of the
agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              c.

            	
              Without
      derogating from the undertakings of the Lessee pursuant to this agreement,
      the parties hereby agree that a delay by the Lessee in the payment of rent
      and/or any other payment imposed thereon, pursuant to this agreement, that
      exceeds 3 business days shall bear interest for delay, as defined herein
      in this agreement, which shall apply commencing on the first day of the
      delay in payment, all in addition to and without derogating from any other
      reliefs and remedies granted to the Lessor pursuant to this agreement
      and/or pursuant to any law.

            

    

    

    
      	
               
      

            	
              d.

            	
              For
      the avoidance of doubt, the parties agree that a delay in payment of the
      rent, management fees and/or any other payment, which the Lessee is
      obligated to pay to the Lessor, pursuant to the provisions of this
      agreement that fails to exceed 3 business days shall not be deemed a
      breach of this agreement and shall not entitle the Lessor to any relief of
      any kind and type whatsoever.

            

    

    

    20.         Revocation
of the Tenancy and the Agreement

    

    The
Lessee hereby agrees and undertakes that notwithstanding the provisions of this
agreement with respect to the period of the tenancy, the Lessor may – but is not
obligated to – revoke this agreement and evacuate the Lessee from the rented
premises by a one-sided notice of 14 days in advance and in writing, provided
that the Lessee is given an opportunity of 14 days to rectify the breach in each
of the following cases specified herein below:

    

    
      	
               
      

            	
              a.

            	
              If
      the Lessee breached and/or failed to fulfill on time one of the conditions
      and/or undertakings, pursuant to the fundamental
  sections.

            

    

    

    
      	
               
      

            	
              b.

            	
              If
      a receiver and/or a liquidator (including a provisional one) is appointed
      for the Lessee and/or the property thereof, all or in part, and/or the
      business thereof, and the appointment is not revoked within 45 days and/or
      if the Lessee is declared bankrupt, all as the case may
  be.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    21.         Evacuation
of the Rented Premises

    

    
      	
               
      

            	
              a.

            	
              The
      Lessee hereby undertakes to evacuate the rented premises on termination of
      the tenancy period or on the lawful revocation of this agreement, all
      according to whichever is the earlier and according to the matter and to
      return the rented premises to the exclusive possession of the Lessor in
      the same state it was in as on the date of delivery, including the initial
      adaptation works, as it is clean and freshly painted with Tambour
      Supercryl paint (in the same shade as when it received the rented
      premises) and subject to reasonable and accepted
  wear.

            

    

    

    
      	
               
      

            	
              b.

            	
              In
      addition and without derogating from the reliefs and remedies duly granted
      to the Lessor pursuant to the provisions of this agreement and/or the
      provisions of law, the Lessee hereby undertakes that if it fails to
      evacuate the rented premises as aforesaid in section a above, the Lessee
      shall pay the Lessor for each day of delay agreed usage fees, agreed and
      estimated in advance, in the amount of double (twice) the rent owing to
      the Lessor in respect of each day. This sum shall be linked to an index of
      the known index on the date whereon the Lessee was required to vacate the
      rented premises, pursuant to section a above, and until the index that
      shall be known on the date of actual
payment.

            

    

    

    
      	
               
      

            	
              c.

            	
              On
      the evacuation of the rented premises, the Lessee may take with it all
      movable equipment it introduced into the rented premises at its expense,
      which may be dismantled, including the equipment specified in Appendix
      C, which shall be evaluated and attached to this agreement with the
      advance agreement of the parties in writing, if and insofar as it shall be
      attached, and unless it is agreed otherwise, the permanent systems the
      Lessee introduced to the rented premises at its expense, which may be
      dismantled (together hereinafter: “the Equipment”), provided that the
      Lessee shall repair at its expense all that requires repair as a result of
      the aforesaid dismantling activities in order to restore the rented
      premises to the former state at the time of the delivery, as aforesaid in
      section a above. The repairs shall be performed prior to the termination
      of the tenancy period or the revocation thereof, pursuant to this
      agreement, and in accordance with the directives of an engineer on behalf
      of the Lessor and, in any event, without damaging the structure thereof
      and/or systems therein and/or the ongoing activities of the tenants of the
      building. If the Lessee fails to dismantle the equipment or any part
      thereof as aforesaid, the Lessor shall have the right and option to
      dismantle them and remove them or, alternatively, to take possession
      thereof without any duty of paying indemnity and/or compensation and/or
      refund and/or making any payment whatsoever applying thereto. If the
      Lessor demanded the evacuation of the equipment within 7 days of the
      termination of the tenancy period or the revocation thereof and the Lessee
      fails to evacuate the premises, then in order to pay proper usage fees as
      determined in sub-section b above, the Lessee shall be deemed as one who
      has failed to vacate the rented premises as long as the Lessee fails to
      dismantle and remove the equipment from the rented premises and fails to
      adapt the rented premises to the former state thereof as on the date of
      delivery.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    22.         Securities

    

    To ensure
the fulfillment of the Lessee’s undertakings pursuant to this agreement, the
Lessee shall deposit with the Lessor at the time of the signature of this
agreement and as a condition for receiving possession of the rented premises the
following securities:

    

    
      	
               
      

            	
              a.

            	
              An
      automatic unconditional bank guarantee, which may be paid off according to
      first demand and without giving reasons in a shekel amount equivalent to
      ___________________________ U.S. dollars (the value of the rent and
      management fees with the addition of VAT in respect of a period of 6 (six)
      months of rent) (hereinafter: “the Guarantee” or “the Security”) with the
      text as specified in Appendix
      G and subject to the conditions specified herein above and below.
      The guarantee shall be unconditional and not given to endorsement and may
      be forfeited in full or by installments at any time. The guarantee shall
      be linked to the representative rate of the U.S. dollar, as specified in
      the text of the guarantee attached hereto as Appendix G. The validity of
      the guarantee shall be commencing from the date of the signature of this
      agreement, throughout the entire period of the tenancy with the addition
      of 3 more months and the validity thereof shall be renewed periodically, a
      month before the date whereon the validity thereof is intended to expire
      until the conclusion of the additional tenancy period, with the addition
      of 3 months following the termination of the additional tenancy period.
      The guarantee shall be duly stamped. All expenses involved in issuing the
      guarantee shall apply solely to the Lessee. In the event that the
      guarantee is duly forfeited pursuant to this agreement, the Lessee
      undertakes to deposit forthwith, following the forfeiture as aforesaid, an
      additional guarantee with the text and the conditions as stated
      above.

            

    

    

    
      	
               
      

            	
              b.

            	
              Without
      derogating from the remaining provisions of this agreement, the Lessor may
      utilize the security, all or in part, as it opts to do, as
      follows:

            

    

    

    
      	
               
      

            	
              (1)

            	
              In
      the event that the rented premises fail to be evacuated at the required
      time, the Lessor may utilize the security in full or in part and in such
      manner that the funds to be paid shall be deemed, inter alia, as agreed
      compensation, estimated in advance, as determined herein in this
      agreement.

            

    

    

    
      	
               
      

            	
              (2)

            	
              In
      the event of the failure to make a payment that applies pursuant to this
      agreement to the Lessee, the Lessor shall be entitled to utilize the
      security in the amount of the sum of the payment required and together
      with linkage differentials, fines, interest for delay and all other
      expenses of the Lessor.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In the
event that the failure to make a payment constitutes a fundamental breach of the
agreement, the Lessor may utilize the security in the amount of the sum required
or in the amount of agreed compensation pursuant to this agreement, according to
whichever is the higher between them.

    

    
      	
               
      

            	
              (3)

            	
              In
      the event of damage to or loss of the rented premises and/or the contents
      thereof that apply pursuant to this agreement to the Lessee, the Lessor
      shall be entitled to utilize the security in the amount of the sum
      required for the repair thereof, together with 15% handling fees. “Repair”
      shall have the meaning: including
replacement.

            

    

    

    
      	
               
      

            	
              (4)

            	
              In
      order to cover the damages and expenses thereof, in the event of a
      fundamental breach of the
agreement.

            

    

    

    
      	
               
      

            	
              (5)

            	
              In
      order to cover the damages and expenses thereof in the event of a breach,
      which is not a fundamental breach, if such fails to be rectified within 7
      days of the date whereon the Lessor gave written warning
      thereof.

            

    

    

    
      	
               
      

            	
              c.

            	
              Notwithstanding
      the aforesaid in this section 22, it is hereby clarified that the Lessor
      may not utilize the guarantee and/or any other security pursuant to this
      agreement unless subsequent to the delivery of notice thereof of 7 days in
      advance and in writing to the Lessee, during which time the Lessee failed
      to rectify the breach contended by the
Lessor.

            

    

    

    
      	
               
      

            	
              d.

            	
              The
      provision of a security according to this section fails to constitute a
      waiver on the part of the Lessor of the right thereof to other reliefs
      against the Lessee, whether the reliefs are explicitly stated in the body
      of the agreement or whether such are reliefs available to the Lessor by
      virtue of any law.

            

    

    

    
      	
               
      

            	
              e.

            	
              The
      guarantee shall be returned to the Lessee up to three months following
      termination of the tenancy period or following the presentation of all
      documentary proof with respect to the performance of all payments pursuant
      to this agreement by the Lessee – whichever is the earlier of the two
      dates aforesaid.

            

    

    

    23.         Proprietor’s
Custom – Lessor’s Seizure of the Rented Premises

    

    Without
derogating from the validity of the aforesaid herein in this agreement and in
addition to all reliefs and remedies granted to the Lessor pursuant to this
agreement and/or according to any law, the parties hereby agree as
follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              a.

            	
              On
      termination of the tenancy period and/or in any case of the expiration or
      revocation of this agreement, all according to whichever is the earlier,
      the Lessor may act with respect to the rented premises or in any part
      thereof as is customary for
proprietors.

            

    

    

    
      	
               
      

            	
              b.

            	
              If
      the Lessee fails to evacuate the rented premises on termination of the
      tenancy period and/or on the expiration thereof and/or on the revocation
      of this agreement, all according to whichever is the earlier, the Lessee
      shall be deemed as a trespasser of the Lessor’s property in the rented
      premises and in any part thereof, commencing on the date whereon the
      Lessee was required to vacate the rented premises, as aforesaid, until the
      actual evacuation thereof. In such event, as aforesaid, the Lessor,
      subsequent to giving advance written warning of two business days, may and
      is entitled to preclude the Lessee or anyone of the units thereof and/or
      any person on behalf thereof from entering the rented premises and making
      use of the rented premises or any part thereof. For this purpose, the
      Lessor is entitled to and may, inter alia, use
      reasonable force, replace the locks of the rented premises, disconnect
      and/or instruct that the electricity, water, telephone, gas and
      air-conditioning be disconnected and preclude the Lessee’s access and
      entrance, including to the building, and all subject to any
      law.

            

    

    

    24.         Cancelled

    

    25.         Miscellaneous

    

    
      	
               
      

            	
              a.

            	
              The
      titles in this agreement were added solely for the convenience of reading
      and use and fail to instruct with respect to the contents and construal of
      the agreement.

            

    

    

    
      	
               
      

            	
              b.

            	
              The
      appendices attached hereto to this agreement constitute an integral part
      thereof.

            

    

    

    
      	
               
      

            	
              c.

            	
              If
      a party to the agreement, subsequent to providing written early warning of
      7 days to the other party, pays any amount whatsoever, the duty of payment
      whereof applies to the other party effective by the provisions of any law
      or valid by the provisions of this agreement, the party that is obligated
      for the payment shall reimburse the paying party with the amount it paid
      together with interest for delay from the date of payment by the paying
      party until the date of the actual reimbursement by the party owing the
      sum, against the presentation of documentary proof and/or duly issued tax
      invoices with respect to the performance of the payment in practice by the
      paying party.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              d.

            	
              The
      parties choose the city Tel Aviv-Jaffa as the place of exclusive
      jurisdiction for the purposes of the provisions of this
      agreement.

            

    

    

    
      	
               
      

            	
              e.

            	
              Any
      alteration or amendment to or waiver in the agreement or in any condition
      of the conditions thereof shall be made in writing and signed by the
      parties.

            

    

    

    
      	
               
      

            	
              f.

            	
              The
      Lessor’s consent to any divergence from the conditions of the agreement
      shall not serve as a precedent and/or shall not constitute any waiver and
      no analogy shall be learned therefrom to any other
    instance.

            

    

    

    
      	
               
      

            	
              g.

            	
              The
      Lessee hereby declares that it has been explicitly informed that Adv. Dana
      Dotan and/or Adv. Yael Langer and/or Adv. Amit Wengerovitz and/or Adv.
      Sharon Rosenzweig and/or Adv. Hagit Rothstein represent solely the Lessor
      in the agreement and the transaction, subject of this agreement and the
      Lessee may be represented by another
attorney.

            

    

    

    
      	
               
      

            	
              h.

            	
              The
      costs of the stamps for this agreement shall be paid by the party
      requesting that the agreement have
stamps.

            

    

    

    
      	
               
      

            	
              i.

            	
              The
      addresses of the parties for the objectives of the agreement are as
      aforesaid in the Preamble and any notices that are to be delivered
      according to the agreement or in connection thereto shall be in writing
      and shall be delivered by hand or by way of registered mail, according to
      these addresses. Notwithstanding the aforesaid, following the signature of
      this agreement the Lessee’s address shall be the address of the rented
      premises. If a notice is sent by registered mail, it shall be deemed to
      have reached the knowledge and domain of the party being addressed within
      72 hours of the time it was dispatched
thereto.

            

    

    

    
      	
               
      

            	
              j.

            	
              This
      agreement exhausts and faithfully reflects all that has been agreed by the
      parties. No representation and/or undertaking that have not found
      expression herein in this agreement shall have any validity. Any
      representation and/or agreement and/or undertaking that preceded this
      agreement are hereby null and void.

            

    

    

    
      	
               
      

            	
              k.

            	
              Notwithstanding
      all the aforesaid in any other place herein in this agreement, in any
      event, the Lessor and/or the management company shall not be liable,
      pursuant to this agreement, for indirect damages and/or resultant damages,
      save for damages, as aforesaid, that were caused maliciously by the Lessor
      directly.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    In witness whereof we have
signed:

    

    
      
        
          
            	
                    (-)

                  	 
      	
                  
	
                     

                  	 
      	
                    
                      /s/
      YURI SHOSHAN

                    

                  
	
                    Kapps-Pharma
      Ltd.

                  	 
      	
                    Lessee

                  
	 
      	 
      	
                    STAMP:

                  
	 
      	 
      	
                    Bioline
      Innovations Jerusalem

                  
	 
      	 
      	
                    Limited
      Partnership

                  
	 
      	 
      	
                    By
      Its General Partner

                  
	 
      	 
      	
                    Bioline
      Innovations Jerusalem
Ltd.

                  

          

        

      

    

    

    I, the
undersigned, Joeri Kreisberg, attorney for the Lessee, Bioline Innovations
Jerusalem Limited Partnership, hereby authorize that Morris Laster, Aharon Illegible
and Rami Illegible
have signed this agreement in the name of the Lessee and they are approved
signatories to sign this agreement and the signatures thereof on the agreement
obligate the Lessee for all intents and purposes.

    

    
      
        
          	 
      	
                  (-)

                
	 
      	
                   

                
	 
      	
                  Attorney

                
	 
      	 
      
	 
      	
                  STAMP:

                
	 
      	
                  Joeri
      Kreisberg, Adv.

                
	 
      	
                  License
      No. 19903

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    List of
Appendices

    

    
      
        	
                1.

              	
                Appendix
      A:

              	
                Sketch
      of the rented premises and additional areas

              
	 
      	 
      	 
      
	
                2.

              	
                Appendix
      B:

              	
                Schedules

              
	 
      	 
      	 
      
	
                3.

              	
                Appendix
      B1:

              	
                Initial
      adaptation specification works

              
	 
      	 
      	 
      
	
                3.

              	
                Appendix
      C:

              	
                Equipment
      that the Lessee may take with it on termination Of the tenancy
      period

              
	 
      	 
      	 
      
	
                4.

              	
                Appendix
      D:

              	
                Sketch
      of the parking spaces

              
	 
      	 
      	 
      
	
                5.

              	
                Appendix
      E:

              	
                Formula
      for the calculation of air-conditioning electricity consumption in the
      rented premises

              
	 
      	 
      	 
      
	
                6.

              	
                Appendix
      E1:

              	
                Formula
      for the calculation of expenses in respect of particularly high-powered
      air-conditioning for the Old Wing Area

              
	 
      	 
      	 
      
	
                6.

              	
                Appendix
      F:

              	
                Authorization
      of insurance for the rented premises

              
	 
      	 
      	 
      
	
                7.

              	
                Appendix
      F1:

              	
                Authorization
      of insurance of the works

              
	 
      	 
      	 
      
	
                8.

              	
                Appendix
      G:

              	
                Text
      of the bank guarantee

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