Document:

www.EXFILE.com 888.775-4789  --  DATAWATCH CORPORATION -- FORM 8K  EXHIBIT 10.1

    EXHIBIT
      10.1

    MANAGEMENT
      CONSULTING AGREEMENT

     

    This
      Management Consulting Agreement (the “Agreement”) is made as of October 22,
      2007, by and between Robert W. Hagger (“Hagger”) and Datawatch
      Corporation (the “Company”).

    

    WHEREAS,
      Hagger is the
      President and Chief Executive Officer (the “CEO”) of the Company;
      and

    

    WHEREAS,
      the Company and Hagger desire to provide for consulting services relating to
      the
      transition from Hagger to the Company’s newly elected President and CEO (the
“New CEO”) effective January 1, 2008;

     

    NOW,
      THEREFORE, in consideration of the foregoing and the agreements herein
      contained, and intending to be legally bound, the parties hereby agree as
      follows:

     

    1.  Continuation
      as CEO.  Hagger agrees to continue to serve as the CEO of the
      Company from the date of this Agreement until December 31, 2007 (the “Interim
      Period”), unless earlier terminated as specified in Section 5.  During
      this period, Hagger shall devote substantially all of his business time,
      attention and energies to the Company’s business and shall not engage in any
      other business activity without the Board of Directors’ approval.  As
      of January 1, 2008, or earlier, upon either the termination of Hagger’s
      employment by the Company without Cause (as defined herein) or by Hagger for
      Good Reason (as defined herein), the Company will reimburse Hagger for
      relocation expenses in connection with his relocation to Europe in accordance
      with the Company’s relocation policy, in an amount not to exceed
      $30,000.  The date of January 1, 2008 is referred to herein as the
“Transition Date.”

     

    2.  Consulting
      Services.  Unless the relationship is earlier terminated as
      provided in Section 6 hereof, for a period of 12 months after the Transition
      Date (the “Consulting Period”), Hagger or, at his option, a corporation or other
      entity of which Hagger is an employee or principal (the “Consulting Company”)
      (Hagger or the Consulting Company, as the case may be, in their role as
      consultant each are hereinafter referred to as the “Consultant”), will provide
      consulting services to the Company as provided herein.  Consultant
      will be available as reasonably requested by the Company, to provide such
      services and duties as the Company reasonably requests, with respect to
      training, advice and assistance to the Company and the New CEO in the transition
      to the position of Chief Executive Officer for the Company.  The
      issues on which Consultant may be requested to provide training, advice and
      assistance include SEC rules, regulations, filings and compliance, investor
      relations, banking facilities, the status of customer contracts and general
      business advice.  Consultant will determine his own hours and method
      of performing the consulting services; he may perform the services from any
      location; he will generally use his own tools and equipment; and he will not
      be
      supervised or controlled in the performance of his tasks by the
      Company.  Consultant agrees to perform his consulting services well
      and faithfully and to the best of his ability.  Consultant agrees to
      take no action prejudicial to the interests of the Company during the Consulting
      Period.

     

    3.  Consulting
      Fee.  As compensation for the provision of consulting services
      hereunder, the Company shall pay a consulting fee to Consultant during the
      Consulting Period on a monthly basis at the rate of $25,000 per
      month.  In addition, Consultant will be reimbursed by the Company for
      all reasonable and properly documented expenses incurred in connection with
      providing the consulting services, subject to the approval of the New CEO and
      in
      accordance with the Company’s expense reimbursement policies.  Other
      than as set forth in this Agreement or as otherwise required by law, neither
      Hagger nor the Consultant will be entitled to any other benefit or compensation
      in connection with the termination of Hagger’s employment by the Company or the
      performance of the consulting services hereunder.

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.  Independent
      Contractor Relationship.  The parties expressly understand and
      agree that, during the Consulting Period, Consultant’s status in relation to the
      Company will be that of an independent contractor, and that neither this
      Agreement nor the services to be rendered hereunder by Consultant will for
      any
      purpose whatsoever create an employment relationship between the
      parties.  Consultant will have exclusive responsibility for payment of
      all federal, state, and local income taxes, as well as all unemployment and
      disability insurance, social security, and other taxes, applicable to the
      compensation to be provided to him hereunder by the
      Company.  Consultant acknowledges that he will not receive any
      employee benefits from the Company, and that, as an independent contractor,
      Consultant will have exclusive responsibility to obtain and make payment for
      health insurance, life insurance, and any other benefits that he wishes to
      receive.  Further, Consultant agrees that, except as specifically
      authorized by the Company, he will not seek to bind the Company under any
      contract or other obligation.

     

    5.  Termination
      of Employment. During the Interim Period, Hagger’s employment may be
      terminated at any time by the Company, either with or without Cause (as defined
      herein), or by Hagger, either with or without Good Reason (as defined
      herein).  In the event of the termination of Hagger’s employment by
      the Company for Cause, Hagger’s resignation from employment without Good Reason,
      or his death or Disability (as defined herein), in each case prior to the
      commencement of the Consulting Period, this Agreement shall immediately and
      automatically terminate and the Company shall have no further obligations to
      Hagger hereunder.  For purposes of this Agreement, “Cause”
shall mean Hagger (i) engaging in willful and repeated gross negligence
      or gross
      misconduct, (ii) breaching a material fiduciary duty to the Company or
      (iii) being convicted of a felony, in any such case, to the demonstrable and
      material injury to the Company.  For purposes hereof, no act, or
      failure to act, on Hagger’s part, shall be deemed “willful” unless done, or
      omitted to be done, by Hagger not in good faith and without reasonable belief
      that any act or omission was in the best interest of the Company.  For
      purposes of this Agreement, Hagger’s termination of his employment by the
      Company will be considered for “Good Reason” if he terminates upon the
      occurrence of any one or more of the following events:  (i) a
      reduction in his base salary; (ii) a substantial reduction in his benefits
      without a similar reduction of the benefits of the other executive officers
      of
      the Company; or (iii) without his express written consent, his assignment
      to duties substantially inconsistent with his current position with the Company
      or a substantial reduction in his duties other than in connection with the
      employment of the New CEO.  For the purposes of this Agreement,
“Disability” shall mean any physical incapacity or mental incompetence
      (i) as a result of which Hagger is unable to perform the essential functions
      of
      his position as CEO for an aggregate of 90 days, whether or not
      consecutive, during any calendar year, and (ii) which cannot be reasonably
      accommodated by the Company without undue hardship.

     

    6.  Termination
      of Consulting Arrangement.  In the event, after the commencement
      of the Consulting Period, of the Consultant’s material breach of any term of
      this Agreement, or Hagger’s death or Disability (as defined herein), this
      Agreement shall immediately and automatically terminate and the Company shall
      have no further obligations to the Consultant.

     

    7.  Other
      Agreements.  Hagger understands and agrees that he remains subject
      to the Proprietary Information and Inventions Agreement, dated August 21, 2001,
      which remains in full force and effect.  The parties agree that the
      Employment Agreement between the Company and Hagger dated as of July 9, 2001
      has
      expired by its terms and that all provisions of the Employment Agreement,
      including without limitation the provisions relating to the payment of severance
      to Hagger in the event of the termination of his employment after the
      termination of the Employment Agreement, are terminated and are of no further
      force and effect.

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.  Conflicting
      Agreements.  Hagger hereby warrants that the execution of this
      Agreement and the performance of his obligations hereunder will not breach
      or be
      in conflict with any other agreement to which or by which Hagger is a party
      or
      is bound and that Hagger is not now subject to and will not enter into any
      agreement, including, without limitation, any covenants against competition
      or
      similar covenants that would affect the performance of his obligations
      hereunder.

     

    9.  Withholding;
      Taxes.  All payments made by the Company under this Agreement
      shall be subject to and reduced by any federal, state and/or local taxes or
      other amounts required to be withheld by the Company under any applicable
      law.

     

    10.  Miscellaneous.

     

    10.1.           Assignment.  Except
      as provided in Section 2 hereof with respect to the Consulting Company, Hagger
      shall not assign this Agreement or any interest herein.  The Company
      may assign this Agreement in connection with the sale of the Company or the
      sale
      of substantially all of the Company’s assets.  This Agreement shall
      inure to the benefit of the Company and shall be binding upon the Company and
      Hagger and their respective successors, executors, administrators, heirs and
      permitted assigns.

     

    10.2.           Severability.  If
      any portion or provision of this Agreement shall to any extent be declared
      illegal or unenforceable by a court of competent jurisdiction, then the
      application of such provision in such circumstances shall be modified to permit
      its enforcement to the maximum extent permitted by law, and both the application
      of such portion or provision in circumstances other than those as to which
      it is
      so declared illegal or unenforceable and the remainder of this Agreement shall
      not be affected thereby, and each portion and provision of this Agreement shall
      be valid and enforceable to the fullest extent permitted by law.

     

    10.3.           Waiver;
      Amendment.  No waiver of any provision hereof shall be effective
      unless made in writing and signed by the waiving party.  The failure
      of the Company to require the performance of any term or obligation of this
      Agreement, or the waiver by the Company of any breach of this Agreement, shall
      not prevent any subsequent enforcement of such term or obligation or be deemed
      a
      waiver of any subsequent breach.  This Agreement may be amended or
      modified only by a written instrument signed by Hagger and another officer
      of
      the Company authorized by the Board of Directors.

     

    10.4.           Notices.  All
      notices, requests and other communications provided for by this Agreement shall
      be in writing and shall be effective when delivered in person or three (3)
      business days after being deposited in the mail of the United States, postage
      prepaid, registered or certified, and addressed (a) in the case of Hagger,
      to the address set forth underneath his signature to this Agreement, or
      (b) in the case of the Company, to the attention of the Chairman of the
      Board at 271 Mill Road, Quorum Office Park, Chelmsford, MA 01824, and/or to
      such
      other address as either party may specify by notice to the other.

     

    10.5.           Entire
      Agreement.  This Agreement and the Proprietary Information and
      Inventions Agreement constitute the entire agreement between the Company and
      Hagger with respect to the terms and conditions of Hagger's employment with
      the
      Company and supersede all prior communications, agreements and understandings,
      written or oral, between them.

     

    10.6.           Counterparts.  This
      Agreement may be executed in counterparts, each of which shall be original
      and
      all of which together shall constitute one and the same instrument.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.7.           Governing
      Law.  This Agreement, the relationships contemplated herein and
      any claim arising from such relationships, whether or not arising under this
      Agreement, shall be governed by and construed in accordance with the internal
      laws of the Commonwealth of Massachusetts without giving effect to any choice
      or
      conflict of laws provision or rule thereof.

     

    10.8.           Consent
      to Jurisdiction.  Each of the Company and Hagger, by its or his
      execution hereof, hereby irrevocably submits to the exclusive jurisdiction
      of
      the state or federal courts of the Commonwealth of Massachusetts for the purpose
      of any claim or action arising out of or based upon this Agreement, Hagger’s
      employment with the Company and/or the termination thereof, the consulting
      relationship contemplated herein and/or the termination thereof, or relating
      in
      any other manner to the subject matter hereof, and agrees not to commence any
      such claim or action other than in the above-named courts.

     

    IN
      WITNESS WHEREOF, this Agreement has been executed by the Company, by
      its duly authorized representative, and by Hagger, as of the date first above
      written.

     

     

     

    
      	 	
              DATAWATCH
                CORPORATION

            	 
	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

    

     

     

     

     

    
       

      
        	 	
                ROBERT
                  W. HAGGER

              	 
	 	 	 
	 	 	 	 
	
                 

              	
                By:
                  

              	 	 
	 	
              	 	 
	 	Address:WWW.EXFILE.COM, INC. -- CELL KINETICS LTD. -- EXHIBIT 10.5 TO FORM F-1/A

    EXHIBIT
      10.5

     

    
      

      

    

     

     

     

     

     

    SUPPLEMENTARY
      FUNDING AGREEMENT

     

    By
      and
      between

    Scorpion
      Surgical Technologies Ltd.

    &

    Cell
      Kinetics Ltd.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    July
      26,
      2007

     

     

     

     

     

     

    
      

      

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    SUPPLEMENTARY
      FUNDING AGREEMENT

     

    TABLE
      OF CONTENTS

     

                                   

     

     

    
      
        	Schedule	Name	
                Tab

              
	 	 	 
	 	
                Supplementary
                  Funding Agreement

              	
                1

              
	 	 	 
	
                Schedule A

              	
                Approved
                  Budget

              	
                2

              
	 	 	 
	
                Schedule B

              	
                Post-Investment
                  Capitalization Table

              	
                3

              
	 	 	 
	
                Schedule C

              	
                Investment
                  Schedule And Milestones

              	
                4

              
	 	 	 
	
                Schedule
                  1.4.1

              	
                Board
                  Resolution and Shareholders Resolution

              	
                5

              
	 	 	 
	
                Schedule
                  1.4.2

              	
                Participation
                  Rights Waivers

              	
                6

              
	 	 	 
	
                Schedule
                  1.4.3

              	
                Expandis
                  Waiver

              	
                7

              
	 	 	 
	
                Schedule
                  1.4.4

              	
                Addendum
                  To Founders Agreement

              	
                8

              
	 	 	 
	
                Schedule
                  1.4.5

              	
                New
                  Articles Of Association

              	
                9

              
	 	 	 
	
                Schedule
                  1.4.6

              	
                Share
                  Certificates And Shareholders Ledger

              	
                10

              
	 	 	 
	
                Schedule
                  1.4.7

              	
                Compliance
                  Certificate

              	
                11

              
	 	 	 
	
                Schedule
                  1.4.8

              	
                Notice
                  To The Registrar Of Companies

              	
                12

              
	 	 	 
	
                Schedule
                  1.4.9

              	
                IP
                  ASSIGNMENT

              	
                13

              
	 	 	 
	
                Schedule
                  4

              	
                Disclosure
                  Schedule 

              	
                14

              

      

    

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SUPPLEMENTARY
      FUNDING AGREEMENT

     

    This
      Supplementary Funding Agreement (the “Agreement”) is made as of
      this 26 day of July, 2007, by and between SCORPION SURGICAL TECHNOLOGIES
      LTD., an Israeli company (company number 51-396950-1) with a business
      address at D.N. Misgav, 20179, Israel (the “Company”), and
Cell Kinetics Ltd., a private Israeli company (51-323862-6)
      from Lod, Israel (the “Investor”).

     

    
      	
              WHEREAS,

            	
              The
                Company is a seed-stage company engaged in research and development
                in the
                field of curved spinal fixation implants (the “Field”),
                and is currently operating within the framework of The Incubator
                For
                Managing Technology Entrepreneurship Misgav Ltd. (the
                “Incubator”); and

            

    

     

    
      	
              WHEREAS,

            	
              The
                Company has received funding from the Office of the Chief Scientist
                in the
                Ministry of Industry, Trade and Labor (“OCS”) to carry
                out a research and development program within the Incubator (the
                “Program”) in accordance with the approved project budget
                attached hereto as Schedule A (the
                “Approved Budget”);
                and

            

    

     

    
      	
              WHEREAS,

            	
              As
                a pre-condition to OCS funding of the Program, the Company must obtain
                additional financing from a supplementary investor covering at least
                15%
                of the Approved Budget (the “Supplementary Funding”);
                and

            

    

     

    
      	
              WHEREAS,

            	
              The
                Investor is willing to provide the Investment Amount to the Company
                on the
                terms and conditions set forth in this Agreement in exchange for
                an
                issuance of shares of the Company as set forth
                below.

            

    

     

    NOW,
      THEREFORE, in consideration of their mutual covenants herein contained, the
      parties hereby agree as follows:

     

    
      	
              1.

            	
              THE
                SUPPLEMENTARY FUNDING
                TRANSACTION.

            

    

     

    
      	
               

            	
              1.1.

            	
              General.  The
                Investor will invest the aggregate amount of $150,000 (the
                “Investment Amount”) in the Company, subject to certain
                milestones as more fully described below, in consideration for the
                issuance to the Investor of such number of ordinary shares of the
                Company,
                par value NIS 0.1 each (“Ordinary Shares”) as specified
                in
Schedule C.

            

    

     

    
      	
               

            	
              1.2.

            	
              The
                Investment Payment.  The Investment Amount shall be
                paid by the Investor to the Company in 3 (three) equal installments
                (the “Milestone Payments”) subject to the fulfillment of
                certain milestones, all as described in
                Schedule C.

            

    

     

    Each
      Milestone Payment shall be made by wire transfer or check deposit to the
      Company’s bank account, the particulars of which are as follows:  Bank
      Leumi, Karmiel Branch (961) Acct. #191600/48, or by such other form of
      payment as is mutually agreed by the Company and the Investor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              1.3.

            	
              Issuance
                of Shares.  Upon each Milestone Payment and as a
                condition thereto, the Company shall issue and allot to the Investor
                such
                number of Ordinary Shares set forth in
                Schedule C, adding up to a total of 20,000
                Ordinary Shares (the “Purchased Shares”), which shall
                comprise 20% of the issued and outstanding share capital of the Company
                on
                a fully-diluted basis, following investment, based on the capitalization
                table as of this date
                (Schedule B).

            

    

     

    
      	
               

            	
              1.4.

            	
              Conditions
                Precedent – First Payment.  The transfer of the
                first Milestone Payment shall be subject to the following conditions
                precedents of the Investor:

            

    

     

    
      	
               

            	
                             
                1.4.1.

            	
              Board
                of Directors Resolutions and Shareholders
                Resolutions.  The Company shall deliver to the
                Investor the Company’s Board resolutions in the form attached hereto as
                Schedule 1.4.1A, (i) approving the Company’s
                execution and performance of this Agreement, and the transactions
                contemplated hereby, including issuing and selling the Purchased
                Shares to
                the Investor against payment of the Investment Amount pursuant to
                the
                provisions set forth in this Agreement, (ii) reserving 10,000 Ordinary
                Shares for issuance to employees, consultants and others under an
                Employees Stock Option Plan to be adopted by the Company (the
                “Plan”), which shares shall constitute 10.00% of the
                Company’s share capital on a fully diluted basis, immediately following
                the issuance of all shares issuable hereunder (without taking into
                account
                any additional issuances between the first payment hereunder and
                the last
                payment hereunder) and (iii) approving the New Articles of Association
                in
                the form attached hereto as
                Schedule 1.4.5.

            

    

     

    The
      Company shall deliver to the Investor the Company’s Shareholders resolutions in
      the form attached hereto as Schedule 1.4.1B,
      approving (a) the Company’s execution and performance of this Agreement, and the
      transactions contemplated hereby, including issuing and selling the Purchased
      Shares to the Investor against payment of the Investment Amount pursuant to
      the
      provisions set forth in this Agreement, and (b) approving the New Articles
      of
      Association in the form attached hereto as
Schedule 1.4.5.

     

    
      	
               

            	
                             
                1.4.2.

            	
              Waivers/Termination
                and Release of any Participation Rights.  The
                Company shall deliver to the Investor a letter in the form attached
                hereto
                as Schedule 1.4.2, signed by
                

            

      	 	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	each
              shareholder of the Company holding preemptive rights or any similar
              rights, by virtue of which such shareholder may be entitled to purchase
              or
              receive securities of the Company upon the consummation of the
              transactions contemplated herein, including the rights granted to TIF
              according to section 6.2 of the Founders Agreement (collectively,
              “Participation Rights”), pursuant to which he, she or it
              has waived such Participation Rights with respect to all of the
              transactions contemplated by this Agreement, including the Right of
              First
              Refusal granted to the Investor according to Section 2.3
              below.

    

     

    
      	
               

            	
                             
                1.4.3.

            	
              Expandis’
                Waiver.  The Company shall deliver to the Investor
                a certificate in the form attached hereto as
                Schedule 1.4.3, signed by Expandis Ltd.
                (“Expandis”), pursuant to which Expandis waives any
                rights and/or claim which they may have in connection with any proprietary
                rights  related to the Field and/or necessary to enable the
                Company to carry on its business

            

    

     

    
      	
               

            	
                             
                1.4.4.

            	
              Addendum
                to Founders’ Agreement.  The Company shall deliver
                to the Investor an addendum to the Founders Agreement in the form
                attached
                hereto as
                Schedule 1.4.4.

            

    

     

    
      	
               

            	
                             
                1.4.5.

            	
              Adoption
                of New Articles of Association.  The Company shall
                adopt new Articles of Association in the form attached hereto as
                Schedule 1.4.5, which will reflect the
                provisions of the Founders Agreement and this
                Agreement.

            

    

     

    
      	
               

            	
                             
                1.4.6.

            	
              Share
                Certificates and Registration.  Simultaneously upon
                the payment of first Milestone Payment, the Company shall deliver
                to the
                Investor a duly executed and valid share certificate in the name
                of the
                Investor representing the Ordinary Shares being issued to the Investor
                with respect to the first Milestone, in the form attached hereto
                as
                Schedule 1.4.6.  The Company shall
                register the allotment of all such Ordinary Shares issued to the
                Investors
                upon payment of the first  Milestone Payment in the Company’s
                Shareholders Register and shall deliver a copy of the Shareholders
                Register to the Investor.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
                             
                1.4.7.

            	
              Compliance
                Certificate.  The Company shall deliver to the
                Investor a certificate (substantially in the form attached hereto
                as
                Schedule 1.4.7) duly executed on behalf of
                the Company by a director of the Company, and dated as of the first
                Milestone Payment date.

            

    

     

    
      	
               

            	
                             
                1.4.8.

            	
              Notice
                to the Registrar of Companies.  The Company shall
                deliver to the Investor a copy of the notice to be sent to the Israeli
                Registrar of Companies of the issuance of the Ordinary Shares issueable
                upon the payment of the first Milestone Payment under this
                Agreement.

            

    

     

    
      	
               

            	
                             
                1.4.9.

            	
              IP
                Assignment.  Asaf Ben Arye and Yuval Shazifi shall
                sign the IP Assignment Undertaking attached hereto as Schedule
                1.4.9, to the extant that any such Entrepreneur contributed
                to the Intellectual Property of the
                Company.

            

    

     

    
      	
               

            	
              1.5.

            	
              Conditions
                Precedent – Second and Third Milestone
                Payments.  The transfer of each of the remaining
                Milestone Payment shall be subject to the following conditions precedents
                of the Investor:

            

    

     

    
      	
               

            	
                             
                1.5.1

            	
              Share
                Certificates and Registration.  Simultaneously upon
                the payment of the relevant Milestone Payment, the Company shall
                deliver
                to the Investor a duly executed and valid share certificate in the
                name of
                the Investor representing the Ordinary Shares being issued to the
                Investor
                upon each Milestone Payment, in the form attached hereto as
                Schedule 1.4.6.  The Company shall
                register the allotment of all of the Ordinary Shares issued to the
                Investors upon each Milestone Payment in the Company’s Shareholders
                Register and shall deliver a copy of the Shareholders Register to
                the
                Investor.

            

    

     

    
      	
               

            	
                             
                1.5.2.

            	
              Compliance
                Certificate.  The Company shall deliver to the
                Investor a certificate (substantially in the form attached hereto
                as
                Schedule 1.4.7) duly executed on behalf of
                the Company by a director of the Company, and dated as of the relevant
                Milestone Payment date.

            

    

     

    
      	
               

            	
                             
                1.5.3.

            	
              Notice
                to the Registrar of Companies.  The Company shall
                deliver to the Investor a copy of the notice to be sent to the Israeli
                Registrar of Companies of the issuance of the Ordinary Shares issueable
                upon the payment of each additional Milestone Payment under this
                Agreement.

            

    

     

    
      	
               

            	
                             
                1.5.4.

            	
              MAC
                Certificate.  A certificate executed by a director
                of the Company dated as of the date of the relevant Milestone Payment,
                certifying that since the date of the Agreement, there has been no
                material adverse change in the business, assets, liabilities, operation
                or
                condition (financial or otherwise) of the Company, other than changes
                in
                the ordinary course of business, which when taken together have a
                material
                adverse effect on the Company’s financial position or results of
                operations.

            

    

     

    
      	
               

            	
                             
                1.5.5.

            	
              Legal
                Opinion.  Legal opinion to Investor’s reasonable
                satisfactory that there are no patent or other claims that would
                or may
                reasonably be expected to interfere or adversely affect the business
                of
                the Company as concluded or supposed to be concluded as of the date
                of the
                opinion.

            

    

     

    
      	
              2.

            	
              RIGHTS
                AND OBLIGATIONS OF THE
                INVESTOR.

            

    

     

    
      	
               

            	
              2.1.

            	
              In
                the event of an inconsistency between the terms of this Agreement
                and the
                Founders Agreement, the terms of this Agreement shall
                prevail.  Board of
                Directors.

            

    

     

    
      	
               

            	
                             
                2.1.1.

            	
              Composition.  The
                Board of Directors of the Company shall consist of up to six (6)
                directors
                to be appointed as follows:

            

    

     

    
      	
               

            	
              (a)

            	
              One (1)
                director shall be appointed by the
                Incubator;

            

    

     

    
      	
               

            	
              (b)

            	
              One (1)
                director be appointed by TIF;

            

    

     

    
      	
               

            	
              (c)

            	
              Two
                directors shall be appointed by the Entrepreneurs;
                and

            

    

     

    
      	
               

            	
              (d)

            	
              The
                Investor will have the right to appoint one (1) director to the
                Company’s Board of Directors until the later of:  (a) its
                shareholding percentage in the Company falls below 10% or (b) the
                Company ceases to work within the framework of the
                Incubator.

            

    

     

    
      	
               

            	
              (e)

            	
              One
                external director appointed by agreement of the remaining
                directors.

            

    

     

    
      	
               

            	
                             
                2.1.2.

            	
              Quorum.  The
                presence of a majority of directors, including at least one director
                appointed by the Incubator or TIF, one director appointed by the
                Entrepreneurs and the director appointed by the Investor, shall constitute
                a quorum for meeting of the Board.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              2.2.

            	
              Negative
                Covenants.  Following the second transfer of a
                Milestone Payment by the Investor to the Company, and until any of
                the
                following occur (i) the Company ceases to work within the framework
                of the Incubator, (ii) March 31,2009 or (iii) the
                Investor’s share of the Company, on a fully-diluted basis, falls below
                10%; any Board decision regarding one of the following issues, shall
                require the consent of the director appointed by the
                Investor.  The New Articles of Association shall be amended in
                accordance with this section.

            

    

     

    
      	
               

            	
                             
                2.2.1.

            	
              Any
                issuance of shares, options to purchase shares or any other securities
                of
                the Company at a price per share lower than the price per share payable
                by
                the Investor hereunder;

            

    

     

    
      	
               

            	
                             
                2.2.2.

            	
              Any
                adoption, amendment or modification of the
                ESOP;

            

    

     

    
      	
               

            	
                             
                2.2.3.

            	
              The
                approval of any material transaction of the Company or any transaction
                out
                of the ordinary course of business;

            

    

     

    
      	
               

            	
                             
                2.2.4.

            	
              Any
                transaction with an interested party, as defined in the Securities
                Law of
                1968;

            

    

     

    
      	
               

            	
                             
                2.2.5.

            	
              Approval
                of the annual budget of the Company and/or effects any deviation
                therefrom;

            

    

     

    
      	
               

            	
                             
                2.2.6.

            	
              Incurrence,
                assumption, or creation of any indebtedness for borrowed money in
                excess
                of NIS 50,000 per annum, or guaranteed any indebtedness for borrowed
                money
                of any other person, or capital contribution to or investment in
                any
                person.

            

    

     

    
      	
               

            	
              2.3.

            	
              Right
                of First Refusal with respect to the next
                round.  In the event that, during the 24 month
                period commencing on the Effective Date, the Company shall decide
                to raise
                additional funds through issuance of any type of securities of the
                Company, then, it shall give the Investor a written notice of its
                intention to do so (the “Rights Notice”), describing the
                securities, the price and the general terms upon which the Company
                proposes to issue them.  The Investor shall have ten (10)
                business days from delivery of the Rights Notice to agree to purchase
                up
                to 75% of such securities, for the price and upon the terms specified
                in
                the Rights Notice, except that, the price-per-share payable by
                the Investor shall be calculated according to a pre-money valuation
                which
                is the lower of:  (i) the pre-money valuation set forth in a
                bona fide offer made to the Company by a third party, as shall be
                set
                forth in a certificate signed by the Company’s Board of Directors, or (ii)
                US$3,500,000 (three million five hundred United States
                dollars).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              2.4.

            	
              Information
                Rights.  The Company shall deliver to the
                Investor,

            

    

     

    
      	
               

            	
                             
                2.4.1.

            	
              as
                soon as practicable, but in any event within sixty (60) days after
                the end of each fiscal year of the Company, a consolidated balance
                sheet
                of the Company as of the end of such year, and statements of income
                and
                statements of cash flow of the Company for such year, and statements
                of
                shareholders equity, setting forth in each case in comparative form
                the
                figures for the previous fiscal year, all in reasonable detail, United
                States dollar-denominated, prepared in accordance with Israeli generally
                accepted accounting principles (“GAAP”), audited by a firm of
                Independent Certified Public Accountants in the State of Israel who
                are
                members of the Israeli Institute of Certified Public Accountants,
                and
                accompanied by an opinion of such firm which opinion shall state
                that such
                balance sheet, statements of income and cash flow and statements
                of
                shareholders equity have been prepared in accordance with GAAP applied
                on
                a basis consistent with that of the preceding fiscal year, and present
                fairly and accurately the financial position of the Company as of
                their
                date, and that the audit by such accountants in connection with such
                financial statements has been made in accordance with generally accepted
                auditing standards; In addition, the Company will provide the Investor
                with all information and certifications required in light of Investor’s or
                the Investors’ affiliates’ status as a publicly traded company and in the
                timeframes required as a result of such
                status.

            

    

     

    
      	
               

            	
                             
                2.4.2.

            	
              As
                long as the Investor’s share of the Company, on a fully-diluted basis,
                does not fall below 10%, the Company shall deliver to the Investor,
                as
                soon as practicable, but in any event within thirty (30) days after
                the
                end of each quarter of each fiscal year of the Company, an unaudited
                consolidated balance sheet of the Company as at the end of each such
                period and unaudited consolidated statements of (i) income and
                (ii) cash flow of the Company for such period and, in the case of the
                first, second and third quarterly periods, for the period from the
                beginning of the current fiscal year to the end of such quarterly
                period,
                setting forth in each case in comparative form the figures for the
                corresponding period of the previous fiscal year, all in reasonable
                detail, United States dollar-denominated.  In addition, the
                Company will provide the Investor with all information and certifications
                required in light of Investor’s or the Investors’ affiliates’ status as a
                publicly traded company and in the timeframes required as a result
                of such
                status.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
                             
                2.4.3.

            	
              Additional
                Information.  As long as the Investor’s share of
                the Company, on a fully-diluted basis, does not fall below 10%, the
                Company shall deliver to the Investor, the Company will permit the
                authorized representative of the Investor full and free access, at
                all
                reasonable times, and upon reasonable notice, to any of the properties
                of
                the Company, including its books and records, and to discuss its
                affairs,
                finances and accounts with the Company’s officers and auditor, for any
                purpose whatsoever.  In addition, the Company will deliver to
                the Investor with reasonable promptness, such other information and
                data
                with respect to the Company, as the Investor may from time to time
                reasonably request.  In addition, the Company will provide the
                Investor with all information and certifications required in light
                of
                Investor’s or the Investors’ affiliates’ status as a publicly traded
                company and in the timeframes required as a result of such
                status.

            

    

     

    This
      Section 2.4 shall not be in limitation of any rights, which the Investor or
      the director designated by the Investor, may have under applicable
      law.

     

    In
      addition, and not as a limitation on any of the foregoing, the Company covenants
      that it will provide full disclosure and information regarding all of the
      Company’s material affairs at meetings of the Company’s Board of Directors and,
      to the extent required under applicable law, at annual general meetings of
      the
      shareholders, and extraordinary general meetings of the
      shareholders.

     

    
      	
              3.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE
                INVESTOR.

            

    

     

    Investor
      hereby represents and warrants to the Company as follows:

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              3.1.

            	
              Authority.  The
                Investor has the full power and authority to execute, deliver and
                perform
                this Agreement and the Schedules hereto, the obligations of the Investor
                hereunder have been duly authorized by all necessary corporate action,
                and
                this Agreement and all Schedules hereto, when executed by the Investor,
                will constitute valid and legally binding obligations of such
                Investor.

            

    

     

    
      	
               

            	
              3.2.

            	
              Purchase
                Entirely for Own Account.  This Agreement is made
                with the Investor in reliance upon such Investor’s representation to the
                Company, which by Investor’s execution of this Agreement such Investor
                hereby confirms, that the Purchased Shares will be acquired for investment
                for Investor’s own account, not as a nominee or agent, and not with a view
                to the resale or distribution of any part thereof, and that the Investor
                has no present intention of selling, granting any participation in,
                or
                otherwise distributing the same.

            

    

     

    
      	
               

            	
              3.3.

            	
              Investment
                Experience.  The Investor is knowledgeable and
                experienced in business and financial matters, and therefore it is
                capable
                of evaluating the merits and risks of an investment in the Company
                and has
                the capacity to protect its own interests in connection with the
                transactions contemplated by this Agreement.  The Investor
                acknowledges that the issuance of Purchased Shares hereunder does
                not
                constitute a promise or guaranty by the Company, its shareholders,
                officers or directors as to the financial, technological or commercial
                success of the Company or the future value of its
                shares.

            

    

     

    
      	
               

            	
              3.4.

            	
              Consideration
                of Risks.  The Investor confirms that it has fully
                considered the risks of the contemplated investment in the Company
                and
                understands that (i) this investment is suitable only for an investor
                who is able to bear the economic consequences of losing its investment,
                (ii) the purchase of the Purchased Shares is a speculative investment
                which involves a high degree of risk, and (iii) there are substantial
                restrictions on the transferability of, and there will be no immediate
                public market for the Purchased Shares, and no guarantee that such
                market
                will exist in the future, and accordingly, it may not be possible
                for the
                Investor to liquidate its investment in case of
                emergency.  Moreover, the Investor acknowledges that due to the
                inherent risk involved in such investment, the Investor’s investment may
                be substantially or totally lost.

            

    

     

    
      	
               

            	
              3.5.

            	
              Brokers.  No
                agent, broker, investment banker, person or firm acting in a similar
                capacity on behalf of or under the authority of the Investor is or
                will be
                entitled to any broker’s or finder’s fee or any other commission or
                similar fee, directly or indirectly, on account of any action taken
                by the
                Investor in connection with any of the transactions contemplated
                under
                this Agreement.  The Investor agrees to indemnify and hold the
                Company harmless from and against any claim or liability resulting
                from
                any party claiming any such commission or fee, if such claims shall
                be
                contrary to the foregoing
                statement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              3.6.

            	
              Disclosure
                of Information.  The Investor represents that it
                has had an opportunity to ask questions and receive answers from
                the
                Company regarding the terms and conditions of the offering of the
                Purchased Shares, and the business, affairs, properties, prospects
                and
                financial condition of the Company.

            

    

     

    
      	
              4.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE
                COMPANY.

            

    

     

    The
      Company hereby represents and warrants to the Investor as follows, and
      acknowledges that the Investor is entering into this Agreement in reliance
      thereon:

     

    
      	
               

            	
              4.1.

            	
              Founders
                Agreement.  The Company hereby represents and
                warrants to the Investor that the various representations and warranties
                made by it under the Founders Agreement shall be incorporated, mutatis
                mutandis, into this Agreement, as though such representations and
                warranties had been made directly to the Investor pursuant to this
                Agreement.

            

    

     

    
      	
               

            	
              4.2.

            	
              Incorporation;
                Authority.  The Company is a corporation duly
                incorporated and validly existing under the laws of the State of
                Israel
                and has corporate power to own or lease its property and to carry
                on its
                business as now conducted and as proposed to be conducted.  The
                Company has obtained all necessary corporate authorizations and approvals
                to carry out its business as now conducted and as currently proposed
                to be
                conducted.  The Articles of Association of the Company, as
                currently in effect, are attached hereto as
                Schedule 4.2 (the “Corporate
                Documents”).

            

    

     

    
      	
               

            	
              4.3.

            	
              Authorization.  All
                corporate action on the part of the Company, its officers, directors
                and
                shareholders necessary for the authorization, execution and delivery
                of
                this Agreement, the performance of all obligations of the Company
                hereunder and the authorization, issuance, sale and delivery of the
                Purchased Shares has been taken.

            

    

     

    
      	
               

            	
              4.4.

            	
              Governmental
                or Third Party Consents.  Except as otherwise
                detailed in Schedule 4.4, the Company does
                not need to give any notice to, make any filing with, or obtain any
                authorization, consent, qualification, order or approval from any
                governmental authority or agency, or any third party, in order to
                consummate the transactions contemplated by this Agreement, including
                the
                issuance of the Purchased Share.

            

    

     

    
      	
               

            	
              4.5.

            	
              Shares;
                Capitalization.  The authorized capital of the
                Company immediately prior to the Closing is NIS 100,000 divided to
                1,000,000 shares nominal value NIS 0.1 per share, of which 64,728
                Ordinary
                Shares are issued and outstanding, 5,272 are reserved for warrants
                to be
                granted, and 10,000 are reserved for issuance to employees under
                the Plan,
                of which 2,000 options have been promised to the Company’s project
                manager, Mr. Arnon Epstein and 2,000 options have been promised to
                the Company’s external 

            

      	 	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	 	 	director
              Mr. Chris McAuliffe.  The outstanding shares and options of
              the Company are owned by the shareholders named in and in the numbers
              specified in the capitalization table attached hereto as
              Schedule 4.5.  The Purchased Shares
              when issued and allotted in accordance with this Agreement will be
              duly
              authorized, validly issued, fully paid and
              non-assessable.  Except as described in
              Schedule 4.5, (a) the Company has not
              issued options, warrants, purchase rights, subscription rights,
              Participation Rights, rights of first refusal, conversion rights,
              anti-dilution rights, exchange rights, or other rights or securities,
              of
              any nature whatsoever, or other contracts, agreements, undertakings,
              promises or commitments that could require the Company or, to the
              Company’s knowledge, a shareholder of the Company, to issue, sell, or
              otherwise cause to become outstanding any of its share capital; and
              (b) no rights to purchase shares of the Company were granted by the
              Company, the Founders, and to the Company’s best knowledge, by other
              shareholders of the Company and to the Company’s knowledge, there are no
              claims possessed by any person (other than as specifically set forth
              in
              this Section) enforceable against the Company or, to the Company’s best
              knowledge, against a shareholder of the Company in law or in equity
              to
              compel such an issuance, adjustment or transfer of the Company’s shares
              (or any options, warrants, preemptive rights or other rights or
              securities, of any nature whatsoever, convertible into or exchangeable
              for
              shares of the Company) by reason of the execution, closing or performance
              of this Agreement or by any other reason.

    

     

    
      	
               

            	
              4.6.

            	
              Subsidiaries.  The
                Company does not own or control, directly or indirectly, any interest
                in
                any other corporation, association, or other business
                entity.

            

    

     

    
      	
               

            	
              4.7.

            	
              No
                prior resolutions.  No meeting of the Company’s
                shareholders and no meeting of the Company’s board of directors has taken
                place since the Company’s incorporations, and no resolutions of the
                Company’s shareholders and no resolutions of the Company’s board of
                directors have been adopted since the Company’s
                incorporation

            

    

     

    
      	
               

            	
              4.8.

            	
              Material
                agreements.  Except as otherwise detailed in
                Schedule 4.7, since it’s incorporation, the
                Company has not entered into any
                agreement.

            

    

     

    
      	
               

            	
              4.9.

            	
              Intellectual
                Property.

            

    

     

    
      	
               

            	
                             
                4.9.1.

            	
              General.  Except
                as otherwise detailed in Schedule 4.9.1 the
                Company owns or has the right to use pursuant to written license,
                sublicense, agreement, or permission, free and clear of any security
                interest and royalties (except as set forth in
                Schedule 4.9.1) all patents, trademarks,
                service marks, trade names, mask works, and copyrights and all trade
                secrets, including know-how, invention, 

            

      	 	 	 

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	designs,
              methods, drawing, computer programs, algorithms, firmware and technical
              data, as set forth in Schedule 4.7.1 currently used and/or necessary
              for the operation of the businesses of the Company as presently conducted
              and as currently proposed to be conducted
              (collectively:  “Intellectual
              Property”).  The Company’s registered or registrable
              Intellectual Property rights, including all patents, trademarks, service
              marks, trade names, and all applications therefore and all registered
              copyrights, are listed on
              Schedule 4.9.1.  With respect to
              each item of Intellectual Property required to be identified as set
              forth
              in this Section 4.9.1, (i) the Company possess all right,
              title, and interest in and to the item, free and clear of any security
              interest, license, royalty, commission or similar arrangements or other
              restriction; (ii) the item is not subject to any outstanding
              injunction, judgment, order, decree, ruling, or charge; (iii) no
              action, suit, proceeding, hearing, investigation, charge, complaint,
              claim, or demand is pending or, to the Company’s best knowledge, is
              threatened, which challenges in a material manner the legality, validity,
              enforceability, use, or ownership of the item; (iv) the Company has
              never agreed to indemnify any person for or against any interference,
              infringement, misappropriation, or other conflict with respect to the
              item
              (other than indemnification obligations arising from purchase, sale
              or
              license agreements entered into by the Company as set forth in
              Schedule 4.9.1); and (v) except as set
              forth in Schedule 4.9.1, the Company has not
              granted, and there are not outstanding, any options, licenses or
              agreements of any kind relating to the Intellectual Property, nor is
              the
              Company bound by or a party to any option, license or agreement of
              any
              kind with respect to any of the Intellectual Property.  The
              Company is the owner, free and clear of any and all Security Interests,
              of
              all the domain names used by or on behalf of the Company, which pertain
              to
              its business.

    

     

    
      	
               

            	
                             
                4.9.2.

            	
              No
                Need for Other IP.  Each item of Intellectual
                Property owned or used by the Company immediately prior to the Effective
                

            

      	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	Date
              will be owned or available for use by the Company on substantially
              the
              same terms and conditions immediately subsequent to the Effective Date
              and
              each Milestone Payment.  Except for readily and commercially
              available off-the-shelf software and hardware, to the best of the
              Company’s knowledge, no other Intellectual Property of any kind is
              required by the Company to conduct its business, as currently conducted
              and as currently proposed to be conducted, is owned by a third party
              or
              would require the payment of any fee or
              royalty.

    

     

    
      	
               

            	
                             
                4.9.3.

            	
              No
                Infringement.  Except as set forth in
                Schedule 4.9.3, (i) To the Company’s
                best knowledge, the Company has not interfered with, infringed upon,
                misappropriated, or otherwise come into conflict with any intellectual
                property rights of any third party, nor, to the Company’s best knowledge,
                will the conducting by it of its business, or use of the Intellectual
                Property, as presently conducted and as currently proposed to be
                conducted
                interfere, infringe upon, misappropriate or otherwise come into conflict
                with any intellectual property rights of any third party; (ii) the
                Company has never received any charge, complaint, claim, demand,
                or notice
                alleging any such interference, infringement, misappropriation, or
                violation (including any claim that the Company must license or refrain
                from using any intellectual property rights of any third party) and
                to the Company’s best knowledge there is no basis for such; and
                (iii) to the Company’s  knowledge, no third party has
                interfered with, infringed upon, misappropriated, or otherwise come
                into
                conflict with any Intellectual Property of the
                Company.

            

    

     

    
      	
               

            	
                             
                4.9.4.

            	
              Assignment
                of Entrepreneurs IP.  All Intellectual Property
                developed by the Entrepreneurs prior to the incorporation of the
                Company
                which relates to the Company’s business as currently conducted and as
                currently proposed to be conducted (“Founder IP”)
                was duly assigned by the Entrepreneurs at the time of, or following,
                the
                incorporation of the Company, free and clear of any Security Interest,
                and
                neither the Entrepreneurs, nor 

            

      	 	 	 

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	any
              other person, has any interest in or rights to any of the Founders
              IP.  The Company undertakes to make its best effort to protect
              the Founder IP, register it, obtain the consent and signatures of the
              Entrepreneurs, and to take any further actions which may be required
              or
              appropriate in order to assign and protect the Founder IP.  The
              Entrepreneurs are the sole inventors and developers of the Founder
              IP
              (including the inventions, methods and devices described and claimed
              in
              the patents which are part of such Founder IP) without any contribution,
              assistance or participation of any third
              party.  Schedule 4.9.4 contains
              correct and complete copies of all assignment documents of Founder
              IP to
              the Company.

    

     

    
      	
                             
                4.10.

            	
              Litigation.  There
                is no litigation, proceeding or governmental investigation in progress,
                pending, threatened or contemplated against or relating to the
                Company.

            

    

     

    
      	
                             
                4.11.

            	
              No
                Default.  The Company is not in default or breach
                of any material contracts, agreements, written or oral, indentures
                or
                other instruments to which it is a party, and there exists no state
                of
                facts after which notice or lapse of time or both would constitute
                such a
                default or breach and all such contracts, agreements, indentures
                or other
                instruments are now in good standing and the Company is entitled
                to all
                benefits thereunder.

            

    

     

    
      	
                             
                4.12.

            	
              No
                Impediment.  Neither the execution nor delivery of
                the Agreement, nor the carrying on of the Company’s business as now
                conducted, conflict with or result in a breach of the terms, conditions
                or
                provisions of, or constitute a default under, any contract, covenant
                or
                instrument under which the Company is now
                obligated.

            

    

     

    
      	
                             
                4.13.

            	
              Use
                of Proceeds.  The Company undertakes to use the
                proceeds from the Supplementary Funding contemplated hereunder to
                finance
                its research and development activities, day to day operation and
                growth
                of its business.

            

    

     

    
      	
                             
                4.14.

            	
              Restrictions
                by Law.  The Company was incorporated under the
                Incubator Program and therefore the Company is subject to certain
                rules
                and conditions provided under the Program.  In addition, due to
                the receipt of financing from the OCS by the Company, the Company
                is
                subject to the provisions of the Law for Encouragement of Research
                and
                Development in the Industry, 1984-5744, and the regulations promulgated
                therefore.

            

    

     

    
      	
                             
                4.15.

            	
              Brokers.  No
                agent, broker, investment banker, person or firm acting in a similar
                capacity on behalf of or under the authority of the Company is or
                will be
                entitled to any broker’s or finder’s fee or any other commission or
                similar fee, directly or indirectly, on account of any action taken
                by the
                Company in connection with any of the transactions contemplated under
                this
                Agreement.  The Company agrees to indemnify and hold the
                Investor harmless from and against any claim or liability resulting
                from
                any party claiming any such commission or fee, if such claims shall
                be
                contrary to the foregoing
                statement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
                             
                4.16.

            	
              Full
                Disclosure.  The Company has provided the Investor
                with all information that the Investor has requested in connection
                with
                its evaluation of the transactions contemplated
                hereunder.  There is no material fact or information relating to
                the Company (including without limitation to its business, financial
                conditions or otherwise), which reasonable experienced investors
                (such as
                the Investor), had it been aware of such material fact, would have
                refrained from investing in the Company on the terms set forth herein,
                that has not been disclosed to the Investor in writing by the
                Company.  The representations and warranties of the Company set
                forth in this Section 4 are, to the best of the Company’s knowledge,
                each accurate, correct and complete in all material
                respects.  Neither this Agreement nor any instrument made or
                delivered by the Company in connection herewith contains any untrue
                statement of a material fact or omits to state a material fact necessary
                to make the statements herein or therein not misleading, in view
                of the
                circumstances in which they were
                made.

            

    

     

    
      	
              5.

            	
              Further
                Covenants of the
                Parties.

            

    

     

    
      	
               

            	
              5.1.

            	
              Confidentiality.  Each
                of the parties hereto acknowledges that such party and/or its
                representative shall have access, in the course of its duties or
                position
                as a shareholder, director, or employee of the Company, to confidential
                and proprietary information of the Company including, without limitation,
                trade secrets, data, know-how, processes, formulas, methods, designs,
                inventions, ideas, experimental work, and all information concerning
                the
                business affairs of the Company (hereinafter, the “Confidential
                Information”).  Each party undertakes to maintain
                in confidence such Confidential Information, and not to disclose
                such
                Confidential Information to any person or organization whatsoever,
                or to
                make use of such Confidential Information for its own purposes or
                for the
                benefit of any person or organization other than the
                Company.  Each party shall further ensure that any of its
                representatives who have access to Confidential Information shall
                abide by
                the obligation to maintain in confidence, and not to disclose or
                use, such
                Confidential Information in accordance with the foregoing.  It
                is further agreed that “Confidential Information”
                shall not include information which (a) is, or becomes public domain
                without fault on the part of the receiving party; (b) is lawfully
                obtained from a source other than the disclosing party, free of any
                obligation to keep it confidential; (c) was previously known to the
                receiving party without an obligation to keep it confidential (d) is
                expressly released in writing from such obligations by the party
                that owns
                or has the rights to such information; or (e) is required to be
                disclosed pursuant to law, regulation, judicial or administrative
                order,
                or request by a governmental or other entity authorized by law to
                make
                such request.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              5.2.

            	
              Information
                Rights.  Immediately upon Investor’s request, the
                Company shall provide Investor with any information required by it
                with
                respect to the Company including but not limited to financial information
                names of shareholders and any other information as required by competent
                authorities and banking institutes.  To the extent required, the
                Investor shall be entitled to disclose such information upon the
                request
                of such competent authorities and banking
                institutes.

            

    

     

    
      	
              6.

            	
              Indemnification.

            

    

     

    The
      Company agrees to indemnify, defend and hold the Investor, including any
      affiliate, officer, director, shareholder, employee or agent thereof (each
      an
“Indemnified Party”), harmless against any and all damages,
      costs, liabilities, expenses (including reasonable legal fees and expenses)
      or
      losses suffered by such Indemnified Party, as a result of, or in connection
      with, (i) any breach or misrepresentation contained in this Agreement;
      (ii) the failure by the Company to fulfill any  obligation,
      agreement or covenant  pursuant to this Agreement; or (iii) any
      cost or expense, including reasonable legal fees incurred in connection with
      enforcing the rights of the Indemnified Party hereunder, all for a period of
      twelve (12) months following the date of the execution of this
      Agreement.  Except with respect to claims based on fraud and/or
      willful misrepresentation, the Company’s liability under this Section 6 shall be
      limited to the amount actually paid by the Investor to the Company
      hereunder.

     

    
      	
              7.

            	
              Miscellaneous.

            

    

     

    
      	
               

            	
              7.1.

            	
              Further
                Assurances.  Each of the parties hereto shall
                perform such further acts and execute such further documents as may
                reasonably be necessary to carry out and give further effect to the
                provisions of this Agreement and the intentions of the parties as
                reflected thereby.

            

    

     

    
      	
               

            	
              7.2.

            	
              Governing
                Law.  This Agreement shall be governed by and be
                construed according to the laws of Israel, without regard to the
                conflict
                of laws provisions thereto.  Any dispute arising under or in
                relation to this Agreement shall be resolved in the competent courts
                of
                Tel-Aviv - Jaffa District, and each of the parties hereby, submits
                irrevocably to the jurisdiction of such
                courts.

            

    

     

    
      	
               

            	
              7.3.

            	
              Further
                Assurances.  Each of the parties hereto shall
                perform such further acts and execute such further documents as may
                reasonably be necessary to carry out and give full effect to the
                provisions of this Agreement and the intentions of the parties as
                reflected thereby.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              7.4.

            	
              Successors
                and Assigns; Assignment.  Except as otherwise
                expressly limited herein, the provisions hereof shall inure to the
                benefit
                of, and be binding upon, the successors, assigns, heirs, executors,
                and
                administrators of the parties hereto.  None of the rights,
                privileges, or obligations set forth in, arising under, or created
                by this
                Agreement may be assigned or transferred without the prior consent
                in
                writing of each party to this
                Agreement.

            

    

     

    
      	
               

            	
              7.5.

            	
              Entire
                Agreement:  Amendment and Waiver.  This
                Agreement and the Schedules hereto, together with the provisions
                of the
                Founders Agreement that are incorporated by reference herein, constitute
                the full and entire understanding and agreement between the parties
                with
                regard to the subject matters hereof.  Any term of this
                Agreement may be amended and the observance of any term hereof may
                be
                waived (either prospectively or retroactively and either generally
                or in a
                particular instance) only with the written consent of all of the
                parties
                to this Agreement.

            

    

     

    
      	
               

            	
              7.6.

            	
              Notices.  Any
                notice given under this Agreement must be in writing to the address
                indicated herein below (or such other address as may be indicated
                from
                time to time by the relevant party by giving notice thereof) and
                shall be
                effective:  (i) if mailed by registered mail return receipt
                requested, five (5) business days after mailing; (ii) if sent by
                messenger, upon delivery; and (iii) if sent via telecopier, one (1)
                business day after transmission and electronic confirmation of receipt,
                when followed by a hard copy sent by first class
                post.

            

    

     

    
      	
               

            	
              7.7.

            	
              Delays
                or Omissions.  No delay or omission to exercise any
                right, power, or remedy accruing to any party upon any breach or
                default
                under this Agreement, shall be deemed a waiver of any other breach
                or
                default thereto or thereafter occurring.  Any waiver permit,
                consent, or approval of any kind or character on the part of any
                party of
                any breach or default under this Agreement, or any waiver on the
                part of
                any party of any provisions or conditions of this Agreement, must
                be in
                writing and shall be effective only to the extent specifically set
                forth
                in such writing.  All remedies, either under this Agreement or
                by law or otherwise afforded to any of the parties, shall be cumulative
                and not alternative.

            

    

     

    
      	
               

            	
              7.8.

            	
              Severability.  If
                any provision of this Agreement is held by a court of competent
                jurisdiction to be unenforceable under applicable law, then such
                provision
                shall be excluded from this Agreement and the remainder of this Agreement
                shall be interpreted as if such provision were so excluded and shall
                be
                enforceable in accordance with its terms; provided, however, that
                in such
                event this Agreement shall be interpreted so as to give effect to
                the
                greatest extent consistent with and permitted by applicable law,
                to the
                meaning and intention of the excluded provision as determined by
                such
                court of competent jurisdiction.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              7.9.

            	
              Counterparts.  This
                Agreement may be executed in any number of counterparts, each of
                which
                shall be deemed an original and enforceable against the parties actually
                executing such counterpart, and all of which together shall constitute
                one
                and the same instrument.

            

    

     

    
      	
                             
                7.10.

            	
              Recitals,
                Schedules and Headings.  The recitals and schedules to this
                Agreement shall constitute an integral part thereof.  Headings
                are provided for the sake of convenience only, and shall not be used
                in
                the interpretation of this
                Agreement.

            

    

     

     

    [Signature
      page follows]

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above-written.

     

     

     

    
      	
              SCORPION
                SURGICAL TECHNOLOGIES LTD.

            	 	
              CELL
                KINETICS LTD.

            
	 	 	 
	 	 	 
	
              By:
                /s/ Steve Rhodes

            	 	
              By: 
                /s/ Jacob Weiss, /s/ Israel Fisher

            
	 	 	 
	
              Name:
                Steve Rhodes

            	 	
              Name: 
                Jacob Weiss, Israel Fisher

            
	 	 	 
	
              Title:
                Director

            	 	
              Title: 
                Chairman, CFO

            

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    LIST
      OF SCHEDULES

     

    Schedule
      A - Approved Budget

     

    Schedule
      B - Capitalization Table

     

    Schedule
      C - Investment Schedule and Milestones

     

    Schedule
      1.4.1 - Board of Directors and Shareholders Resolutions

     

    Schedule
      1.4.2 - Waivers/Termination and Release of any Participation Rights

     

    Schedule
      1.4.3 - Expandis Waiver

     

    Schedule
      1.4.4 - Addendum to Founders Agreement

     

    Schedule
      1.4.5 - New Articles of Association

     

    Schedule
      1.4.6 - Share Certificates and Registration

     

    Schedule
      1.4.7 - Compliance Certificate

     

    Schedule
      1.4.9 - IP Assignment

     

    Schedule
      4 -Disclosure schedule

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE A

     

     

    APPROVED
      BUDGET

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      OFFICE
        OF THE CHIEF SCIENTIST

      CENTRALIZATION
        OF THE BUDGET (DO NOT COMPLETE - COMPLETION TAKES PLACES

      AUTOMATICALLY
        AFTER FILLING OUT THE DETAILED SHEETS)

       

      This
        sheet represents an integral part of the request.

       

      (Please
        fill in first the definition sheet of salaries and overhead
        ceilings)

       

      PROJECT
        BUDGET OF THE CHIEF SCIENTIST OFFICE

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and
                  anchoring

              
	
                Number
                  of Request:

              	
                37701

              
	
                Execution
                  period:

              	 
	
                Execution
                  period

              	
                From
                  (month / year)

              	
                May
                  07

              
	 	
                To
                  (month / year)

              	
                April
                  09

              
	
                COMPANY
                  REQUEST

              
	 	 	
                Total

              	
                Part
                  in %

              
	
                A.
                  MANPOWER

                See
                  Appendix 1

              	
                Man
                  years

              	
                2,91666667

              	
                578,500

              	 
	
                Reserve

              	
                0

              	 
	 	
                Total

              	 
	 	
                578,500

              	
                40%

              
	 	 	 	 	 
	
                B.
                  CONSUMABLE MATERIALS AND TOOLS

              	 	 	
                Total

              	 
	
                See
                  Appendix 2

              	
                35,000

              	
                2%

              
	 	 	 	 	 
	
                C.
                  SUBCONTRACTORS

              	 	 	 	 
	
                See
                  Appendix 3

              	 	 	 	 
	
                Subcontractors
                  - Israel

              	 	
                Sum

              	
                250,500

              	
                17%

              
	
                Subcontractors
                  - abroad

              	 	
                Sum

              	
                180,000

              	
                13%

              
	 	 	
                Total
                  subcontractors

              	
                430,500

              	
                30%

              
	 	 	 	 	 
	
                D.
                  APPROVED EQUIPMENT

              	 	 	
                Total

              	 
	
                See
                  Appendix 4

              	 	 	
                52,600

              	
                4%

              
	 	 	 	 	 
	
                E.
                  MISCELLANEOUS

              	 	 	
                Total

              	 
	
                See
                  Appendix 5

              	 	 	
                230,000

              	
                16%

              
	 	 	 	 	 
	
                F.
                  MARKETING

              	 	 	
                Total

              	 
	
                See
                  Appendix 6

              	 	 	
                110,000

              	
                8%

              
	 	 	 	 	 
	
                GENERAL
                  TOTAL

              	 	
                Total

              	 
	
                Total
                  budget

              	
                1,436,600

              	
                100%

              
	
                Loan
                  / grant

              	
                1,221,110

              	
                85%

              
	
                SIGNATURES:

              
	
                PROJECT
                  MANAGER

              	
                TECHNOLOGICAL
                  INCUBATOR MANAGER

              	
                DIRECTION
                  OF TECHNOLOGICAL
                  INCUBATORS

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

      
        	
                Page
                  no. 1

              	
                APPENDIX
                  1 - MANPOWER

              	
                This
                  sheet represents an integral part of the
                  request.

              

      

      

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and
                  anchoring

              
	
                Number
                  of Request:

              	
                37701

              

      

      

      
        	
                EFFECTIVE
                  SALARY INCLUDING SOCIAL PAYMENTS - EMPLOYER COST -

                PAYMENTS
                  FIGURING IN THE PAYROLL AND DIRECT SOCIAL
                  EXPENDITURES

              
	
                COMPANY
                  REQUEST

              	
                REQUESTED
                  SUM IN N.I.S

              	 
	
                Monthly

              	 
	
                #.

              	
                Name
                  and surname

              	
                Salary
                  code

              	
                Academic
                  title

              	
                Function

              	
                Effective
                  salary including social payments

              	 	 	
                Number
                  of months

              	 	
                Requested
                  man years

              	
                Effective
                  salary

              
	
                1.

              	
                Arnon
                  EPSTEIN

              	
                1

              	
                BA

              	
                Product
                  Engineer

              	
                17,000

              	
                17,000

              	
                100%

              	
                24

              	
                408000

              	
                2.,0

              	
                408,000

              
	
                2.

              	
                Not
                  decided zet

              	
                2

              	
                BA

              	
                Engineer

              	
                15,500

              	
                17,000

              	
                100%

              	
                11

              	
                170500

              	
                0.9

              	
                170,500

              
	
                3.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                4.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                5.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                6.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                7.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                8.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                9.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	
                10.

              	 	
                10

              	 	 	
                0

              	 	 	 	
                0

              	
                0,0

              	
                0

              
	 	 	 	 	 	 	 	 	
                Total
                  salaries

              	
                578,500

              	
                2,9

              	
                578,500

              
	 	 	 	 	 	 	 	 	
                Future
                  price rises

              	 	 	 
	 	 	 	 	 	 	 	 	
                Total
                  approved salary

              	
                578,500

              	 	 

      

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

      APPENDIX
        2 - CONSUMABLE MATERIALS AND TOOLS

       

      This
        sheet represents an integral part of the request.

       

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and anchoring

              
	
                Number
                  of Request:

              	
                37701

              

      

      

      
        	 	 	 	
                COMPANY
                  REQUEST

              
	
                #.

              	
                Description
                  of item or type

              	
                Ensemble
                  to which pertains the requested item

              	
                Cost
                  code

              	
                Cost
                  based on

              	
                Unit
                  price in NIS

              	
                Quantity

              	
                Total
                  requested sum

              
	 	 	 	 	 	 	 	 
	
                1.

              	
                Various
                  metallic parts

              	
                Prototypes

              	 	
                N/A

              	
                20,000

              	
                1

              	
                20,000

              
	
                2.

              	
                Bones

              	
                Tests

              	 	
                N/A

              	
                5,000

              	
                1

              	
                5,000

              
	
                3.

              	
                Other
                  consumables

              	
                Lab
                  tests

              	 	
                N/A

              	
                10,000

              	
                1

              	
                10,000

              
	
                4.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                5.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                6.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                7.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                8.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                9.

              	 	 	 	
                N/A

              	 	 	
                0

              
	
                10.

              	 	 	 	
                N/A

              	 	 	
                0

              
	 	 	 	 	 	 	 	 
	 	
                Total
                  materias

              	
                35,000

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST -

       

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

       

      APPENDIX
        3 - SUBCONTRACTORS

       

      This
        sheet represents an integral part of the request.

       

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and anchoring

              
	
                Number
                  of Request:

              	
                37701

              

      

      

      
        	 	 	 	
                COMPANY
                  REQUEST

              
	
                #

              	
                Nature
                  of the work

              	
                Name
                  of the subcontractor (all subcontractors will be centralized according
                  to
                  the nature of the work)

              	 	
                Requested
                  sum in NIS

              
	 	
                Cost

              	
                Cost
                  based on

              	
                Quantity

              	
                Unit
                  price

              	
                Total

              
	
                SUBCONTRACTORI
                  - ISRAEL

              
	
                1.

              	
                Prototype
                  production

              	
                Center,
                  Metadin,
                  Hanan Avidan, other

              	
                4

              	
                Approx.

              	
                1

              	
                95,000

              	
                95,000

              
	
                2.

              	
                Implant
                  production

              	
                Center,
                  Limet,
                  other

              	
                4

              	
                Approx.

              	
                1

              	
                95,000

              	
                95,000

              
	
                3.

              	
                Planning
                  of a regulatory procedure

              	
                Not
                  decided yet

              	
                4

              	
                Approx.

              	
                1

              	
                10,000

              	
                10,000

              
	
                4.

              	
                Regulatory
                  consultancy and quality
                  NGW

              	
                Dan
                  Laor

              	
                4

              	
                Approx.

              	
                1

              	
                20,000

              	
                20,000

              
	
                5.

              	
                Engineering
                  planning

              	
                Not
                  decided yet

              	
                4

              	
                Aprox.

              	
                1

              	
                30,500

              	
                30,500

              
	
                6.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                7.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                8.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                9.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                10.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                11.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                12.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                13.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                14.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	
                15.

              	 	 	 	
                N/A

              	
                1

              	 	
                0

              
	 	
                Total
                  subcontractors - Israel

              	 	
                Total
                  subcontractors - Israel

              	
                250,500

              
	
                SUBCONTRACTORS
                  - ABROAD

              
	
                1.

              	
                Mechanical
                  tests

              	
                Dr.
                  Christian Kadik

              	
                4

              	
                Approx.

              	
                2

              	
                25,000

              	
                50,000

              
	
                2.

              	
                Biomechanical
                  tests

              	
                Ulm
                  University, Department of Biomechanics

              	
                4

              	
                Approx.

              	
                1

              	
                130,000

              	
                130,000

              
	
                3.

              	 	 	 	
                N/A

              	
                2

              	 	
                0

              
	
                4.

              	 	 	 	
                N/A

              	
                3

              	 	
                0

              
	
                5.

              	 	 	 	
                N/A

              	
                4

              	 	
                0

              
	 	
                Total
                  subcontractors abroad

              	 	 	
                Total
                  subcontractors abroad

              	
                180,000

              
	 	 	 	 	 	 
	 	
                TOTAL
                  SUBCONTRACTORS

              	 	 	 	
                430,500

              	 

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST -

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

       

      APPENDIX
        4 - EQUIPMENT

       

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and anchoring

              
	
                Number
                  of Request:

              	
                0

              

      

      
 

      
        	
                #

              	
                Description
                  of equipment or item

              	
                Description
                  of activities in which the part of equipment is
                  involved

              	
                Unit
                  cost in NIS

              	
                Quantity

              	
                Cost
                  code

              	
                Total
                  cost

              
	 
	
                1.

              	
                Furniture

              	
                Company
                  Management

              	
                3,000

              	
                1

              	
                4

              	
                3,000

              
	
                2.

              	
                Computer

              	
                Company
                  Management

              	
                10,000

              	
                1

              	
                4

              	
                10,000

              
	
                3.

              	
                Work
                  tools

              	
                Prototype
                  design

              	
                600

              	
                1

              	
                4

              	
                600

              
	
                4.

              	
                Software

              	
                Company
                  Management

              	
                25,000

              	
                1

              	
                4

              	
                25,000

              
	
                5.

              	
                Measuring
                  instruments

              	
                Prototype
                  design

              	
                4,000

              	
                1

              	
                4

              	
                4,000

              
	
                6.

              	
                Miscellaneous

              	
                Company
                  Management

              	
                10,000

              	
                1

              	
                4

              	
                10,000

              
	
                7.

              	 	 	 	 	 	
                0

              
	
                8.

              	 	 	 	 	 	
                0

              
	
                9.

              	 	 	 	 	 	
                0

              
	
                10.

              	 	 	 	 	 	
                0

              
	
                11.

              	 	 	 	 	 	
                0

              
	
                12.

              	 	 	 	 	 	
                0

              
	 	
                Total
                  equipment

              	
                52,600

              

      

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

       

      APPENDIX
        5 - MISCELLANEOUS (as specified in the regulations)

       

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and anchoring

              
	
                Number
                  of Request:

              	
                0

              

      

       

      
 

      
        	
                #

              	
                Activity

              	
                Total

              
	 
	
                1.

              	
                Overhead
                  (according to the established ceiling)

              	
                110,000

              
	
                2.

              	
                Patents

              	
                50,000

              
	
                3.

              	
                Clinical
                  tests

              	
                30,000

              
	
                4.

              	
                Travel
                  abroad - tests

              	
                40,000

              
	
                5.

              	 	 
	 	 	
                230,000

              

      

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      OFFICE
        OF THE CHIEF SCIENTIST

      DIRECTION
        OF TECHNOLOGICAL INCUBATORS

       

       

      APPENDIX
        6 - MISCELLANEOUS  (as specified in the
        regulations)

       

      
        	
                Technological
                  Incubator:

              	
                Technological
                  Incubator Misgav, Karmiel

              
	
                Name
                  of the Company:

              	
                Scorpion
                  (provisional name)

              
	
                R&D
                  Subject:

              	
                Arched
                  implants’ system for bones’ fixation and anchoring

              
	
                Number
                  of Request:

              	
                0

              

      

       

      
 

      
        	
                #

              	
                Activity

              	
                Total

              
	 
	
                1.

              	
                Business
                  plan

              	
                25,000

              
	
                2.

              	
                Business
                  meetings abroad

              	
                80,000

              
	
                3.

              	
                Marketing
                  materials

              	
                5,000

              
	
                4.

              	 	 
	
                5.

              	 	 
	
                6.

              	 	 
	
                7.

              	 	 
	
                8.

              	 	 
	
                9.

              	 	 
	
                10.

              	 	 
	
                11.

              	 	 
	
                12.

              	 	 
	 	
                Total
                  marketing

              	
                110,000

              

      

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE B

       

      POST-INVESTMENT
        CAPITALIZATION TABLE

       

      (see
        excel file attached)

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Post
        Investment

       

      
        	 	
                Following
                  Investment

              
	
                Shareholder
                  Name

              	
                Ordinary
                  Shares

              	
                Options
                  to Ordinary Shares

              	
                Total
                  (fully diluted)

              	
                %
                  Fully diluted

              
	
                Steve
                  Rhodes

              	
                3,000.00

              	
                
                  —

                

              	
                3,000.00

              	
                3.00%

              
	
                Misgav
                  Carmiel Technology Incubator Management Services Ltd.

              	
                7,000.00

              	
                
                  —

                

              	
                7,000.00

              	
                7.00%

              
	
                Trendlines
                  Israel Fund, L.P.

              	
                10,000.00

              	
                
                  —

                

              	
                10,000.00

              	
                10.00%

              
	
                Yuval
                  Sheziffi

              	
                9,990.00

              	
                
                  —

                

              	
                9,990.00

              	
                9.99%

              
	
                Asaf
                  Ben Arye

              	
                11,482.00

              	
                
                  —

                

              	
                11,482.00

              	
                11.48%

              
	
                Ilan
                  Grunberg

              	
                11,824.00

              	
                
                  —

                

              	
                11,824.00

              	
                11.82%

              
	
                Nisim
                  Ohana

              	
                11,432.00

              	
                
                  —

                

              	
                11,432.00

              	
                11.43%

              
	
                Technion
                  Incubator for Entrepreneurship Ltd.

              	
                —

              	
                1,387.00

              	
                1,387.00

              	
                1.39%

              
	
                Technological
                  Incubator Foundation of the Technion Institute for R&D
                  Ltd.

              	
                
                  —

                

              	
                595.00

              	
                595.00

              	
                0.60%

              
	
                Mor
                  Research Applications Ltd.

              	
                
                  —

                

              	
                260.00

              	
                260.00

              	
                0.26%

              
	
                Avner
                  Kurz

              	
                
                  —

                

              	
                547.00

              	
                547.00

              	
                0.55%

              
	
                Yizhak
                  Ben-Zion

              	
                
                  —

                

              	
                295.00

              	
                295.00

              	
                0.30%

              
	
                Shalom
                  Arbiv

              	
                
                  —

                

              	
                190.00

              	
                190.00

              	
                0.19%

              
	
                Reuven
                  Ovadia

              	
                
                  —

                

              	
                408.00

              	
                408.00

              	
                0.41%

              
	
                Amiram
                  Bornstein

              	
                
                  —

                

              	
                1,111.00

              	
                1,111.00

              	
                1.11%

              
	
                Nir
                  Galon

              	
                
                  —

                

              	
                204.00

              	
                204.00

              	
                0.20%

              
	
                Rami
                  Cohen

              	
                
                  —

                

              	
                275.00

              	
                275.00

              	
                0.28%

              
	
                ESOP

              	
                
                  —

                

              	
                10,000.00

              	
                10,000.00

              	
                10.00%

              
	
                Cell
                  Kinetics

              	
                20,000.00

              	 	
                20,000.00

              	
                20.00%

              
	
                Total

              	
                84,728

              	
                15,272

              	
                100,000

              	
                100.00%

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE C

       

      

       

      INVESTMENT
        SCHEDULE AND MILESTONES

       

      
        	
                Investment
                  Amount

              	
                Number
                  of Shares to be Issued

              	
                Milestone

              
	
                $50,000.00

              	
                6,666

              	
                Signing
                  of this Agreement and fulfillment of the conditions precedent set
                  forth in
                  section 1.4 of the Agreement (the “Commencing
                  Date”).

              
	
                $50,000.00

              	
                6,666

              	
                No
                  later than one year from the Commencing Date and subject to the
                  fulfillment of the conditions precedent set forth in section 1.5 of
                  the Agreement, and provided that the Investor shall have raised
                  at least
                  US$1.5M (one million five hundred thousand United States dollars)
                  in an
                  equity fund raising.*

              
	
                $50,000.00

              	
                6,667

              	
                Signing
                  of agreement by Company with medical research center for the performance
                  of clinical trials and fulfillment of the conditions precedent
                  set forth
                  in section 1.5 of the
                  Agreement.*

              

      

      

        

      

       

    

     

     

     

     

     

     

    
       

       
        
          

        

      

      
        *
          To avoid all doubt it is hereby clarified that this milestone may occur
          prior to
          or after the other milestone destined to occur after payment of the first
          milestone payment.

         

      

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1.4.1A

     

    

     

    BOARD
      RESOLUTION

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCORPION
      SURGICAL TECHNOLOGIES LTD.

    (the
      “Company”)

     

     

    UNANIMOUS
      WRITTEN RESOLUTION

    OF
      THE

    BOARD
      OF DIRECTORS

     

     

    DATED
      July 26, 2007

     

    The
      undersigned, comprising of all the members of the Board of Directors of Scorpion
      Surgical Technologies Ltd. (the “Company”), acting by unanimous
      written resolution of the board of directors of the Company (the
“Board”), in lieu of a meeting of the Board pursuant to the
      Articles of Association of the Company, do hereby adopt in writing and without
      a
      meeting the following resolutions as of July 26, 2007.

     

     

    SUPPLEMENTARY
      FUNDING AGREEMENT

     

    Mr.
      Asaf
      Ben-Arye has’ disclosed the nature of his personal interest in the contemplated
      resolution (including any substantial fact or document) and did not participate
      or vote on such matter and his signature appears below in respect of such matter
      solely in order that this written resolution is signed by all
      directors.

     

    WHEREAS,
      the Board deems it advisable and in the best interest of the Company to enter
      into that certain Supplementary Funding Agreement, substantially in the form
      attached hereto as Exhibit A (the “Supplementary
      Funding Agreement”), by and among the Company and Cell Kinetics Ltd.
      (the “Investor”), providing for, among other things, the
      issuance by the Company to the Investors of 20,000 Ordinary shares NIS 0.1
      par
      value each of the Company (the “Ordinary Shares”), at a price
      per share of US $7.5; and

     

    NOW,
      THEREFORE BE IT:

     

    RESOLVED,
      to authorize and approve the execution and delivery by the Company of the
      Supplementary Funding Agreement as well as any other agreement or document
      ancillary to any of the foregoing (collectively, the “Transaction
      Documents”); and

     

    FURTHER
      RESOLVED, to issue to the .Investors upon and simultaneously with the
      payment of each Milestone Payment (as such terms is defined in the Supplementary
      Funding Agreement) Ordinary Shares in such number as set forth in Exhibit C
      of
      the Supplementary Funding Agreement.

     

     

    NEW
      ARTICLES OF ASSOCIATION

     

    WHEREAS,
      the Board deems it advisable and in the best interest of the Company to replace
      the Articles of Association of the Company in their entirely with the Articles
      of Association attached hereto as Exhibit B (the
“New Articles”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NOW,
      THEREFORE BE IT:

     

    RESOLVED,
      that the New Articles are hereby approved; and

     

    FURTHER
      RESOLVED, that the foregoing resolution shall be submitted to the
      Shareholders of the Company for approval; and

     

    FURTHER
      RESOLVED, that upon approval by the Shareholders of the New Articles,
      the officers of the Company are authorized and directed to execute the New
      Articles and to take all such actions as such officers deem necessary or
      desirable to cause the filing of the New Articles with the Registrar of
      Companies and to cause the New Articles to become effective.

     

     

    RESERVATION
      OF ORDINARY SHARES UNDER THE EMPLOYEES STOCK OPTION
      PLAN

     

    RESOLVED,
      that the Board hereby approves the reservation of 10,000 Ordinary Shares of
      the
      Company for allocation to employees, directors and consultants under an employee
      stock option plan to be adopted by the Company.

     

     

    GENERAL
      AUTHORITY

     

    RESOLVED,
      that Mr. Steve Rhodes be, and hereby is, authorized and directed, in the name
      and on behalf of the Company, to take or cause to be taken any and all such
      actions, to execute and deliver or cause to be executed and delivered all such
      documents, instruments and agreements (including the Transaction Documents
      and
      the share certificates evidencing the Ordinary Shares issued pursuant to the
      previous resolution), and to make such filings, in the name and on behalf of
      the
      Company, to incur and to pay all such fees and expenses and to engage as he
      shall in his judgment determine to be necessary, desirable or advisable to
      carry
      out fully the intent and purposes of the foregoing resolutions and the execution
      by Mr. Rhodes of any such document, or the payment of any such expenses or
      the
      doing by him of any act in connection with the foregoing matters shall
      conclusively establish his authority therefore and the approval of the documents
      so executed, the expenses so paid, the filings so made and the actions so
      taken.

     

    FURTHER
      RESOLVED, that all of the actions previously taken by any officer of
      the Company in connection with transactions contemplated by the foregoing
      resolutions are, and they hereby are, adopted, ratified, confirmed and approved
      in all respects.

     

    IN
      WITNESS HEREOF, the undersigned members of the Board have executed the
      above resolution in one or more counterparts.

     

     

     

    
      	 	 	 	 	 
	
              /s/ 
Steven
                Rhodes

            	 	 	
              /s/
                Asaf
                Ben-Arye

            	 
	
              Steven
                Rhodes

            	 	 	
              Asaf
                Ben-Arye

            	 

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    to
      Scorpoion Surgical Technologies Ltd.’s,

    Board
      Resolution dated July 26, 2007

     

    Supplementary
      Funding Agreement

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit B

    to
      Scorpoion Surgical Technologies Ltd.’s

    Board
      Resolution dated July 26, 2007

     

    New
      Articles of Association

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1.4.1B

     

    SHAREHOLDERS
      RESOLUTION

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCORPION
      SURGICAL TECHNOLOGIES LTD.

    (the
      “Company”)

     

    

     

    Minutes
      of a Meeting of the Shareholders of the Company

     

    
      	
              DATE:

            	
              July
                26, 2007

            
	 	 
	
              TIME:

            	
              17:00

            
	 	 
	
              PRESENT:

            	
              Steve
                Rhodes

            
	 	 
	
              PRESENT
                BY PROXY:

            	
              Asaf
                Ben Arye

              Ilan
                Grunberg

              Nisim
                Ohana

              Yuval
                Sheziffi

              Trendlines
                Israel Fund, L.P.

              Misgav
                Carmiel Technology Incubator Management Services
                Ltd.

            

    

     

    CALL
      TO ORDER

     

    A
      meeting
      of all of the Shareholders of the Company, in accordance with the Articles
      of
      Association of the Company and the applicable law, was held at the above date,
      time and place. Steve Rhodes was elected as Chairman of the meeting, according
      to section 57 of the Company’s Articles of Association, and called the meeting
      to order, and announced that a quorum of Shareholders was present and that
      the
      meeting, having been duly convened, and the Shareholders having waived their
      right to receive prior notice, was ready to proceed with its
      business.

     

     

    SUPPLEMENTARY
      FUNDING AGREEMENT

     

    WHEREAS,
      the Board of Directors of the Company (the “Board”) deems it
      advisable and in the best interest of the Company to enter into that certain
      Supplementary Funding Agreement, substantially in the form attached hereto
      as
Exhibit A (the “Supplementary Funding
      Agreement”), by and among the Company, and Cell Kinetics Ltd. (the
“Investor”), providing for, among other things, the issuance
      by
      the Company to the Investors of 20,000 Ordinary shares NIS 0.1 par value each
      of
      the Company (the “Ordinary Shares”), at a price per share of US $7.5;
      and

     

    NOW,
      THEREFORE BE IT:

     

    RESOLVED,
      to authorize and approve the execution and delivery by the Company of the
      Supplementary Funding Agreement as well as any other agreement or document
      ancillary to any of the foregoing (collectively, the “Transaction
      Documents”); and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FURTHER
      RESOLVED, to issue to the Investors upon and simultaneously with the
      payment of each Milestone Payment (as such terms is defined in the Supplementary
      Funding Agreement) Ordinary Shares in such number as set forth in Exhibit C
      of
      the Supplementary Funding Agreement.

     

     

    NEW
      ARTICLES OF ASSOCIATION

     

    WHEREAS,
      the Board deems it advisable and in the best interest of the Company to replace
      the Articles of Association of the Company in their entirely with the Articles
      of Association attached hereto as Exhibit B (the
“New Articles”).

     

    NOW,
      THEREFORE BE IT:

     

    RESOLVED,
      that the New Articles are hereby approved.

     

     

    GENERAL
      AUTHORITY

     

    RESOLVED,
      that Mr. Steve Rhodes be, and hereby is, authorized and directed, in the name
      and on behalf of the Company, to take or cause to be taken any and all such
      actions, to execute and deliver or cause to be executed and delivered all such
      documents, instruments and agreements (including the Transaction Documents
      and
      the share certificates evidencing the Ordinary Shares issued pursuant to the
      previous resolution), and to make such filings, in the name and on behalf of
      the
      Company, to incur and to pay all such fees and expenses and to engage as he
      shall in his judgment determine to be necessary, desirable or advisable to
      carry
      out fully the intent and purposes of the foregoing resolutions and the execution
      by Mr. Rhodes of any such document, or the payment of any such expenses or
      the
      doing by him of any act in connection with the foregoing matters shall
      conclusively establish his authority therefore and the approval of the documents
      so executed, the expenses so paid, the filings so made and the actions so
      taken.

     

    FURTHER
      RESOLVED, that all of the actions previously taken by any officer of
      the Company in connection with transactions contemplated by the foregoing
      resolutions are, and they hereby are, adopted, ratified, confirmed and approved
      in all respects.

     

    There
      being no further. business, the meeting was adjourned.

     

    /s/
      Steve Rhodes

    Steve
      Rhodes

    Chairman
      of the Meeting

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit A

    to
      Scorpoion Surgical Technologies Ltd.’s

    Shareholders
      Resolution dated July 26, 2007

     

    

     

    Supplementary
      Funding Agreement

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit B

    to
      Scorpoion Surgical Technologies Ltd.’s

    Shareholders
      Resolution dated July 26, 2007

     

    

     

    New
      Articles of Association

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCORPION
      SURGICAL TECHNOLOGIES LTD.

    (the
      “Company”)

     

    Date:  July
      26, 2007

     

    To
      the
      shareholders of the Company,

     

    
      	
               

            	
              Re:

            	
              Notice
                of an Extraordinary Meeting of the Shareholders of the
                Company

            

    

     

    
      	
              1.

            	
              Notice
                is hereby given that on July 26, 2007 at 17:00 Israel time, an
                Extraordinary Meeting of the Shareholders of the Company shall be
                held at
                the USA.

            

    

     

    
      	
              2.

            	
              The
                Meeting is called in order to discuss the following
                issues:

            

    

     

    
      	
               

            	
              2.1.

            	
              Approval
                of the Supplementary Funding
                Agreement.

            

    

     

    
      	
               

            	
              2.2.

            	
              Replacement
                of the Articles of Association of the Company with the New Articles
                of
                Association.

            

    

     

    
      	
               

            	
              2.3.

            	
              Granting
                general authority to Mr. Steve Rhodes to take all necessary actions
                in
                connection with the above
                resolutions.

            

    

     

    
      	
              3.

            	
              Any
                shareholder of the Company who wishes to vote at the Meeting by proxy
                shall deliver a proxy to the registered office of the Company no
                later
                than 48 hours before the time appointed for the Meeting or any adjournment
                thereof, or present such proxy to the chairman of the Meeting. For
                your
                convenience, an appropriate form of proxy is attached
                hereto.

            

    

     

    
      	
              4.

            	
              The
                presence, of at least two shareholders, present in person or by proxy,
                and
                who hold or represent in the aggregate at least 25% of the voting
                power of
                the Company, shall constitute a quorum for this extraordinary meeting.
                If
                within half an hour from the time appointed for the meeting a quorum
                is
                not present, the meeting, shall stand adjourned to the same day the
                following week, at the same time and
                place.

            

    

     

    
      	
              5.

            	
              In
                the event that you are unable to attend the meeting, please sign
                the
                enclosed proxy and return by fax to Mr. Steve Rhodes no later than
                16:00
                today at 4106251060 (room 518).

            

    

     

    /s/
      Steve
      Rhodes                           

    Mr.
      Steve
      Rhodes

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        (the
          “Company”)

         

        PROXY
          FORM

         

        I,
          the
          undersigned, a shareholder of Scorpion Surgical Technologies Ltd. (the
          “Company”), hereby approve receipt of the notice of the
          Extraordinary Meeting of the shareholders of the Company to be held on
          July 26,
          2007 at 17:00, and irrevocably appoint Mr. Steve Rhodes (with power of
          substitution) to vote on my behalf at such Meeting and at any adjournments
          thereof as follows:

         

        
          	
                  Matter
                    to be Discussed

                	
                  Avoid

                	
                  For

                	
                  Against

                
	
                  I
                    hereby waive the right to receive 7 days prior notice regarding
                    the
                    Extraordinary Meeting, under section 67 of the Companies Law
                    -
                    1999.

                	
                  o

                	
                  x

                	
                  
                    o

                  

                
	
                  To
                    authorize and approve the execution and delivery by the Company
                    of the
                    Supplementary Funding Agreement as well as any other agreement
                    or document
                    ancillary to any of the foregoing (collectively, the “Transaction
                    Documents”)

                	
                  o

                	
                  x

                	
                  
                    o

                  

                
	
                  To
                    issue to the Investors upon and simultaneously with the payment
                    of each
                    Milestone Payment (as such terms is defined in the Supplementary
                    Funding
                    Agreement) Ordinary Shares in such number as set forth in Exhibit
                    C of the
                    Supplementary Funding Agreement

                	
                  o 

                	
                  x

                	
                  
                    o

                  

                
	
                  That
                    the New Articles are hereby approved.

                	
                  o

                	
                  x

                	
                  
                    o

                  

                
	
                  That
                    Mr. Steve Rhodes be, and hereby is, authorized and directed,
                    in the name
                    and on behalf of the Company, to take or cause to be taken any
                    and all
                    such actions, to execute and deliver or cause to be executed
                    and delivered
                    all such documents, instruments and agreements (including the
                    Transaction
                    Documents and the share certificates evidencing the Ordinary
                    Shares issued
                    pursuant to the previous resolution), and to make such filings,
                    in the
                    name and on behalf of the Company, to incur and to pay all such
                    fees and
                    expenses and to engage as he shall in his judgment determine
                    to be
                    necessary, desirable or advisable to carry out fully the intent
                    and
                    purposes of the foregoing resolutions and the execution by Mr.
                    Rhodes of
                    any such document, or the payment of any such expenses or the
                    doing by him
                    of any act in connection with the foregoing matters shall conclusively
                    establish his authority therefore and the approval of the documents
                    so
                    executed, the expenses so paid, the filings so made and the actions
                    so
                    taken.

                	
                  o 

                	
                  x

                	
                  
                    o

                  

                
	
                  That
                    all of the actions previously-taken-by any officer of the-Company-in.
                    connection with transactions contemplated by the foregoing resolutions
                    are, and they hereby are, adopted, ratified, confirmed and approved
                    in all
                    respects.

                	
                  
                    o

                  

                	
                  x

                	
                  
                    o

                  

                

        

        

        Signature:     /s/
          Steve Rhodes          

         

        Name:            [Hebrew]                        

         

        Date:             
          24.7.07                            

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        (the
          “Company”)

         

        PROXY
          FORM

         

        I,
          the
          undersigned, a shareholder of Scorpion Surgical Technologies Ltd. (the
          “Company”), hereby approve receipt of the notice of the
          Extraordinary Meeting of the shareholders of the Company to be held on
          July 26,
          2007 at 17:00, and irrevocably appoint Mr. Steve Rhodes (with power of
          substitution) to vote on my behalf at such Meeting and at any adjournments
          thereof as follows:

         

        
          	
                  Matter
                    to be Discussed

                	
                  Avoid

                	
                  For

                	
                  Against

                
	
                  I
                    hereby waive the right to receive 7 days prior notice regarding
                    the
                    Extraordinary Meeting, under section 67 of the Companies Law
                    -
                    1999.

                	
                  o 

                	
                  x

                	
                  o 

                
	
                  To
                    authorize and approve the execution and delivery by the Company
                    of the
                    Supplementary Funding Agreement as well as any other agreement
                    or document
                    ancillary to any of the foregoing (collectively, the “Transaction
                    Documents”)

                	
                  o 

                	
                  x

                	
                  o 

                
	
                  To
                    issue to the Investors upon and simultaneously with the payment
                    of each
                    Milestone Payment (as such terms is defined in the Supplementary
                    Funding
                    Agreement) Ordinary Shares in such number as set forth in Exhibit
                    C of the
                    Supplementary Funding Agreement

                	
                  o 

                	
                  x

                	
                  o 

                
	
                  That
                    the New Articles are hereby approved.

                	
                  o 

                	
                  x

                	
                  o 

                
	
                  That
                    Mr. Steve Rhodes be, and hereby is, authorized and directed,
                    in the name
                    and on behalf of the Company, to take or cause to be taken any
                    and all
                    such actions, to execute and deliver or cause to be executed
                    and delivered
                    all such documents, instruments and agreements (including the
                    Transaction
                    Documents and the share certificates evidencing the Ordinary
                    Shares issued
                    pursuant to the previous resolution), and to make such filings,
                    in the
                    name and on behalf of the Company, to incur and to pay all such
                    fees and
                    expenses and to engage as he shall in his judgment determine
                    to be
                    necessary, desirable or advisable to carry out fully the intent
                    and
                    purposes of the foregoing resolutions and the execution by Mr.
                    Rhodes of
                    any such document, or the payment of any such expenses or the
                    doing by him
                    of any act in connection with the foregoing matters shall conclusively
                    establish his authority therefore and the approval of the documents
                    so
                    executed, the expenses so paid, the filings so made and the actions
                    so
                    taken.

                	
                  o 

                	
                  x

                	
                  o 

                
	
                  That
                    all of the actions previously-taken-by any officer of the-Company-in.
                    connection with transactions contemplated by the foregoing resolutions
                    are, and they hereby are, adopted, ratified, confirmed and approved
                    in all
                    respects.

                	
                  o 

                	
                  x

                	
                  o 

                

        

        

        Signature:   
           /s/ Steve
          Rhodes                

         

        Name:           Trendlines
          Israel Fund, L.P.

         

        Date:             24.7.07                                    
          

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        (the
          “Company”)

         

        PROXY
          FORM

         

        I,
          the
          undersigned, a shareholder of Scorpion Surgical Technologies Ltd. (the
          “Company”), hereby approve receipt of the notice of the
          Extraordinary Meeting of the shareholders of the Company to be held on
          July 26,
          2007 at 17:00, and irrevocably appoint Mr. Steve Rhodes (with power of
          substitution) to vote on my behalf at such Meeting and at any adjournments
          thereof as follows:

         

        
          	
                  Matter
                    to be Discussed

                	
                  Avoid

                	
                  For

                	
                  Against

                
	
                  I
                    hereby waive the right to receive 7 days prior notice regarding
                    the
                    Extraordinary Meeting, under section 67 of the Companies Law
                    -
                    1999.

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    authorize and approve the execution and delivery by the Company
                    of the
                    Supplementary Funding Agreement as well as any other agreement
                    or document
                    ancillary to any of the foregoing (collectively, the “Transaction
                    Documents”)

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    issue to the Investors upon and simultaneously with the payment
                    of each
                    Milestone Payment (as such terms is defined in the Supplementary
                    Funding
                    Agreement) Ordinary Shares in such number as set forth in Exhibit
                    C of the
                    Supplementary Funding Agreement

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    the New Articles are hereby approved.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    Mr. Steve Rhodes be, and hereby is, authorized and directed,
                    in the name
                    and on behalf of the Company, to take or cause to be taken any
                    and all
                    such actions, to execute and deliver or cause to be executed
                    and delivered
                    all such documents, instruments and agreements (including the
                    Transaction
                    Documents and the share certificates evidencing the Ordinary
                    Shares issued
                    pursuant to the previous resolution), and to make such filings,
                    in the
                    name and on behalf of the Company, to incur and to pay all such
                    fees and
                    expenses and to engage as he shall in his judgment determine
                    to be
                    necessary, desirable or advisable to carry out fully the intent
                    and
                    purposes of the foregoing resolutions and the execution by Mr.
                    Rhodes of
                    any such document, or the payment of any such expenses or the
                    doing by him
                    of any act in connection with the foregoing matters shall conclusively
                    establish his authority therefore and the approval of the documents
                    so
                    executed, the expenses so paid, the filings so made and the actions
                    so
                    taken.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    all of the actions previously-taken-by any officer of the-Company-in.
                    connection with transactions contemplated by the foregoing resolutions
                    are, and they hereby are, adopted, ratified, confirmed and approved
                    in all
                    respects.

                	
                  o

                	
                  x

                	
                  o

                

        

        

        Signature:    Asaf
          Ben-Arye             

         

        Name:          
          Asaf
          Ben-Arye               

         

        Date:             26/7/07                            

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        (the
          “Company”)

         

        PROXY
          FORM

         

        I,
          the
          undersigned, a shareholder of Scorpion Surgical Technologies Ltd. (the
          “Company”), hereby approve receipt of the notice of the
          Extraordinary Meeting of the shareholders of the Company to be held on
          July 26,
          2007 at 17:00, and irrevocably appoint Mr. Steve Rhodes (with power of
          substitution) to vote on my behalf at such Meeting and at any adjournments
          thereof as follows:

         

        
          	
                  Matter
                    to be Discussed

                	
                  Avoid

                	
                  For

                	
                  Against

                
	
                  I
                    hereby waive the right to receive 7 days prior notice regarding
                    the
                    Extraordinary Meeting, under section 67 of the Companies Law
                    -
                    1999.

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    authorize and approve the execution and delivery by the Company
                    of the
                    Supplementary Funding Agreement as well as any other agreement
                    or document
                    ancillary to any of the foregoing (collectively, the “Transaction
                    Documents”)

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    issue to the Investors upon and simultaneously with the payment
                    of each
                    Milestone Payment (as such terms is defined in the Supplementary
                    Funding
                    Agreement) Ordinary Shares in such number as set forth in Exhibit
                    C of the
                    Supplementary Funding Agreement

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    the New Articles are hereby approved.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    Mr. Steve Rhodes be, and hereby is, authorized and directed,
                    in the name
                    and on behalf of the Company, to take or cause to be taken any
                    and all
                    such actions, to execute and deliver or cause to be executed
                    and delivered
                    all such documents, instruments and agreements (including the
                    Transaction
                    Documents and the share certificates evidencing the Ordinary
                    Shares issued
                    pursuant to the previous resolution), and to make such filings,
                    in the
                    name and on behalf of the Company, to incur and to pay all such
                    fees and
                    expenses and to engage as he shall in his judgment determine
                    to be
                    necessary, desirable or advisable to carry out fully the intent
                    and
                    purposes of the foregoing resolutions and the execution by Mr.
                    Rhodes of
                    any such document, or the payment of any such expenses or the
                    doing by him
                    of any act in connection with the foregoing matters shall conclusively
                    establish his authority therefore and the approval of the documents
                    so
                    executed, the expenses so paid, the filings so made and the actions
                    so
                    taken.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    all of the actions previously-taken-by any officer of the-Company-in.
                    connection with transactions contemplated by the foregoing resolutions
                    are, and they hereby are, adopted, ratified, confirmed and approved
                    in all
                    respects.

                	
                  o

                	
                  x

                	
                  o

                

        

        

        Signature:    /s/
          Ilan Grunberg          

         

        Name:         
           Ilan
          Grunberg                 

         

        Date:            
          26/7/07                            

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        (the
          “Company”)

         

        PROXY
          FORM

         

        I,
          the
          undersigned, a shareholder of Scorpion Surgical Technologies Ltd. (the
          “Company”), hereby approve receipt of the notice of the
          Extraordinary Meeting of the shareholders of the Company to be held on
          July 26,
          2007 at 17:00, and irrevocably appoint Mr. Steve Rhodes (with power of
          substitution) to vote on my behalf at such Meeting and at any adjournments
          thereof as follows:

         

        
          	
                  Matter
                    to be Discussed

                	
                  Avoid

                	
                  For

                	
                  Against

                
	
                  I
                    hereby waive the right to receive 7 days prior notice regarding
                    the
                    Extraordinary Meeting, under section 67 of the Companies Law
                    -
                    1999.

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    authorize and approve the execution and delivery by the Company
                    of the
                    Supplementary Funding Agreement as well as any other agreement
                    or document
                    ancillary to any of the foregoing (collectively, the “Transaction
                    Documents”)

                	
                  o

                	
                  x

                	
                  o

                
	
                  To
                    issue to the Investors upon and simultaneously with the payment
                    of each
                    Milestone Payment (as such terms is defined in the Supplementary
                    Funding
                    Agreement) Ordinary Shares in such number as set forth in Exhibit
                    C of the
                    Supplementary Funding Agreement

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    the New Articles are hereby approved.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    Mr. Steve Rhodes be, and hereby is, authorized and directed,
                    in the name
                    and on behalf of the Company, to take or cause to be taken any
                    and all
                    such actions, to execute and deliver or cause to be executed
                    and delivered
                    all such documents, instruments and agreements (including the
                    Transaction
                    Documents and the share certificates evidencing the Ordinary
                    Shares issued
                    pursuant to the previous resolution), and to make such filings,
                    in the
                    name and on behalf of the Company, to incur and to pay all such
                    fees and
                    expenses and to engage as he shall in his judgment determine
                    to be
                    necessary, desirable or advisable to carry out fully the intent
                    and
                    purposes of the foregoing resolutions and the execution by Mr.
                    Rhodes of
                    any such document, or the payment of any such expenses or the
                    doing by him
                    of any act in connection with the foregoing matters shall conclusively
                    establish his authority therefore and the approval of the documents
                    so
                    executed, the expenses so paid, the filings so made and the actions
                    so
                    taken.

                	
                  o

                	
                  x

                	
                  o

                
	
                  That
                    all of the actions previously-taken-by any officer of the-Company-in.
                    connection with transactions contemplated by the foregoing resolutions
                    are, and they hereby are, adopted, ratified, confirmed and approved
                    in all
                    respects.

                	
                  o

                	
                  x

                	
                  o

                

        

        

        Signature:     /s/
          Nissim Ohana          

         

        Name:           
          Nissim
          Ohana              
 

         

        Date:             
          27/7/07                           

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.2

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company  and Cell Kinetics Ltd., and
          shall have no claim or demand for any kind of Pre-Emptive Rights in connection
          with the abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

         

         

         

        
          	
                  /s/
                    Steve Rhodes

                	 	
                  29.7.07

                
	
                  Name

                	 	
                  Date

                

        

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company  and Cell Kinetics Ltd., and
          shall have no claim or demand for any kind of Pre-Emptive Rights in connection
          with the abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

        
           

           

           

          
            	
                    [Hebrew]

                  	 	 
	 	 	 
	 	 	 
	
                    /s/
                      Steve Rhodes

                  	 	
                    29.7.07

                  
	
                    Name

                  	 	
                    Date

                  

          

           

           

           

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company  and Cell Kinetics Ltd., and
          shall have no claim or demand for any kind of Pre-Emptive Rights in connection
          with the abovementioned issuance of shares.

         

        [Following
          paragraph to be added to TIF’s waiver only]

         

        In
          addition, the undersigned, Trendlines Israel Fund L.P., hereby irrevocably
          waives any and all rights granted to it according to section 6.2 of the
          Founders
          Agreement and agrees that such section shall be null and void as of the
          date
          hereof.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

        
           

           

           

          
            	
                    
                      Trendlines
                        Israel Fund, L.P.

                    

                  	 	 
	 	 	 
	 	 	 
	
                    /s/
                      Steve Rhodes

                  	 	
                    29.7.07

                  
	
                    Name

                  	 	
                    Date

                  

          

           

           

           

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company and Cell Kinetics Ltd., and shall
          have no
          claim or demand for any kind of Pre-Emptive Rights in connection with the
          abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

         

         

        
           

          
            	
                    /s/
                      Nissim Ohana

                  	 	
                    27/7/07

                  
	
                    Name

                  	 	
                    Date

                  

          

           

        

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company and Cell Kinetics Ltd., and shall
          have no
          claim or demand for any kind of Pre-Emptive Rights in connection with the
          abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

         

        
           

           

          
            	
                    /s/
                      Ilan Greenberg

                  	 	
                    26/07/2007

                  
	
                    Name

                  	 	
                    Date

                  

          

           

        

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company and Cell Kinetics Ltd., and shall
          have no
          claim or demand for any kind of Pre-Emptive Rights in connection with the
          abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

         

         

        
           

          
            	
                    /s/
                      Yuval Shezifi

                  	 	
                    26/July/2007

                  
	
                    Name

                  	 	
                    Date

                  

          

           

        

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.2

         

        

         

        PARTICIPATION
          RIGHTS WAIVERS

         

        I
          the
          undersigned, being a shareholder of Scorpion Surgical Technologies Ltd.
          (the
“Company”), hereby waive any pre-emptive rights, over-allotment
          rights or any other participation or first refusal rights under the Company’s
          Articles of Association, under any other instrument including that certain
          Founders Agreement dated March 23, 2007 by and between the incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary.  Misgav Carmiel Technology
          Incubator Management Services Ltd. (51-171135-0).  Trendlines Israel
          Fund L.P., Mr. Nissim Ohana, Mr. Yuval Shezifi, Mr. Han Grunberg and Mr.
          Asaf
          Ben-Ayre), and under any applicable law (together the “Pre-Emptive
          Rights”), with respect to the issuance of Ordinary Shares par value NIS
          0.1 each of the Company, in accordance with that certain Supplementary
          Funding
          Agreement by and between the Company and Cell Kinetics Ltd., and shall
          have no
          claim or demand for any kind of Pre-Emptive Rights in connection with the
          abovementioned issuance of shares.

         

        IN
          WITNESS WHEREOF, the undersigned has executed this Waiver on the date written
          below.

         

         

        
           

          
            	
                    /s/
                      Asaf Ben-Arye

                  	 	
                    26/7/2007

                  
	
                    Name

                  	 	
                    Date

                  

          

           

        

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.3

         

        

         

        EXPANDIS
          WAIVER

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          Expandis

          
            
              

            

          

           

          
 

        

        
          	
                  To:

                	
                  Scorpion
                    Surgical Technologies Ltd. (hereafter
                    Scorpion)

                

        

         

        Further
          to Scorpion’s request and with reference to the fact that Dr. Nissim Ohana, Mr.
          Ilan Grunberg, Dr. Asaf Ben-Arye and Dr. Yuval Shezifi were involved as
          share
          holders and/or employees of Expandis Ltd..

         

        Expandis
          Ltd. hereby warrants and represents that it does not and shall not have
          any
          proprietary rights, including, without limitation, any trade secret, patent,
          copyright, mask work, in and/or to any and all patents, patent applications,
          know-how, knowledge, technology, discoveries, information, biological and/or
          chemical materials, methods, experience and data, descriptions of manufacturing
          processes, schematics, formulae, algorithms, designs of drawings, and other
          forms of intellectual property related to the field of curved spinal fixation
          implants and/or necessary to enable the Company to carry on its business
          as now
          conducted and as shall be proposed to be conducted from time to
          time.  Expandis hereby waives, and forever discharges the Company, its
          shareholders, officers, directors and affiliated corporations, whether
          previously or hereinafter affiliated in any manner, from any and all claims,
          rights, obligations, damages and/or liabilities of any nature whatsoever,
          whether or not now known, suspected or claimed, which Expandis may claim
          to have
          in connection with any proprietary rights related to the field of curved
          spinal
          fixation implants and/or as necessary to enable the Scorpion to carry on
          its
          business as now conducted and as shall be proposed to be conducted from
          time to
          time.

         

        On
          behalf
          of Expandis

         

        

         

        /s/
          Zohar
          Gnedler

        Director

        Date:  29.4.07

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1.4.4

         

         

        ADDENDUM
          TO FOUNDERS AGREEMENT

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          	
                  To:

                	
                  Cell-
                    Kinetics Ltd.

                

        

        
          	
                   

                	
                  2
                    Yodfat St.

                

        

        
          	
                   

                	
                  Lod

                

        

        
        

         

        
          	
                  Re:

                	
                  Letter
                    of Consent

                

        

         

        Reference
          is made to that certain Founders Agreement (the “Founders
          Agreement”) dated March 23, 2007 by and among the Incubator for
          Managing Technology Entrepreneurship Misgav Ltd. (51-222958-4) (“Misgav
          Incubator”) its subsidiary; Misgav Carmiel Technology Incubator
          Management Services Ltd. (51-171135-0) (“Holding Company”) (the
          Holding Company together with the Misgav Incubator shall be referred
          collectively as the “Incubator”), Trendlines Israel Fund L.P., Mr. Nissim Ohana,
          Mr. Yuval Shezifi, Mr. Ilan Grunberg and Mr. Asaf Ben-Arye; and to that
          certain
          Supplementary Funding Agreement (the “Supplementary
          FundingAgreement”) by and among Scorpion Surgical
          Technologies Ltd. (“Scorpion”) and Cell Kinetics Ltd.
          (51-323862-6) (the “Investor”).

         

        The
          undersigned hereby agree and confirms as follows:

         

        
          	
                  1.

                	
                  In
                    the event of a contradiction between the terms and conditions
                    of the
                    Founders Agreement and those contained in the New Articles (as
                    defined
                    under the Supplementary Funding Agreement and Attached hereto
                    as
                    Exhibit A), the terms and conditions of the
                    New
                    Articles shall prevail.

                

        

         

        
          	
                  2.

                	
                  Other
                    than as staled above, the terms and provisions of the Founders
                    Agreement
                    shall remain in full force and
                    effect.

                

        

         

        
          	
                  3.

                	
                  The
                    Incubator hereby confirms that the Investor shall be deemed a
                    third-party
                    beneficiary of the Incubator’s undertakings set forth in sections 4, 7.2,
                    8.1 of the Founders Agreement.

                

        

         

        
          	
                  4.

                	
                  This
                    letter of Consent may be executed in any number of counterparts,
                    each of
                    which shall be deemed an original and enforceable against the
                    parties
                    actually executing such counterpart, and all of which together
                    shall
                    constitute one and the same
                    instrument.

                

        

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

        
          	
                  The
                    Incubator for ManagingTechnology
                    Entrepreneurship Misgav
                    Ltd.

                	 	
                  Misgav
                    Carmiel Technology Incubator
                    Management Services Ltd.

                
	 	 	 
	
                  /s/ Steve
                    Rhodes

                	 	
                  /s/
                    Steve Rhodes

                
	By:     Steve
                  Rhodes	 	By:     Steve
                  Rhodes 
	
                  Title:  CEO

                	 	
                  Title:  CEO

                
	 	 	 
	 	 	 
	
                  Trendlines
                    Israel Fund, L.P.,

                	 	
                  Nissim
                    Ohana

                
	 	 	 
	
                  /s/ Steve
                    Rhodes

                	 	
                  /s/
                    Nissim Ohana

                
	By:     Steve
                  Rhodes	 	
                  Name:   Nissim
                    Ohana

                
	
                  Title:  Managing
                    Partner

                	 	 
	 	 	 
	 	 	 
	
                  Yuval
                    Shezifi

                	 	
                  Ilan
                    Grunberg

                
	 	 	 
	
                  /s/ Yuval
                    Shezifi

                	 	
                  /s/
                    Ilan Greenberg

                
	Name:  Yuval
                  Shezifi	 	Name:  Ilan
                  Greenberg
	
                  26/July/2007

                	 	
                  26/07/07

                
	 	 	 
	 	 	 
	
                  Asaf
                    Ben-Arye

                	 	
                  Steve
                    Rhodes

                
	 	 	 
	
                  /s/
                    Asaf Ben-Arye

                	 	
                  /s/
                    Steve Rhodes

                
	
                  Name:  Asaf
                    Ben-Arye

                	 	
                  Name:  Steve
                    Rhodes

                
	
                   

                	 	
                  
                     

                  

                

        

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            
SCHEDULE
            1.4.5

        

         

        

         

        NEW
          ARTICLES OF ASSOCIATION

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        THE
          COMPANIES LAW - 1999

         

        A
          COMPANY LIMITED BY SHARES

         

        ARTICLES
          OF ASSOCIATION

        OF

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

         

        Preliminary

         

        
          	
                  1.

                	
                  Definitions.

                

        

         

        
          	
                   

                	
                  1.1.

                	
                  Capitalized
                    terms used in these Articles shall bear the meanings ascribed
                    to such
                    terms as set forth in this Article, unless inconsistent with
                    the
                    context:

                

        

         

        
          	
                  Term

                	
                  Definition

                
	 	 
	
                  Articles

                	
                  These
                    Articles of Association as amended from time to time by a Shareholders’
                    resolution;

                
	 	 
	
                  Auditors

                	
                  The
                    auditors of the Company;

                
	 	 
	
                  Board
                    of Directors; Board

                	
                  The
                    Board of Directors of the Company;

                
	 	 
	
                  Cell
                    Kinetics

                	
                  Cell
                    Kinetics Ltd

                
	 	 
	
                  Chairman

                	
                  The
                    Chairman of the Board of Directors, as may be appointed, from
                    time to time
                    (if appointed);

                
	 	 
	
                  Company

                	
                  Scorpion
                    Surgical Technologies Ltd.

                
	 	 
	
                  Companies
                    Law

                	
                  The
                    Companies Law, 1999, or any statutory re-enactment or modification
                    thereof
                    being in force at the time; and any reference to any section
                    or provision
                    of the Companies Law shall be deemed to include a reference to
                    any
                    statutory re-enactment or modification thereof being in force
                    at the
                    time;

                
	 	 
	
                  Companies
                    Ordinance

                	
                  The
                    Companies Ordinance (New Version), 5743-1983, or any statutory
                    re-enactment or modification thereof being in force at the time;
                    and any
                    reference to any section or provision of the Companies Ordinance
                    shall be
                    deemed to include a reference to any statutory re-enactment or
                    modification thereof being in force at the time;

                
	 	 
	
                  Director(s)

                	
                  The
                    member(s) of the Board of Directors appointed in accordance with
                    these
                    Articles holding office at any given time;

                
	 	 
	
                  Entrepreneurs

                	
                  Nissim
                    Ohana, Yuval Shezifi, Ilan Grunberg and Asaf
                    Ben-Arye

                

        

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
 

        
          	
                  Incubator

                	
                  Incubator
                    for Managing Technology Entrepreneurship Misgav Ltd. together
                    with its
                    subsidiary; Misgav Carmiel Technology Incubator Management Services
                    Ltd.

                
	 	 
	
                  IPO

                	
                  As
                    defined in section 18.1 herein.

                
	 	 
	
                  Month

                	
                  Calendar
                    month;

                
	 	 
	
                  OCS

                	
                  Office
                    of Chief Scientist

                
	 	 
	
                  Office

                	
                  The
                    Registered Office of the Company at any given time;

                
	 	 
	
                  Officer
                    (‘Nosei Misra’)

                	
                  As
                    defined in the Companies Law;

                
	 	 
	
                  Register
                    of Shareholders

                	
                  The
                    Register of Shareholders of the Company administered in accordance
                    to
                    Section 127 of the Companies Law;

                
	 	 
	
                  Shareholders

                	
                  The
                    shareholders of the Company, at any given time;

                
	 	 
	
                  TIF

                	
                  Trendlines
                    Israel Fund L.P.

                
	 	 
	
                  in
                    writing

                	
                  Written,
                    printed, photocopied, typed, sent via facsimile or produced by
                    any visible
                    substitute for writing, or partly one and partly another, and
                    signed shall
                    be construed accordingly.

                
	 	 
	
                  Year

                	
                  Calendar
                    year commencing on January 1st
                    and ending
                    on December 31st.

                
	 	 
	
                  Major
                    Shareholder

                	
                  Any
                    holder of more than 5% of the issued and outstanding share capital
                    of the
                    Company (calculated on an as-converted basis).

                
	 	 
	 	
                  For
                    the purpose of calculating the holdings of the Company’s outstanding share
                    capital, the holdings of each of the following groups shall be
                    aggregated:  (i) the Founders and/or any of their Permitted
                    Transferees (as defined herein below), or (ii) TIF, the Incubator,
                    Mr.
                    Steve Rhodes and/or any of their Permitted Transferees.

                
	 	 

        

        
          	
                   

                	
                  1.2.

                	
                  Words
                    denoting the singular number shall include the plural number
                    and vice
                    versa; words denoting the masculine gender shall include the
                    feminine
                    gender; words denoting persons shall include
                    corporations.

                

        

         

        
          	
                   

                	
                  1.3.

                	
                  Save
                    as aforesaid any words or expressions defined in the Companies
                    Law or in
                    the Companies Ordinance (to the extent still in effect according
                    to the
                    provisions of the Companies Law), shall, if not inconsistent
                    with the
                    subject or context, bear the same meaning in these
                    Articles.

                

        

         

        
          	
                   

                	
                  1.4.

                	
                  The
                    captions in these Articles are for convenience only and shall
                    not be
                    deemed a part hereof or affect the construction of any provision
                    hereof.

                

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	
                  2.

                	
                  Private
                    Company.

                

        

         

        The
          Company is a private company, and accordingly:

         

        
          	
                   

                	
                  2.1.

                	
                  the
                    right to transfer shares is restricted in the manner hereinafter
                    prescribed;

                

        

         

        
          	
                   

                	
                  2.2.

                	
                  the
                    number of Shareholders (exclusive of persons who are in the employment
                    of
                    the Company, or of persons who having been formerly in the employment
                    of
                    the Company were, while in such employment, and have continued
                    after the
                    termination of such employment to be, Shareholders of the Company)
                    is
                    limited to 50; provided that where two or more persons hold one
                    or more
                    shares in the Company jointly they shall, for the purpose of
                    this Article,
                    be treated as a single shareholder;

                

        

         

        
          	
                   

                	
                  2.3.

                	
                  any
                    invitation to the public to subscribe for any shares or debentures
                    of the
                    Company is prohibited;

                

        

         

        Limited
          Liability

         

        
          	
                  3.

                	
                  The
                    Company is a Limited Liability Company and therefore each Shareholder’s
                    obligations to the Company’s obligations shall be limited to the payment
                    of the par value of the shares held by such Shareholder, subject
                    to the
                    provisions of the Companies Law.

                

        

         

        Company’s
          Objectives

         

        
          	
                  4.

                	
                  The
                    Company’s objectives are to carry on any business, and do any act, which
                    is not prohibited by law.

                

        

         

        
          	
                  5.

                	
                  The
                    Company may donate a reasonable amount of money for any purpose
                    that the
                    Board of Directors finds appropriate, even if the donation is
                    not for
                    business considerations for the purpose of achieving profits
                    to the
                    Company.

                

        

         

        Share
          Capital

         

        
          	
                  6.

                	
                  Share
                    Capital.

                

        

         

        The
          share
          capital of the Company is NIS 100,000 (one hundred thousand New Israeli
          Shekels)
          divided into 1,000,000 (one million) Ordinary Shares, par value of NIS
          0.10 (ten
          agorot) each (the “Ordinary Shares”).

         

        The
          rights attached to the Ordinary Shares shall be all the rights in the Company
          including, without limitation, the right to receive notices of Shareholders
          meetings, to attend and vote at Shareholders’ meetings, to participate in
          distribution of dividends and stock dividends and to participate in distribution
          of surplus assets and funds in liquidation of the Company.

         

        
          	
                  7.

                	
                  Increase
                    of Share Capital.

                

        

         

        
          	
                   

                	
                  7.1.

                	
                  The
                    Company may, from time to time, by a Shareholders resolution,
                    whether or
                    not all the shares then authorized have been issued, and whether
                    or not
                    all the shares theretofore issued have been called up for payment,
                    increase its share 

                

          	 	 	 

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	 	 	capital
                  by the creation of new shares.  Any such increase shall be in
                  such amount and shall be divided into shares of such nominal amounts,
                  and
                  such shares shall confer such rights and preferences, and shall
                  be subject
                  to such restrictions, as such resolution shall
                  provide.

        

         

        
          	
                   

                	
                  7.2.

                	
                  Except
                    to the extent otherwise provided in such resolution, such new
                    shares shall
                    be subject to all the provisions applicable to the shares of
                    the original
                    capital.

                

        

         

        
          	
                  8.

                	
                  Special
                    Rights; Modifications of
                    Rights.

                

        

         

        Subject
          to the provisions of these Articles and the Companies Law, the Company
          may, from
          time to time, provide for shares with such preferred or deferred rights
          or
          rights of redemption or other special rights and/or such restrictions,
          whether
          in regard to dividends, voting, repayment of share capital or otherwise,
          as may
          be stipulated in such resolution.

         

        
          	
                   

                	
                  8.1.

                	
                  If
                    at any time, the share capital is divided into different classes
                    of
                    shares, the rights attached to any class, unless otherwise provided
                    by
                    these Articles, may be modified or abrogated by the Company,
                    subject to a
                    resolution passed at a separate General Meeting of the holders
                    of the
                    shares of such class.

                

        

         

        
          	
                   

                	
                  8.2.

                	
                  The
                    provisions of these Articles relating to General Meetings shall
                    apply, in
                    the relevant changes, to any separate General Meeting of the
                    holders of
                    the shares of a particular class.

                

        

         

        
          	
                   

                	
                  8.3.

                	
                  Without
                    prejudice, the enlargement of an existing class of shares, or
                    the issuance
                    of additional shares thereof, shall not be deemed, for purposes
                    of this
                    Article 8, to modify or abrogate the rights attached to the previously
                    issued shares of such class or of any other
                    class.

                

        

         

        
          	
                  9.

                	
                  Consolidation,
                    Subdivision, Cancellation and Reduction of Share
                    Capital.

                

        

         

        
          	
                   

                	
                  9.1.

                	
                  The
                    Company may, by Shareholders’ resolution and in accordance with and
                    subject to these Articles and Companies Law, from time to
                    time:

                

        

         

        
          	
                   

                	
                                  9.1.1.

                	
                  consolidate
                    and divide all or any of its issued or unissued share capital
                    into shares
                    of larger nominal value than its existing
                    shares;

                

        

         

        
          	
                   

                	
                                  9.1.2.

                	
                  subdivide
                    its shares (issued or unissued) or any of them, into shares of
                    smaller
                    nominal value than is fixed by these Articles (subject, however,
                    to the
                    provisions of the Companies Law), and the resolution whereby
                    any share is
                    subdivided may determine that, as among the holders of the shares
                    resulting from such subdivision, one or more of the shares may,
                    in
                    contrast to others, have any such preferred or deferred rights
                    or rights
                    of redemption or other special rights, or be subject to any such
                    restrictions, as the Company may attach to unissued or new
                    shares;

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                   

                	
                                  9.1.3.

                	
                  cancel
                    any shares which, at the date of the adoption of such resolution,
                    have not
                    been taken or agreed to be taken by any person, and diminish
                    the amount of
                    its share capital by the amount of the shares so canceled,
                    or

                

        

         

        
          	
                   

                	
                                  9.1.4.

                	
                  reduce
                    its authorized share capital in any
                    manner.

                

        

         

        
          	
                   

                	
                  9.2.

                	
                  With
                    respect to any consolidation of issued shares into shares of
                    larger
                    nominal value, and with respect to any other action which may
                    result in
                    fractional shares, the Board of Directors may settle any difficulty
                    which
                    may arise with regard thereto, as it deems fit, including, inter
                    alia,
                    resort to one or more of the following
                    actions:

                

        

         

        
          	
                   

                	
                                  9.2.1.

                	
                  determine,
                    as to the holder of shares so consolidated, which issued shares
                    shall be
                    consolidated into each share of larger nominal
                    value;

                

        

         

        
          	
                   

                	
                                  9.2.2.

                	
                  allot,
                    in contemplation of or subsequent to such consolidation or other
                    action,
                    such shares or fractional shares sufficient to preclude or remove
                    fractional share holdings;

                

        

         

        
          	
                   

                	
                                  9.2.3.

                	
                  redeem,
                    in the case of redeemable shares, and subject to applicable law,
                    such
                    shares or fractional shares sufficient to preclude or remove
                    fractional
                    share holdings;

                

        

         

        
          	
                   

                	
                                  9.2.4.

                	
                  cause
                    the transfer of fractional shares by certain Shareholders to
                    other
                    Shareholders so as to most expediently preclude or remove any
                    fractional
                    shareholdings, and cause the transferees to pay the transferors
                    the fair
                    value of fractional shares so transferred, and the Board of Directors
                    is
                    hereby authorized to act as agent for the transferors and transferees
                    with
                    power of substitution for purposes of implementing the provisions
                    of this
                    sub-Article 9.2.4.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SHARES

         

        
          	
                  10.

                	
                  Issuance
                    of Share Certificates; Replacement of Lost
                    Certificates.

                

        

         

        
          	
                                 
                    10.1.

                	
                  Share
                    certificates shall be issued under the stamp of the Company and
                    shall bear
                    the signatures of a Director and/or of any other person or persons
                    authorized thereto by the Board of
                    Directors.

                

        

         

        
          	
                                 
                    10.2.

                	
                  Each
                    shareholder shall be entitled to one numbered certificate for
                    all the
                    shares of any class registered in his name, and if the Board
                    of Directors
                    so approves, to several certificates, each for one or more of
                    such
                    shares.  Each certificate shall specify the serial numbers of
                    the shares represented thereby and may also specify the amount
                    paid up
                    thereon.

                

        

         

        
          	
                                 
                    10.3.

                	
                  A
                    share certificate registered in the names of two or more persons
                    shall be
                    delivered to the person first named in the Registrar of Shareholders
                    in
                    respect of such co-ownership.

                

        

         

        
          	
                                 
                    10.4.

                	
                  If
                    a share certificate is defaced, lost or destroyed, it may be
                    replaced,
                    upon payment of such fee, and upon the furnishing of such evidence
                    of
                    ownership and such indemnity, as the Board of Directors may think
                    fit.

                

        

         

        
          	
                  11.

                	
                  Registered
                    Holder.

                

        

         

        Except
          as
          otherwise provided in these Articles, the Company shall be entitled treat
          the
          registered holder of any share as the absolute owner thereof, an accordingly,
          shall not, except as ordered by a court of competent jurisdiction, as required
          by statute, be bound to recognize any equitable or other claim to, interest
          in
          such share on the part of any other person.

         

        
          	
                  12.

                	
                  Allotment
                    of Shares.

                

        

         

        
          	
                                 
                    12.1.

                	
                  The
                    shares, other than the issued and outstanding shares, shall be
                    under the
                    control of the Board of Directors, who shall have the power to
                    allot
                    shares or otherwise dispose of them to such persons, on such
                    terms and
                    conditions (including inter alia terms relating to calls as set
                    forth in
                    Article 14.6 hereof), and either at par or at a premium, or,
                    subject to
                    the provisions of the Companies Law, at a discount, and at such
                    times, as
                    the Board of Directors may think fit, and the power to give to
                    any person
                    the option to acquire from the Company any shares, either at
                    par or at a
                    premium, or, subject as aforesaid, at a discount, during such
                    time and for
                    such consideration as the Board of Directors may think
                    fit.  Such issuance may be made in cash, cash equivalents or for
                    in kind consideration.

                

        

         

        
          	
                                 
                    12.2.

                	
                  The
                    Company may issue shares having the same rights as the existing
                    shares, or
                    having preferred or deferred rights, or rights of redemption,
                    or
                    restricted rights, or any other special right in respect of dividend
                    distributions, voting, appointment or dismissal of directors,
                    return of
                    share capital, distribution of Company’s property, or otherwise, all as
                    determined by the Company from time to time, subject to the provisions
                    of
                    these Articles.

                

        

         

        
          	
                                 
                    12.3.

                	
                  Section
                    290(a) of the Companies Law shall not apply to the
                    Company.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  13.

                	
                  Payment
                    in Installments.

                

        

         

        If
          by the
          terms of allotment of any share, the whole or any part of the price thereof
          shall be payable in installments, every such installment shall, when due,
          be
          paid to the Company by the then registered holder(s) of the share of the
          person(s) entitled thereto.

         

        
          	
                  14.

                	
                  Calls
                    on Shares.

                

        

         

        
          	
                                 
                    14.1.

                	
                  The
                    Board of Directors may, from time to time make such calls as
                    it may think
                    fit upon Shareholders in respect of any sum unpaid in respect
                    of shares
                    held by such Shareholders which is not, by the terms of allotment
                    thereof
                    or otherwise, payable at a fixed time, and each shareholder shall
                    pay the
                    amount of every call so made upon him (and of each installment
                    thereof if
                    the same is payable in installments), to the person(s) and at
                    the time(s)
                    and place(s) designated by the Board of Directors, as any such
                    time(s) may
                    be thereafter extended and/or such person(s) or place(s)
                    changed.  Unless otherwise stipulated in the resolution of the
                    Board of Directors (and in the notice hereafter referred to),
                    each payment
                    in response to a call shall be deemed to constitute a pro rata
                    payment on
                    account of all shares in respect of which such call was
                    made.

                

        

         

        
          	
                                 
                    14.2.

                	
                  Notice
                    of any call shall be given in writing to the shareholder(s) in
                    question
                    not less than fourteen (14) days prior to the time of payment,
                    specifying
                    the time and place of payment, and designating the person to
                    whom such
                    payment shall be made, provided, however, that before the time
                    for any
                    such payment, the Board of Directors may, by notice in writing
                    to such
                    shareholder(s), revoke such call in whole or in part, extend
                    such time, or
                    alter such person and/or place.  In the event of a call payable
                    in installments, only one notice thereof need be
                    given.

                

        

         

        
          	
                                 
                    14.3.

                	
                  If,
                    by the terms of allotment of any share or otherwise, any amount
                    is made
                    payable at any fixed time, every such amount shall be payable
                    at such time
                    as if it were a call duly made by the Board of Directors and
                    of which due
                    notice had been given, and all the provisions herein contained
                    with
                    respect to such calls shall apply to each such
                    amount.

                

        

         

        
          	
                                 
                    14.4.

                	
                  The
                    joint holders of a share shall be jointly and severally liable
                    to pay all
                    calls in respect thereof and all interest payable
                    thereon.

                

        

         

        
          	
                                 
                    14.5.

                	
                  Any
                    amount unpaid in respect of a call shall bear interest from the
                    date on
                    which it is payable until actual payment thereof, at such rate
                    (not
                    exceeding the then prevailing debitory rate charged by leading
                    commercial
                    banks in Israel), and at such time(s) as the Board of Directors
                    may
                    prescribe.

                

        

         

        
          	
                                 
                    14.6.

                	
                  Upon
                    the allotment of shares, the Board of Directors may provide for
                    differences among the allottees of such shares as to the amount
                    of calls
                    and/or the times of payment
                    thereof.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  15.

                	
                  Prepayment.

                

        

         

        With
          the
          approval of the Board of Directors, any shareholder may pay to the Company
          any
          amount not yet payable in respect of his shares, and the Board of Directors
          may
          approve the payment of interest on any such amount until the same would
          be
          payable if it had not been paid in advance, at such rate and time(s) as
          may be
          approved by the Board of Directors.  The Board of Directors may at any
          time cause the Company to repay all or any part of the money so advanced,
          without premium or penalty.  Nothing in this Article 15 shall derogate
          from the right of the Board of Directors to make any call before or after
          receipt by the Company of any such advance.

         

        
          	
                  16.

                	
                  Forfeiture
                    and
                    Surrender.

                

        

         

        
          	
                                 
                    16.1.

                	
                  If
                    any shareholder fails to pay any amount payable in respect of
                    a call, or
                    interest thereon as provided for herein, on or before the day
                    fixed for
                    payment of the same, the Company, by resolution of the Board
                    of Directors,
                    and subject to the provisions of Section 181 of the Companies
                    Law, may at
                    any time thereafter, so long as the said amount or interest remains
                    unpaid, forfeit all or any of the shares in respect of which
                    said call had
                    been made.  Any expense incurred by the Company in attempting to
                    collect any such amount or interest, including, inter alia, attorneys’
                    fees and costs of suit, shall be added to, and shall, for all
                    purposes
                    (including the accrual of interest thereon), constitute a part
                    of the
                    amount payable to the Company in respect of such
                    call.

                

        

         

        
          	
                                 
                    16.2.

                	
                  Upon
                    the adoption of a resolution of forfeiture, the Board of Directors
                    shall
                    cause notice thereof to be given to such shareholder, which notice
                    shall
                    state that, in the event of the failure to pay the entire amount
                    so
                    payable within a period stipulated in the notice (which period
                    shall not
                    be less than fourteen (14) days and which may be extended by
                    the Board of
                    Directors), such shares shall be ipso facto forfeited, provided,
                    however,
                    that, prior to the expiration of such period, the Board of Directors
                    may
                    nullify such resolution of forfeiture, but no such nullification
                    shall
                    stop the Board of Directors from adopting a further resolution
                    of
                    forfeiture in respect of the non-payment of the same
                    amount.

                

        

         

        
          	
                                 
                    16.3.

                	
                  Whenever
                    shares are forfeited as herein provided, all dividends theretofore
                    declared in respect thereof and not actually paid shall be deemed
                    to have
                    been forfeited at the same time.

                

        

         

        
          	
                                 
                    16.4.

                	
                  The
                    Company, by resolution of the Board of Directors, may accept
                    the voluntary
                    surrender of any share.

                

        

         

        
          	
                                 
                    16.5.

                	
                  Any
                    share forfeited or surrendered as provided herein shall become
                    dormant
                    shares (as defined in Section 308 of the Companies Law), and
                    the same,
                    subject to the provisions of these Articles, may be sold, re-allotted
                    or
                    otherwise disposed of as the Board of Directors thinks
                    fit.

                

        

         

        
          	
                                 
                    16.6.

                	
                  Any
                    shareholder whose shares have been forfeited or surrendered shall
                    cease to
                    be a shareholder in respect of the 

                

          	 	 

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	 	forfeited
                  or surrendered shares, but shall, notwithstanding, be liable to
                  pay, and
                  shall forthwith pay, to the Company, all calls, interest and expenses
                  owing upon or in respect of such shares at the time of forfeiture
                  or
                  surrender, together with interest thereon from the time of forfeiture
                  or
                  surrender until actual payment, at the rate prescribed in Article
                  14.5
                  above, unless such shares were sold by the Company, and the Company
                  shall
                  have received in full the amounts specified above in addition to
                  any
                  additional costs of such sale of shares, and the Board of Directors,
                  in
                  its discretion, may enforce the payment of such moneys, or any
                  part
                  thereof, but shall not be under any obligation to do so.  In the
                  event of such forfeiture or surrender, the Company, by resolution
                  of the
                  Board of Directors, may accelerate the date(s) of payment of any
                  or all
                  amounts then owing by the shareholder in question (but not yet
                  due) in
                  respect of all shares owned by such shareholder, solely or jointly
                  with
                  another, and in respect of any other matter or transaction
                  whatsoever.

        

         

        
          	
                                 
                    16.7.

                	
                  The
                    Board of Directors may at any time, before any share so forfeited
                    or
                    surrendered shall have been sold, re-allotted or otherwise disposed
                    of,
                    nullify the forfeiture or surrender on such conditions as it
                    thinks fit,
                    but no such nullification shall stop the Board of Directors from
                    re-exercising its powers of forfeiture pursuant to this Article
                    16.7.

                

        

         

        
          	
                  17.

                	
                  Lien.

                

        

         

        
          	
                                 
                    17.1.

                	
                  Except
                    to the extent the same may be waived or subordinated in writing,
                    the
                    Company shall have a first and paramount lien upon all the shares
                    registered in the name of each Shareholder (without regard to
                    any
                    equitable or other claim or interest in such shares on the part
                    of any
                    other person), and upon the proceeds of the sale thereof, for
                    the call on
                    shares made by the Board of Directors, in respect of unpaid sum
                    relating
                    to shares held by such Shareholder.  Such lien shall extend to
                    all dividends from time to time declared in respect of such
                    share.  Unless otherwise provided, the registration by the
                    Company of a transfer of shares shall not be deemed to be a waiver
                    on the
                    part of the Company of the lien (if any) existing on such shares
                    immediately prior to such transfer.

                

        

         

        
          	
                                 
                    17.2.

                	
                  The
                    Board of Directors may cause the Company to sell any shares subject
                    to
                    such lien when any such debt, liability or engagement has matured,
                    in such
                    manner as the Board of Directors may think fit, but no such sale
                    shall be
                    made unless such debt, liability or engagement has not been satisfied
                    within fourteen (14) days after written notice of the intention
                    to sell
                    shall have been served on such shareholder, his executors or
                    administrators.

                

        

         

        
          	
                                 
                    17.3.

                	
                  The
                    net proceeds of any such sale, after payment of the costs thereof,
                    shall
                    be applied in or toward satisfaction of the debts, liabilities
                    or
                    engagements of such Shareholder (whether or not the same have
                    matured), or
                    any specific part of the same (as the Company may determine),
                    and the
                    residue (if any) shall be paid to the shareholder, his executors,
                    administrators or assigns.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  18.

                	
                  Pre-Emptive
                    Rights

                

        

         

        
          	
                                 
                    18.1.

                	
                  Until
                    the initial public offering of the Company’s securities in any stock
                    exchange (“IPO”), each of the Major Shareholders of the
                    Company (an “Offeree”) shall have the right to maintain
                    their percentage ownership of the issued and outstanding share
                    capital of
                    the Company (calculated on an as-converted basis) immediately
                    prior to any
                    issuance of all future issuances by purchasing a pro rata portion
                    of any
                    such issuance of the share capital of the Company excluding issuances
                    in
                    connection with a merger, consolidation or reorganization of
                    the Company,
                    at the offering price, in accordance with the following
                    terms:

                

        

         

        If
          the
          Company proposes to issue additional securities, it shall give each Offeree
          a
          written notice of its intention to do so (the “Rights Notice”),
          describing the additional securities, the price and the general terms upon
          which
          the Company proposes to issue them.  Each Offeree shall have fourteen
          (14) days from delivery of the Rights Notice to agree to purchase (a) all
          or any
          part of its pro-rata share of such additional securities, which will enable
          it
          to maintain its shareholding percentage of the issued and outstanding share
          capital of the Company (calculated on an as-converted basis) immediately
          prior
          to such issuance (with respect to each Shareholder, the “Respective Pro
          Rata Share”), and (2) all or any part of the Respective Pro-Rata Share
          of any other Stockholder (including for this purpose any Permitted Transferee
          of
          the Stockholder) to the extent that such other Stockholder does not elect
          to
          purchase its full pro-rata share (the “Remainder Pre-Emptive
          Rights”); in each case for the price and upon the terms specified in
          the Rights Notice, by giving written notice to the Company setting forth
          the
          quantity of additional securities which the Offeree wishes to
          purchase.

         

        
          	
                                 
                    18.2.

                	
                  If
                    the Offerees fail to exercise in full their preemptive right
                    by the end of
                    the fourteen (14) Days period mentioned in Article 18.1, and
                    provided that
                    the Shareholders who have exercised their right with respect
                    to their
                    Respective Pro Rata Share have not subscribed for all remaining
                    securities
                    offered by the Company, then the Company shall have ninety (90)
                    days after delivery of the Rights Notice to sell the additional
                    securities
                    not subscribed for at a price and upon general terms no more
                    favorable to
                    the purchasers thereof than specified in the Rights Notice.  If
                    the Company has not sold the additional securities not subscribed
                    for
                    within said ninety (90) day period the Company shall not thereafter
                    issue
                    or sell any additional securities without first offering such
                    securities
                    to the Offerees in the manner provided
                    above.

                

        

         

        
          	
                                 
                    18.3.

                	
                  Subject
                    to the pre-emptive rights under Article 18.1 above, the Company
                    may issue
                    from time to time options, warrants, other rights to subscribe
                    for
                    instruments convertible into, or exchangeable for shares of the
                    Company,
                    the terms and 

                

          	 	 

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	 	conditions
                  of which shall be determined by the Board in accordance with these
                  Articles.  Notwithstanding subsections 18.1-18.3 above, the
                  pre-emptive rights shall not apply to (a) Ordinary Shares issued
                  or
                  reserved for issuance upon exercise of options a plan approved
                  by the
                  Company’s Board of Directors granted to officers, directors, employees
                  or
                  consultants of the Company or a subsidiary; (b) Ordinary Shares
                  issued
                  pursuant to an IPO; (c) shares issued in connection with share
                  splits, the
                  issuance of bonus shares and similar events on the basis of such
                  shareholder’s pro-rata share of all outstanding shares of the Company on
                  an as-if-converted basis.

        

         

        
          	
                                 
                    18.4.

                	
                  The
                    Company shall not be bound to recognize any equitable, contingent,
                    future
                    or partial interest in any share or any other right whatsoever
                    in any
                    share other than any than those appearing in the Company’s Shareholders
                    Registrar.

                

        

         

        
          	
                  19.

                	
                  Sale
                    After Forfeiture or Surrender or in Enforcement of
                    Lien.

                

        

         

        Upon
          any
          sale of shares after forfeiture or surrender or for enforcing a lien, the
          Board
          of Directors may appoint some person to execute an instrument of transfer
          of the
          shares so sold and cause the purchaser’s name to be entered in the Register of
          Shareholders in respect of such shares, and the purchaser shall not be
          bound to
          see to the regularity of the proceedings, or to the application of the
          purchase
          money, and after his name has been entered in the Register of Shareholders
          in
          respect of such shares, the validity of the sale shall not be impeached
          by any
          person, and the remedy of any person aggrieved by the sale shall be in
          damages
          only and against the Company exclusively.

         

        
          	
                  20.

                	
                  Redeemable
                    Shares.

                

        

         

        The
          Company may, subject to applicable law, issue redeemable shares and redeem
          the
          same.

         

        TRANSFER
          OF SHARES

         

        
          	
                  21.

                	
                  Right
                    of First
                    Refusal.

                

        

         

        
          	
                                 
                    21.1.

                	
                  Until
                    the closing of the IPO, any transfer of shares in the Company
                    shall be
                    subject to the following:

                

        

         

        
          	
                   

                	
                                 
                    21.1.1.

                	
                  Any
                    Shareholder proposing to transfer all or any of its shares (the
                    “Offeror”) shall first request the Company, by written
                    notice, to offer such shares (the “Offered Shares”), on
                    the terms of the proposed transfer, to any Major Shareholder
                    of the
                    Company (the “Offerees”).  The Company shall
                    comply with such request by sending the Offerees a written notice
                    (the
                    “Offer”), stating therein the identity of the Offeror
                    and
                    of the proposed transferee(s) and the proposed terms of sale
                    of the
                    Offered Shares.  Any Offeree may accept such offer in respect of
                    all or any of the Offered Shares by giving the Company notice
                    to that
                    effect within fourteen (14) days after being served with the
                    Offer.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                   

                	
                                 
                    21.1.2.

                	
                  If
                    the acceptances, in the aggregate, are in respect of all of,
                    or more than,
                    the Offered Shares, then the accepting Offerees shall acquire
                    the Offered
                    Shares, on the terms aforementioned, in proportion to their respective
                    holdings provided that no Offerees shall be entitled to acquire
                    under the
                    provisions of this Section 21.1.2 more than the number of Offered
                    Shares
                    initially accepted by such Offeree, and upon the allocation to
                    such
                    Offeree of the full number of shares so accepted, such Offeree
                    shall be
                    disregarded in any subsequent computations and allocations
                    hereunder.  Any shares remaining after the computation of such
                    respective entitlements shall be re-allocated among the accepting
                    Offerees
                    (other than those to be disregarded as aforesaid), in the same
                    manner,
                    until one hundred percent (100%) of the Offered Shares have been
                    allocated
                    as aforesaid.

                

        

         

        
          	
                   

                	
                                 
                    21.1.3.

                	
                  If
                    the acceptances, in the aggregate, are in respect of less than
                    the number
                    of Offered Shares, then the accepting Offerees shall not be entitled
                    to
                    acquire the Offered Shares, and the Offeror, at the expiration
                    of the
                    aforementioned fourteen (14)-day period, shall be entitled to
                    transfer all
                    (but not less than all) of the Offered Shares to the proposed
                    transferee(s) identified in the Offer, provided, however, that
                    in no event
                    shall the Offeror transfer any of the Offered Shares to any transferee
                    other than such accepting Offerees or such proposed transferee(s)
                    or
                    transfer the same on terms more favorable to the buyer(s) than
                    those
                    stated in the Offer, and provided further that any of the Offered
                    Shares
                    not transferred within ninety (90) days after the expiration
                    of such
                    fourteen (14) day period shall again be subject to the provisions
                    of this
                    Section 22.

                

        

         

        
          	
                   

                	
                                 
                    21.1.4.

                	
                  For
                    the purposes of any Offer under this Section 21, the respective
                    holdings
                    of any number of accepting Offerees shall mean the respective
                    proportions
                    of the aggregate number of shares.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    21.2.

                	
                  The
                    rights of the Major Shareholders under this Section 21 with respect
                    to any
                    transfer of shares made by any shareholder .is subject to the
                    waiver by
                    the Company on any call or repurchase option the Company may
                    have with
                    respect to shares held by the Other
                    Shareholders

                

        

         

        
          	
                                 
                    21.3.

                	
                  The
                    right of first refusal set forth in this section shall not apply
                    to the
                    following transfers of shares:  (i) with respect to shares held
                    by a shareholder who is an individual, to a corporation wholly
                    owned by
                    such shareholder or the spouse, parent, child or sibling of the
                    respective
                    shareholder; (ii) with respect to shares held by a shareholder
                    that is a
                    corporation, to any entity controlled by, controlling, or under
                    common
                    control with such shareholder, as the term “control” is defined in the
                    Companies Law; (iii) with respect to shares held by a shareholder
                    that is
                    a limited or general partnership, to its partners and affiliated
                    partnerships managed by the same management company or managing
                    (general)
                    partner or by an entity that controls, is controlled by, or is
                    under
                    common control with, such management company or managing (general)
                    partner; (iv) with respect to shares held by the Incubator, to
                    any person
                    who is acting as the general manager of the Incubator; and (v)
                    with
                    respect to shares held by Steve Rhodes, transfer of shares by
                    him to TIF
                    or TIF’s partners and affiliated partnerships managed by the same
                    management company or managing (general) partner or by an entity
                    that
                    controls, is controlled by, or is under common control with,
                    such
                    management company or managing (general) partner (each of (i),(ii)
                    (iii),
                    (iv) and (v) above – a “Permitted
                    Transferee”).

                

        

         

        
          	
                                 
                    21.4.

                	
                  Notwithstanding
                    sections 18 and 21 herein above, the transfer of:  (i) voting
                    rights in the Company; (ii) the right to appoint director in
                    the Company
                    (iii) the right to participate in allocation of Company’s revenues; Is
                    also subject to any applicable law or
                    regulations

                

        

         

        
          	
                  22.

                	
                  Effectiveness
                    and
                    Registration.

                

        

         

        
          	
                                 
                    22.1.

                	
                  No
                    transfer of shares in the Company, and no assignment of an option
                    to
                    acquire such shares from the Company, shall be effective unless
                    the
                    transfer or assignment has been approved by the Board of Directors,
                    such
                    approval shall be at the sole discretion of the Board of
                    Directors.  The Board of Directors may refuse to approve such
                    transfer or assignment without the need to give any
                    reasons.

                

        

         

        
          	
                                 
                    22.2.

                	
                  No
                    such transfer as described in Article 22.1 shall be registered
                    unless a
                    proper instrument of transfer (in form and substance satisfactory
                    to the
                    Board of Directors) has been submitted to the Company, together
                    with the
                    share certificate(s) and such other evidence of title as the
                    Board of
                    Directors may reasonably require.  Until the transferee has been
                    registered in the Register of Shareholders in respect of the
                    shares so
                    transferred, the Company may continue to regard the transferor
                    as the
                    owner thereof.  The Board of Directors, may, from time to time,
                    prescribe a fee for the registration of a
                    transfer.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  23.

                	
                  Tag-Along.

                

        

         

        
          	
                                 
                    23.1.

                	
                  Subject
                    to Article 23(4) and until the closing of the Company’s IPO, upon transfer
                    of any shares by the Entrepreneurs (the “Tag Along
                    Seller”) The Incubator, TIF, Cell Kinetics and any of their
                    Permitted Transferees (if such Permitted Transferees hold shares
                    in the
                    Company) (each a “Participator” and collectively the
                    “Participators”) shall, for a period of four years
                    commencing on April 1, 2007, have the right to notify the Tag
                    Along Seller
                    of its intention to exercise its Tag Along Right pursuant to
                    this Article
                    23 (the “Tag Along Notice”).  Following the Tag
                    Along.  Notice, Participators shall add to the shares being sold
                    by the Tag Along Seller to such proposed purchaser thereof (the
                    “Proposed Purchaser”), up to all of their shares in the
                    Company and upon the same terms and conditions under which the
                    Tag Along
                    Seller’s shares will be sold.

                

        

         

        
          	
                                 
                    23.2.

                	
                  In
                    the event that the Participators exercise their rights hereunder,
                    the Tag
                    Along Seller must cause the Proposed Purchaser to add such shares
                    to the
                    Offered Shares to be purchased by the Proposed Purchaser, as
                    part of the
                    sale agreement, or reduce the number of securities that it proposes
                    to
                    sell to the Proposed Purchaser (in which case, all the Participators
                    in
                    the sale to the Proposed Purchaser shall contribute the identical
                    portion
                    of securities relative to their total shareholding, on a fully
                    diluted
                    as-converted basis), and either conclude the transaction in accordance
                    with such revised structure or withdraw from completing the
                    transaction.

                

        

         

        
          	
                                 
                    23.3.

                	
                  The
                    Company undertakes not to register any Transfer of its shares
                    on its
                    books, unless the parties hereto fully comply with the provisions
                    of this
                    Article 23.

                

        

         

        
          	
                                 
                    23.4.

                	
                  Anything
                    in this Article 23 to the contrary notwithstanding, each of the
                    Company’s
                    shareholders may freely transfer (without the need to comply
                    with the
                    provisions of this Article 23) any of his/her/its shares in the
                    Company to
                    his respective Permitted Transferee, provided that such Permitted
                    Transferee has agreed in writing to assume the obligations of
                    the Offeror
                    under these Articles and all agreements with the Company in its
                    capacity
                    as a Shareholder, including all restrictions on further
                    transfer.

                

        

         

        
          	
                  24.

                	
                  No
                    Sale;
                    Limitations.

                

        

         

        During
          the period in which the Company operates within the framework of the Incubator,
          each of the Entrepreneurs shall not be permitted to sell, transfer, assign,
          pledge, encumber or otherwise dispose of (each, a “Transfer”)
          any of his shares in the Company.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  25.

                	
                  Suspension
                    of
                    Registration.

                

        

         

        The
          Board
          of Directors may suspend the registration of transfers during the fourteen
          (14)
          days immediately preceding the Annual General Meeting.

         

        Transmission
          of Shares

         

        
          	
                  26.

                	
                  Decedent’s
                    Shares.

                

        

         

        
          	
                                 
                    26.1.

                	
                  In
                    case of a share registered in the names of two or more holders,
                    the
                    Company shall recognize the survivor(s) as the sole owner(s)
                    thereof
                    unless and until the provisions of Article 26.20 have been effectively
                    invoked.

                

        

         

        
          	
                                 
                    26.2.

                	
                  Any
                    person becoming entitled to a share in consequence of the death
                    of any
                    person, upon producing evidence of the grant of probate or letters
                    of
                    administration or declaration of succession shall be registered
                    as a
                    shareholder in respect of such share, or may, subject to the
                    regulations
                    as to transfer herein contained, transfer such
                    share.

                

        

         

        
          	
                  27.

                	
                  Receivers
                    And
                    Liquidators.

                

        

         

        
          	
                                 
                    27.1.

                	
                  The
                    Company may recognize the receiver or liquidator of any corporate
                    shareholder in winding-up or dissolution, or the receiver or
                    trustee in
                    bankruptcy of any shareholder, as being entitled to the shares
                    registered
                    in the name of such shareholder.

                

        

         

        
          	
                                 
                    27.2.

                	
                  The
                    receiver or liquidator of a corporate shareholder in winding-up
                    or
                    dissolution, or the receiver or trustee in bankruptcy of any
                    shareholder,
                    upon producing such evidence as the Board of Directors may deem
                    sufficient
                    that he sustains the character in respect of which he proposes
                    to act
                    under this Article or of his title, shall with the consent of
                    the Board of
                    Directors (which the Board of Directors may grant or refuse in
                    its
                    absolute discretion), be registered as a .shareholder in respect
                    of such
                    shares, or may, subject to the regulations as to transfer herein
                    contained, transfer such shares.

                

        

         

        General
          Meetings

         

        
          	
                  28.

                	
                  Annual
                    General
                    Meeting.

                

        

         

        An
          Annual
          General Meeting shall be held once in every calendar year at such time
          (within a
          period of not more than fifteen (15) months after the last preceding Annual
          General Meeting) and at such place either within or without the State of
          Israel
          as may be determined by the Board of Directors.

         

        
          	
                  29.

                	
                  Extraordinary
                    General
                    Meetings.

                

        

         

        All
          General Meetings other than the Annual General Meetings shall be called
          “Extraordinary General Meetings”.  The Board of
          Directors may, whenever it thinks fit, convene an Extraordinary General
          Meeting
          at such time and place, within or without the State of Israel, as may be
          determined by the Board of Directors, and shall be obliged to do so upon
          a
          requisition in writing in accordance with Section 63 of the Companies
          Law.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  30.

                	
                  Notice
                    of General Meetings; Omission to Give Notice; Record
                    Date.

                

        

         

        
          	
                                 
                    30.1.

                	
                  Not
                    less than seven (7) days’ prior notice shall be given of every General
                    Meeting.  Each such notice shall specify the place and the day
                    and hour of the meeting and the general nature of each item to
                    be acted
                    upon thereat.  Notice shall be given to all Shareholders who
                    would be entitled to attend and vote at such meeting, if it were
                    held on
                    the date when such notice is issued.  Anything herein to the
                    contrary notwithstanding, with the consent of all Shareholders
                    entitled to
                    vote thereon, a resolution may be proposed and passed at such
                    meeting
                    although a lesser notice than hereinabove prescribed has been
                    given.

                

        

         

        
          	
                                 
                    30.2.

                	
                  The
                    accidental omission to give notice of a meeting to any shareholder
                    or the
                    non-receipt of notice sent to such shareholder, shall not invalidate
                    the
                    proceedings at such meeting.

                

        

         

        
          	
                                 
                    30.3.

                	
                  Unless
                    otherwise specified in these Articles, the Board of Directors
                    shall
                    specify a record date for determining the identity of the Shareholders
                    entitled to receive notices of Shareholders meetings, vote in
                    such
                    meetings and for any other matter with regard to the rights of
                    the
                    Shareholders, including without limitation, the rights with regard
                    to
                    distribution of dividends.

                

        

         

        Proceedings
          at General Meetings

         

        
          	
                  31.

                	
                  Quorum.

                

        

         

        
          	
                                 
                    31.1.

                	
                  Shareholder(s)
                    (not in default in payment of any sum referred to in Article
                    37.1 hereof),
                    present in person, by audio or video conference so long as each
                    Shareholder participating in such call can hear, and be heard
                    by, each
                    other Shareholders participating in such General Meeting, or
                    by proxy and
                    holding shares conferring in the aggregate a majority of the
                    voting power
                    of the Company including at least the representative appointed
                    by the
                    Incubator or TIF, a representative appointed by the Entrepreneurs
                    and the
                    representative appointed by Cell
                    Kinetics.

                

        

         

        
          	
                                 
                    31.2.

                	
                  Two
                    or more shareholders, which at least one of them is the representative
                    appointed by Cell Kinetics (not in default in payment of any
                    sum referred
                    to in these Articles), present in person or by proxy and holding
                    shares
                    conferring in the aggregate a majority of the voting power of
                    the Company,
                    shall constitute a quorum at General Meetings.  No business
                    shall be transacted at a General Meeting, or at any adjournment
                    thereof,
                    unless the requisite quorum is present when the meeting proceeds
                    to
                    business.

                

        

         

        
          	
                                 
                    31.3.

                	
                  Shareholders
                    entitled to be present and vote at a General Meeting may participate
                    in a
                    General Meeting by means of audio or video conference or similar
                    communications equipment by means of which all persons participating
                    in
                    the meeting can hear each other, and such participation in a
                    meeting shall
                    constitute attendance in person at the
                    meeting.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    31.4.

                	
                  If
                    within an hour from the time appointed for the meeting a quorum
                    is not
                    present, the meeting, if convened upon requisition under Sections
                    63 or 64
                    of the Companies Law, shall be dissolved, but in any other case
                    it shall
                    stand adjourned to the same day in the next week, at the same
                    time and
                    place, or to such day and at such time and place as the Chairman
                    may
                    determine with the consent of the holders of a majority of the
                    voting
                    power represented at the meeting in person or by proxy and voting
                    on the
                    question of adjournment.  No business shall be transacted at any
                    adjourned meeting except business, which might lawfully have
                    been
                    transacted at the meeting as originally called.  At such
                    adjourned meeting, any two (2) Shareholders (not in default as
                    aforesaid)
                    present in person or by proxy, shall constitute a
                    quorum.

                

        

         

        
          	
                  32.

                	
                  Chairman.

                

        

         

        The
          Shareholders present shall choose someone of their number to be Chairman
          of the
          General Meeting.  The office of Chairman shall not, by itself, entitle
          the holder thereof to vote at any General Meeting nor shall it entitle
          such
          holder to a second or casting vote (without derogating, however, from the
          rights
          of such Chairman to vote as a shareholder or proxy of a shareholder if,
          in fact,
          he is also a shareholder or such proxy).

         

        
          	
                  33.

                	
                  Adoption
                    of Resolutions at General
                    Meetings.

                

        

         

        
          	
                                 
                    33.1.

                	
                  Subject
                    to the provisions of section 81 below, a Shareholders resolution
                    shall be
                    deemed adopted if approved by the holders of a majority of the
                    voting
                    power represented at the Shareholders meeting in person or by
                    proxy and
                    voting thereon.

                

        

         

        
          	
                                 
                    33.2.

                	
                  Every
                    question submitted to a General Meeting shall be decided by a
                    show of
                    hands, but if a written ballot is demanded by any shareholder
                    present in
                    person or by proxy and entitled to vote at the meeting, the same
                    shall be
                    decided by such ballot.  A written ballot may be demanded before
                    the proposed resolution is voted upon or immediately after the
                    declaration
                    by the Chairman of the results of the vote by a show of
                    hands.  If a vote by written ballot is taken after such
                    declaration, the results of the vote by a show of hands shall
                    be of no
                    effect, and the proposed resolution shall be decided by such
                    written
                    ballot.  The demand for a written ballot may be withdrawn at any
                    time before the same is conducted, in which event another shareholder
                    may
                    then demand such written ballot.  The demand for a written
                    ballot shall not prevent the continuance of the meeting for the
                    transaction of business other than the question on which the
                    written
                    ballot has been demanded.

                

        

         

        
          	
                                 
                    33.3.

                	
                  A
                    declaration by the Chairman of the meeting that a resolution
                    has been
                    carried unanimously, or carried by a particular majority, or
                    lost, and an
                    entry to that effect in the minute book of the Company, shall
                    be
                    conclusive evidence of the fact without proof of the number or
                    proportion
                    of the votes recorded in favor of or against such
                    resolution.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  34.

                	
                  Resolutions
                    in
                    Writing.

                

        

         

        A
          resolution in writing signed by all of the Shareholders then entitled to
          attend
          and vote at General Meetings or to which all such Shareholders have given
          their
          written consent (by letter, facsimile, telecopier, telegram, telex or otherwise)
          or their oral consent by telephone or otherwise (provided that a written
          summary
          thereof has been approved and signed by the Chairman), shall be deemed
          to have
          been unanimously adopted by a General Meeting duly convened and
          held.

         

        
          	
                  35.

                	
                  Power
                    To
                    Adjourn.

                

        

         

        
          	
                                 
                    35.1.

                	
                  The
                    Chairman of a General Meeting at which a quorum is present may,
                    with the
                    consent of the holders of a majority of the voting power represented
                    in
                    person or by proxy and voting on the question of adjournment
                    (and shall if
                    so directed by the meeting), adjourn the meeting from time to
                    time and
                    from place to place, but no business shall be transacted at any
                    adjourned
                    meeting except business which might lawfully have been transacted
                    at the
                    meeting as originally called.

                

        

         

        
          	
                                 
                    35.2.

                	
                  It
                    shall not be necessary to give any notice of an adjournment,
                    unless the
                    meeting is adjourned for a date which is more than twenty-one
                    (21) days,
                    in which event notice thereof shall be given in the manner required
                    for
                    the meeting as originally called.

                

        

         

        
          	
                  36.

                	
                  Voting
                    Power.

                

        

         

        Subject
          to any provision hereof conferring special rights as to voting, or restricting
          the right to vote, every Shareholder shall have one vote for each share
          held by
          him of record, on every resolution, without regard to whether the vote
          thereon
          is conducted by a show of hands, by written ballot or by any other
          means.

         

        
          	
                  37.

                	
                  Voting
                    Rights.

                

        

         

        
          	
                                 
                    37.1.

                	
                  No
                    shareholder shall be entitled to vote at any General Meeting
                    (or be
                    counted as a part of the quorum thereat), unless all calls and
                    other sums
                    then payable by him in respect of his shares in the Company have
                    been
                    paid.

                

        

         

        
          	
                                 
                    37.2.

                	
                  A
                    company or other corporate body being a shareholder of the Company
                    may
                    authorize any person to be its representative at any meeting
                    of the
                    Company.  Any person so authorized shall be entitled to exercise
                    on behalf of such shareholder all the power, which the latter
                    could have
                    exercised if it were an individual shareholder.  Upon the
                    request of the Chairman of the meeting, written evidence of such
                    authorization (in form acceptable to the Chairman) shall be delivered
                    to
                    him.

                

        

         

        
          	
                                 
                    37.3.

                	
                  Any
                    shareholder entitled to vote may vote either personally or by
                    proxy (who
                    need not be a shareholder of the Company), or, if the shareholder
                    is a
                    company or other corporate body, by a representative authorized
                    pursuant
                    to Article 37.2.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    37.4.

                	
                  If
                    two or more persons are registered as joint holders of any share,
                    the vote
                    of the senior who tenders a vote, in person or by proxy, shall
                    be accepted
                    to the exclusion of the vote(s) of the other joint holder(s);
                    and for this
                    purpose seniority shall be determined by the orders in which
                    the names
                    stand in the Register of
                    Shareholders.

                

        

         

        Proxies

         

        
          	
                  38.

                	
                  Instrument
                    of
                    Appointment.

                

        

         

        
          	
                                 
                    38.1.

                	
                  The
                    instrument appointing a proxy shall be in writing and shall be
                    substantially in the following form or in any usual or common
                    form or in
                    such other form as may be approved by the Board of
                    Directors.  It shall be duly signed by the appointer or his duly
                    authorized attorney or, if such appointer is a company or other
                    corporate
                    body, under its common seal or stamp by its duly authorized agent(s)
                    or
                    attorney(s):

                

        

         

        “I,
          ____________________________ of ________________________________

        (Name
          of
          Shareholder)                                                   (Address
          of Shareholder)

        being
          a
          shareholder of __________________________(the “Company”),
          hereby 

        appoint(s)
          _____________________ of _________________________________

        (Name
          of
          Proxy)                                                   (Address
          of Proxy)

         

        As
          my
          proxy, to vote for me and on my behalf at the General Meeting of the

        Company
          to be held on the _____ day of _____, 20__, and at any adjournment(s)

        thereof.

         

        Signed
          this ___ day of _____________, 20__

         

        _________________________________________

        (Signature
          of Appointer)”

         

        
          	
                  38.2.

                	
                  The
                    instrument appointing a proxy (and the power of attorney or other
                    authority, if any, under which such instrument has been signed)
                    shall
                    either be delivered to the Company (at its Office, or at its
                    principal
                    place of business or at such place as the Board of Directors
                    may specify)
                    not less than forty-eight (48) hours before the time fixed for
                    the meeting
                    at which the person named in the instrument proposes to vote,
                    or presented
                    to the Chairman at such meeting.

                

        

         

        
          	
                  39.

                	
                  Effect
                    of Death Of Appointer or Revocation of
                    Appointment.

                

        

         

        A
          vote
          cast pursuant to an instrument appointing a proxy shall be valid notwithstanding
          the previous death of the appointing shareholder (or of his attorney-in-fact,
          if
          any, who signed such instrument), or the revocation of the appointment
          or the
          transfer of the share in respect of which the vote is cast, provided no
          written
          intimation of such death, revocation or transfer shall have been received
          by the
          Company or by the Chairman of the meeting before such vote is cast and
          provided,
          further, that the appointing shareholder, if present in person at said
          meeting,
          may revoke the appointment by means of a writing, oral notification to
          the
          Chairman, or otherwise.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        BOARD
          OF DIRECTORS

         

        
          	
                  40.

                	
                  Powers
                    of Board of
                    Directors.

                

        

         

        
          	
                                 
                    40.1.

                	
                  In
                    General.  In addition to all powers and authorities of the
                    Board of Directors as specified in the Companies Law, the determination
                    of
                    the Company’s policy, and the supervision of the General Manager and the
                    Company’s officers shall be vested in the Board of
                    Directors.  In addition, the Board of Directors may exercise all
                    such powers and do all such acts and things as the Company is
                    authorized
                    to exercise and do, and are not hereby or by law required to
                    be exercised
                    or done by the Company in General Meeting or by the General Manager
                    or the
                    Chief Executive Officer of the Company (the “General
                    Manager”) under his express or residual authority.  The
                    authority conferred on the Board of Directors by this Article
                    40.1 shall
                    be subject to the provisions of the Companies Law, these Articles
                    and any
                    regulation or resolution consistent with these Articles adopted
                    from time
                    to time by the Company in General Meeting, provided, however,
                    that no such
                    regulation or resolution shall invalidate any prior act done
                    by or
                    pursuant to a decision of the Board of Directors which would
                    have been
                    valid if such regulation or resolution had not been
                    adopted.

                

        

         

        
          	
                                 
                    40.2.

                	
                  Borrowing
                    Power.  The Board of Directors may from time to time, in its
                    discretion, cause the Company to borrow or secure the payment
                    of any sum
                    or sums of money for the purposes of the Company, and may secure
                    or
                    provide for the repayment of such sum or sums in such manner,
                    at such
                    times and upon such terms and conditions in all respects as it
                    thinks fit,
                    and, in particular, by the issuance of bonds, perpetual or redeemable
                    debentures, debenture stock, or any mortgages, charges, or other
                    securities on the undertaking or the whole or any part of the
                    property of
                    the Company, both present and future, including its uncalled
                    or called but
                    unpaid capital for the time being.

                

        

         

        
          	
                                 
                    40.3.

                	
                  Reserves.  The
                    Board of Directors may, from time to time, set aside any amount(s)
                    out of
                    the profits of the Company as a reserve or reserves for any purpose(s)
                    which the Board of Directors, in its absolute discretion, shall
                    think fit,
                    and may invest any sum so set aside in any manner and from time
                    to time
                    deal with and vary such investments, and dispose of all or any
                    part
                    thereof, and employ any such reserve or any part thereof in the
                    business
                    of the Company without being bound to keep the same separate
                    from other
                    assets of the Company, and may subdivide or re-designate any
                    reserve or
                    cancel the same or apply the funds therein for another purpose,
                    all as the
                    Board of Directors may from time to time think
                    fit.

                

        

         

        
          	
                  41.

                	
                  Exercise
                    of Powers of Directors; Written
                    Resolution.

                

        

         

        
          	
                                 
                    41.1.

                	
                  A
                    meeting of the Board of Directors at which a quorum is present
                    shall be
                    competent to exercise all the authorities, powers and discretion
                    vested in
                    or exercisable by the Board of
                    Directors.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                   

                	
                                 
                    41.1.1.

                	
                  Subject
                    to section 81 below, a resolution proposed at any meeting of
                    the Board of
                    Directors shall be deemed adopted if approved by a simple majority
                    of the
                    Directors present when such resolution is put to a vote and voting
                    thereon, with each Director entitled to one vote.  The office of
                    Chairman of the Board of Director shall not, by itself, entitle
                    the holder
                    thereof to a second or a casting
                    vote.

                

        

         

        
          	
                                 
                    41.2.

                	
                  The
                    Board of Directors may adopt resolutions, without convening a
                    meeting of
                    the Board of Directors, provided that all directors then in office
                    and
                    lawfully entitled to participate in the discussion on the proposed
                    matter
                    and to vote thereon (as conclusively determined by the chairman
                    of the
                    Board of Directors) have given their written consent not to convene
                    a
                    meeting on such matters.  Minutes of such resolutions, including
                    the resolution not to convene a meeting, shall be signed by the
                    chairman
                    of the Board of Directors.

                

        

         

        
          	
                  42.

                	
                  Delegation
                    of Powers;
                    Committees.

                

        

         

        
          	
                                 
                    42.1.

                	
                  The
                    Board of Directors may, subject to the provisions of the Companies
                    Law,
                    delegate any or all of its powers to committees, each consisting
                    of two or
                    more members, and it may from time to time revoke such delegation
                    or alter
                    the composition of any such committee.  Any Committee so formed
                    (in these Articles referred to as a “Committee of the Board of
                    Directors”), shall, in the exercise of the powers so delegated,
                    conform to any regulations imposed on it by the Board of
                    Directors.  The meeting and proceeding of any such Committee of
                    the Board of Directors shall be governed, in the relevant changes,
                    by the
                    provisions herein contained for regulating the meetings of the
                    Board of
                    Directors, so far as not superseded by any regulations adopted
                    by the
                    Board of Directors under this Article.  Unless otherwise
                    expressly provided by the Board of Directors in delegating powers
                    to a
                    Committee of the Board of Directors, such Committee shall not
                    be empowered
                    to further delegate powers.

                

        

         

        
          	
                                 
                    42.2.

                	
                  The
                    Board of Directors may, subject to the provisions of the Companies
                    Law,
                    from time to time appoint a Secretary to the Company, as well
                    as officers,
                    agents, employees and independent contractors, as the Board of
                    Directors
                    may think fit, and may terminate the service of any such
                    person.  The Board of Directors may, subject to the provisions
                    of the Companies Law, determine the powers and duties, as well
                    as the
                    salaries and emoluments, of all such persons, and may require
                    security in
                    such cases and in such amounts as it thinks
                    fit.

                

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    42.3.

                	
                  The
                    Board of Directors may from time to time, by power of attorney
                    or
                    otherwise, appoint any person, company, firm or body of persons
                    to be the
                    attorney or attorneys of the Company at law or in fact for such
                    purpose(s)
                    and with such powers, authorities and discretion, and for such
                    period and
                    subject to such conditions, as it thinks fit, and any such power
                    of
                    attorney or other appointment may contain such provisions for
                    the
                    protection and convenience of persons dealing with any such attorney
                    as
                    the Board of Directors may think fit, and may also authorize
                    any such
                    attorney to delegate all or any of the powers, authorities and
                    discretion
                    vested in him.

                

        

         

        
          	
                  43.

                	
                  Board
                    Composition.

                

        

         

        
          	
                                 
                    43.1.

                	
                  As
                    long as the Company is working within the framework of the Incubator,
                    the
                    Board shall consist of up to six (6) members, as
                    follows:

                

        

         

        
          	
                   

                	
                                  43.1.1.

                	
                  one
                    (1) director shall be appointed by the
                    Incubator;

                

        

         

        
          	
                   

                	
                                  43.1.2.

                	
                  one
                    (1) director shall be appointed by
                    TIF;

                

        

         

        
          	
                   

                	
                                  43.1.3.

                	
                  two
                    (2) directors shall be appointed by the Entrepreneurs;
                    and

                

        

         

        
          	
                   

                	
                                  43.1.4.

                	
                  one
                    (1) director shall be appointed by Cell Kinetics.  Such right
                    shall be valid until the later of:  (a) its shareholding
                    percentage in the Company falls below 10% or (b) the Company
                    ceases to
                    work within the framework of the
                    Incubator.

                

        

         

        
          	
                   

                	
                                  43.1.5.

                	
                  One
                    external director appointed by agreement of the remaining
                    directors.

                

        

         

        
          	
                  44.

                	
                  Appointment
                    and Removal of
                    Directors.

                

        

         

        Appointment,
          removal and replacement of Directors shall be effected by furnishing written
          notification to the Company at its principal office, and shall become effective
          on the later of, the date fixed in such notice or, upon delivery of the
          notice
          to the Company.  Each Director shall continue to serve as a Director
          of the Company (subject to the provisions of Article 47 below) until such
          time
          as another Director is appointed as his successor.

         

        
          	
                  45.

                	
                  Qualification
                    of
                    Directors.

                

        

         

        No
          person
          shall be disqualified as a Director by reason of his not holding shares
          in the
          Company.

         

        
          	
                  46.

                	
                  Continuing
                    Directors in the Event of
                    Vacancies.

                

        

         

        In
          the
          event of one or more vacancies in the Board of Directors, the continuing
          Directors may continue to act in every matter, and, pending the filling
          of any
          vacancy pursuant to the provisions of Article 47, may temporarily fill
          any such
          vacancy, provided, however, that if they number less than a majority of
          the
          number provided for pursuant to Article 43 hereof, they may only act in
          an
          emergency, and may call a General Meeting of the Company for the purpose
          of
          electing Directors to fill any or all vacancies, so that at least a majority
          of
          the number of Directors provided for pursuant to Article 43 hereof are
          in office
          as a result of said meeting.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  47.

                	
                  Vacation
                    of
                    Office.

                

        

         

        
          	
                                 
                    47.1.

                	
                  The
                    office of a Director shall be vacated, ipso facto, upon his death,
                    if he
                    is found to be legally incompetent, if he become bankrupt, if
                    the Director
                    is a company, upon its winding-up, if he is prevented by applicable
                    law
                    from serving as a Director, or if his directorship expires pursuant
                    to
                    these Articles and/or applicable
                    law.

                

        

         

        
          	
                                 
                    47.2.

                	
                  The
                    office of the Director shall be vacated by his written
                    resignation.  Such resignation shall become effective on the
                    date fixed therein, or upon the delivery thereof to the Company,
                    whichever
                    is later.

                

        

         

        
          	
                  48.

                	
                  Remuneration
                    of
                    Directors.

                

        

         

        A
          Director may be paid remuneration by the Company for his services as Director,
          subject to the provisions of the Companies Law.

         

        
          	
                  49.

                	
                  Conflict
                    of
                    Interests.

                

        

         

        Subject
          to the provisions of the Companies Law and these Articles, the Company
          may enter
          into any contract or otherwise transact any business with any Director
          in which
          contract or business such Director has a personal interest, directly or
          indirectly; and may enter into any contract of otherwise transact any business
          with any third party in which contract or business a Director has a personal
          interest, directly or indirectly.

         

        
          	
                  50.

                	
                  Alternate
                    Directors.

                

        

         

        
          	
                                 
                    50.1.

                	
                  Subject
                    to the provisions of the Companies Law, a Director may, by written
                    notice
                    to the Company, appoint an alternate for himself (in these Articles
                    referred to as “Alternate Director”), remove such
                    Alternate Director and appoint another Alternate Director in
                    place of any
                    Alternate Director appointed by him whose office has been vacated
                    for any
                    reason whatsoever.  Unless the appointing Director, by the
                    instrument appointing an Alternate Director or by written notice
                    to the
                    Company, limits such appointment to a specified period of time
                    or
                    restricts it to a specified meeting or action of the Board of
                    Directors,
                    or otherwise restricts its scope, the appointment shall be for
                    an
                    indefinite period, and for all
                    purposes.

                

        

         

        
          	
                                 
                    50.2.

                	
                  Any
                    notice given to the Company pursuant to Article 50.1 shall become
                    effective on the date fixed therein, or upon the delivery thereof
                    to the
                    Company, whichever is later.

                

        

         

        
          	
                                 
                    50.3.

                	
                  An
                    Alternate Director shall have all the rights and obligations
                    of the
                    Director who appointed him, provided, however, that he may not
                    in turn
                    appoint an alternate for himself (unless the instrument appointing
                    him
                    otherwise expressly provides), and provided further that an Alternate
                    Director shall have no standing at any meeting of the Board of
                    Directors
                    or any committee thereof while the Director who appointed him
                    is
                    present.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    50.4.

                	
                  Any
                    natural person may act as an Alternate Director.  One person may
                    not act as Alternate Director for several
                    directors.

                

        

         

        
          	
                                 
                    50.5.

                	
                  An
                    Alternate Director shall be responsible for his own acts and
                    defaults, as
                    provided in the Companies Law.

                

        

         

        
          	
                                 
                    50.6.

                	
                  The
                    office of an Alternate Director shall be vacated under the circumstances,
                    mutatis mutandis, set forth in Article 47 and such office shall
                    ipso facto
                    be vacated if the Director who appointed such Alternate Director
                    ceases to
                    be a Director.

                

        

         

        PROCEEDINGS
          OF THE BOARD OF DIRECTORS

         

        
          	
                  51.

                	
                  Meetings.

                

        

         

        
          	
                                 
                    51.1.

                	
                  The
                    Board of Directors may meet and adjourn its meetings at such
                    places either
                    within or without the State of Israel and otherwise regulate
                    such meetings
                    and proceedings as the Directors think fit.  Subject to all of
                    the other provisions of these Articles concerning meetings of
                    the Board of
                    Directors, the Board of Directors may meet by audio or video
                    conference so
                    long as each Director participating in such call can hear, and
                    be heard
                    by, each other Director participating in such
                    call.  Additionally, the Board shall convene at least once in
                    each calendar quarter.

                

        

         

        
          	
                                 
                    51.2.

                	
                  Any
                    Director may at any time, and the Secretary, upon the request
                    of such
                    Director, shall, convene a meeting of the Board of Directors,
                    but not less
                    than four (4) business days’ written notice shall be given of any meeting,
                    unless such notice is waived in writing by all of the Directors
                    as to a
                    particular meeting or unless the matters to be discussed at such
                    meeting
                    is of such urgency and importance that notice ought reasonably
                    to be
                    waived under the circumstances.

                

        

         

        
          	
                  52.

                	
                  Quorum.

                

        

         

        
          	
                                 
                    52.1.

                	
                  Until
                    otherwise unanimously decided by the Board of Directors, a quorum
                    at a
                    meeting of the Board of Directors shall be constituted by the
                    presence (in
                    person, via audio or video conference, or by proxy) of the majority
                    of
                    Directors then in office, including at least one Director appointed
                    by the
                    Incubator or TIF, one Director appointed by the Entrepreneurs
                    and one
                    Director appointed by Cell
                    Kinetics.

                

        

         

        
          	
                                 
                    52.2.

                	
                  If
                    within an hour from the time appointed for the meeting a quorum
                    is not
                    present, the meeting shall stand adjourned to the same day in
                    the next
                    week, at the same time and place, or to such day and at such
                    time and
                    place as the Chairman may determine with the consent of the majority
                    of
                    the Directors present.  No business shall be transacted at any
                    adjourned meeting except business which might lawfully have been
                    transacted at the meeting as originally called.  At such
                    adjourned meeting, any two (2) members present in person or represented
                    by
                    an Alternate Director shall constitute a
                    quorum.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  53.

                	
                  Chairman
                    of the Board of
                    Directors.

                

        

         

        The
          Board
          of Directors may from time to time elect one of its members to be the Chairman
          of the Board of Directors, remove such Chairman from office and appoint
          another
          in its place.  The Chairman of the Board of Directors shall preside at
          every meeting of the Board of Directors, but if there is no such Chairman,
          or if
          at any meeting he is not present within fifteen (15) minutes of the time
          fixed
          for the meeting, or if he is unwilling to take the chair, the Directors
          present
          shall choose one of their number to be the chairman of such
          meeting.  The office of the Chairman shall not, by itself, entitle the
          holder thereof to a second or casting vote.

         

        
          	
                  54.

                	
                  Validity
                    of Acts Despite
                    Defects.

                

        

         

        Subject
          to the provisions of the Companies Law, all acts done bona fide at any
          meeting
          of the Board of Directors, or of a Committee of the Board of Directors,
          or by
          any person(s) acting as Director(s), shall, notwithstanding that it may
          afterwards be discovered that there was some defect in the appointment
          of the
          participants in such meetings or any of them or any person(s) acting as
          aforesaid, or that they or any of them were disqualified, be as valid as
          if
          there were no such defect or disqualification.

         

        GENERAL
          MANAGER

         

        
          	
                  55.

                	
                  General
                    Manager.

                

        

         

        
          	
                                 
                    55.1.

                	
                  The
                    Board of Directors may from time to time appoint one or more
                    persons,
                    whether or not Directors, as General Manager(s) of the Company
                    and may
                    confer upon such person(s), and from time to time modify or revoke,
                    such
                    title(s) (including Chief Executive Officer, Managing Director,
                    General
                    Manager(s), Director General or any similar or dissimilar title)
                    and such
                    duties and authorities of the Board of Directors as the Board
                    of Directors
                    may deem fit, subject to such limitations and restrictions as
                    the Board of
                    Directors may from time to time prescribe and subject to the
                    provisions of
                    the Companies Law.  Such appointment(s) may be either for a
                    fixed term or without any limitation of time, and the Board of
                    Directors
                    may from time to time (subject to the provisions of the Companies
                    Law, and
                    of any contract between any such person and the Company) fix
                    his or their
                    salaries and emoluments, remove or dismiss him or them from office
                    and
                    appoint another or others in his or their place or
                    places.

                

        

         

        
          	
                                 
                    55.2.

                	
                  Subject
                    to the resolutions of the Company’s Board of Directors, the management and
                    the operation of the Company’s affairs and business in accordance with the
                    policy determined by the Company’s Board of Directors shall be vested in
                    the General Manager, in addition to all powers and authorities
                    of the
                    General Manager, as specified in the Companies Law.  Without
                    derogating from the above, all powers of management and executive
                    authorities which were not vested by the Companies Law or by
                    these
                    Articles in another organ of the Company shall be vested in the
                    General
                    Manager, subject to the resolutions of the Company’s Board of
                    Directors.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        MINUTES

         

        
          	
                  56.

                	
                  Minutes.

                

        

         

        
          	
                                 
                    56.1.

                	
                  Minutes
                    of each General Meeting and of each meeting of the Board of Directors
                    shall be recorded and duly entered in books provided for that
                    purpose.  Such minutes shall set forth the names of the persons
                    present at the meeting and all resolutions adopted
                    thereat.

                

        

         

        
          	
                                 
                    56.2.

                	
                  Any
                    minutes as aforesaid, if purporting to be signed by the Chairman
                    of the
                    meeting or by the Chairman of the next succeeding meeting, shall
                    constitute prima facie evidence of the matters recorded
                    therein.

                

        

         

        DIVIDENDS

         

        
          	
                  57.

                	
                  Declaration
                    of
                    Dividends.

                

        

         

        Subject
          to the Companies w, the Board of Directors may from time to time declare
          and
          cause the Company to pay, such interim dividend as may appear to the Board
          of
          Directors to be justified by the profits of the Company.  The final
          dividend in respect of any fiscal period shall be proposed by the Board
          of
          Directors and shall be payable only after the same has been approved by
          a
          Shareholders’ resolution, but no such resolution shall provide for the payment
          of an amount exceeding that proposed by the Board of Directors for the
          payment
          of such final dividend, and no such resolution or any failure to approve
          a final
          dividend shall affect any interim dividend theretofore declared and
          paid.  The Board of Directors shall determine the time for payment of
          such dividends, both interim and final, and the record date for determining
          the
          Shareholders entitled thereto.

         

        
          	
                  58.

                	
                  Funds
                    Available for Payment of
                    Dividends.

                

        

         

        No
          dividend shall be paid other than out of the profits of the
          Company.

         

        
          	
                  59.

                	
                  Amount
                    Payable by Way of
                    Dividends.

                

        

         

        Subject
          to the rights of the holders of shares with special rights as to dividends,
          any
          dividend paid by the Company shall be allocated among the Shareholders
          entitled
          thereto in proportion to the respective holdings of the shares in respect
          of
          which such dividend is being paid.

         

        
          	
                  60.

                	
                  Interest.

                

        

         

        No
          dividend shall carry interest as against the Company.

         

        
          	
                  61.

                	
                  Payment
                    in
                    Specie.

                

        

         

        Upon
          the
          declaration of a dividend in accordance with Article 57, a dividend may
          be paid,
          wholly or partly, by the distribution of specific assets of the Company
          or by
          distribution of paid up shares, debentures or debenture stock of the Company
          or
          of any other companies, or in any one or more of such ways.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  62.

                	
                  Capitalization
                    of Profits, Reserves,
                    etc.

                

        

         

        Upon
          the
          recommendation of the Board of Directors approved by a Shareholders’ resolution,
          the Company:

         

        
          	
                                 
                    62.1.

                	
                  may
                    cause any moneys, investments, or other assets forming part of
                    the
                    undivided profits of the Company, standing to the credit of a
                    reserve
                    fund, or to the credit of a reserve fund for the redemption of
                    capital, or
                    in the hands of the Company and available for dividends, or representing
                    premiums received on the issuance of shares and standing to the
                    credit of
                    the share premium account, to be capitalized and distributed
                    among such of
                    the Shareholders as would be entitled to receive the same if
                    distributed
                    by way of dividend and in the same proportion, on the footing
                    that they
                    become entitled thereto as capital, or may cause any part of
                    such
                    capitalized fund to be applied on behalf of such Shareholders
                    in paying up
                    in full, either at par or at such premium as the resolution may
                    provide,
                    any unissued shares or debentures or debenture stock of the Company
                    which
                    shall be distributed accordingly, in payment, in full or in part,
                    of the
                    uncalled liability on any issued share or debentures or debenture
                    stock;
                    and

                

        

         

        
          	
                                 
                    62.2.

                	
                  may
                    cause such distribution or payment to be accepted by such Shareholders
                    in
                    full satisfaction of their interest in the said capitalized
                    sum.

                

        

         

        
          	
                  63.

                	
                  Implementation
                    of Powers Under Articles 61 and
                    62.

                

        

         

        For
          the
          purpose of giving full effect to any resolution under Articles 61 and 62,
          the
          Board of Directors may settle any difficulty which may arise in regard
          to the
          distribution as it thinks expedient, and, in particular, may issue fractional
          certificates, and may fix the value for distribution of any specific assets,
          and
          may determine that cash payments shall be made to any Shareholders upon
          the
          footing of the value so fixed, or that fractions of less value than the
          nominal
          value of one share may be disregarded in order to adjust the rights of
          all
          parties, and may vest any such cash, shares, debentures, debenture stock
          or
          specific assets in trustees upon such trusts for the persons entitled to
          the
          dividend or capitalized fund as may seem expedient to the Board of
          Directors.  Where requisite under the Companies Law, a proper contract
          shall be filed, and the Board of Directors may appoint any person to sign
          such
          contract on behalf of the persons entitled to the dividend or capitalized
          fund.

         

        
          	
                  64.

                	
                  Deductions
                    from
                    Dividends.

                

        

         

        The
          Board
          of Directors may deduct from any dividend or other moneys payable to any
          Shareholder in respect of a share any and all sums of money then payable
          by him
          to the Company on account of calls or otherwise in respect of shares of
          the
          Company and/or on account of any other matter of transaction
          whatsoever.

         

        
          	
                  65.

                	
                  Retention
                    of Dividends.

                

        

         

        
          	
                                 
                    65.1.

                	
                  The
                    Board of Directors may retain any dividend or other moneys payable
                    or
                    property distributable in respect of a share on which the Company
                    has a
                    lien, and may apply the same in or toward satisfaction of the
                    debts,
                    liabilities, or engagements in respect of which the lien
                    exists.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    65.2.

                	
                  The
                    Board of Directors may retain any dividend or other moneys payable
                    or
                    property distributable in respect of a share in respect of which
                    any
                    person is, under Articles 26 or 27, entitled to become a shareholder,
                    or
                    which any person is, under said Articles, entitled to transfer,
                    until such
                    person shall become a shareholder in respect of such share or
                    shall
                    transfer the same.

                

        

         

        
          	
                  66.

                	
                  Unclaimed
                    Dividends.

                

        

         

        All
          unclaimed dividends or other moneys payable in respect of a share may be
          invested or otherwise made use of by the Board of Directors for the benefit
          of
          the Company until claimed.  The payment by the Directors of any
          unclaimed dividend or such other moneys into a separate account shall not
          constitute the Company a trustee in respect thereof, and any dividend unclaimed
          after a period of seven (7) years from the date of declaration of such
          dividend,
          and any such other moneys unclaimed after a like period from the date the
          same
          were payable, shall be forfeited and shall revert to the Company, provided,
          however, that the Board of Directors may, at its discretion, cause the
          Company
          to pay any such dividend or such other moneys, or any part thereof, to
          a person
          who would have been entitled thereto had the same not reverted to the
          Company.

         

        
          	
                  67.

                	
                  Mechanics
                    of
                    Payment.

                

        

         

        Any
          dividend or other moneys payable in cash in respect of a share may be paid
          by
          check or warrant sent through the post to, or by transfer to a bank account
          specified by such person (or, if two or more persons are registered as
          joint
          holders of such share or are entitled jointly thereto in consequence of
          the
          death or bankruptcy of the holder or otherwise, to any one of such persons
          or to
          his bank account), or to such person and at such address as the person
          entitled
          thereto may be writing direct.  Every such check or warrant shall be
          made payable to the order of the person to whom it is sent, or to such
          person as
          the person entitled thereto as aforesaid may direct, and payment of the
          check or
          warrant by the banker upon whom it is drawn shall be a good discharge to
          the
          Company.  Every such check or warrant shall be sent at the risk of the
          person entitled to the money represented thereby.

         

        
          	
                  68.

                	
                  Receipt
                    from a Joint
                    Holder.

                

        

         

        If
          two or
          more persons are registered as joint holders of any share, or are entitled
          jointly thereto in consequence of the death or bankruptcy of the holder
          or
          otherwise, any one of them may give effectual receipts for any dividend
          or other
          moneys payable or property distributable in respect of such share.

         

        ACCOUNTS

        
          	
                  69.

                	
                  Books
                    of
                    Account.

                

        

         

        The
          Board
          of Directors shall cause accurate books of account to be kept in accordance
          with
          the provisions of the Companies Law, and of any other applicable
          law.  Such books of account shall be kept at the Registered Office of
          the Company, or at such other place or places as the Board of Directors
          may
          think fit, and they shall always be open to inspection by all
          Directors.  No shareholder, not being a Director, shall have any right
          to inspect any account or book or other similar document of the Company,
          except
          as conferred by law or authorized by the Board of Directors.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  70.

                	
                  Audit.

                

        

         

        At
          least
          once in every fiscal year the accounts of the Company shall be audited
          and the
          correctness of the profit and loss account and balance sheet certified
          by one or
          more duly qualified auditors.

         

        
          	
                  71.

                	
                  Auditors.

                

        

         

        The
          appointment, authorities, rights and duties of the Auditor(s) of the Company,
          shall be regulated by applicable law, provided, however, that in exercising
          its
          authority to fix the remuneration of the auditor(s), the Shareholders in
          General
          Meeting may act (and in the absence of any action in connection therewith
          shall
          be deemed to have so acted) to authorize the Board of Directors to fix
          such
          remuneration subject to such criteria or standards, if any, as may be provided
          in such resolution, and if no such criteria or standards are so provided,
          such
          remuneration shall be fixed in an amount commensurate with the volume and
          nature
          of the services rendered by such auditor(s).

         

        BRANCH
          REGISTERS

         

        
          	
                  72.

                	
                  Branch
                    Registers.

                

        

         

        Subject
          to and in accordance with the provisions of the Companies Law and to all
          orders
          and regulations issued thereunder, the Company may cause branch registers
          to be
          kept in any place outside Israel as the Board of Directors may think fit,
          and,
          subject to all applicable requirements of law, the Board of Directors may
          from
          time to time adopt such rules and procedures as it may think fit in connection
          with the keeping of such branch registers.

         

        RIGHTS
          OF SIGNATURE AND STAMP

         

        
          	
                  73.

                	
                  Rights
                    of Signature and
                    Stamp.

                

        

         

        
          	
                                 
                    73.1.

                	
                  The
                    Board of Directors shall be entitled to authorize any person
                    or persons
                    (who need not be Directors) to act and sign on behalf of the
                    Company, and
                    the acts and signature of such person(s) on behalf of the Company
                    shall
                    bind the Company insofar as such person(s) acted and signed within
                    the
                    scope of his or their authority.

                

        

         

        
          	
                                 
                    73.2.

                	
                  The
                    Company shall have at least one official
                    stamp.

                

        

         

        NOTICES

         

        
          	
                  74.

                	
                  Notices.

                

        

         

        
          	
                                 
                    74.1.

                	
                  Any
                    written notice or other document may be served by the Company
                    on any
                    shareholder either personally or by sending it by prepaid registered
                    mail
                    addressed to such shareholder at his address as described in
                    the Register
                    of Shareholders or such other address as he may have designated
                    in writing
                    for the receipt of notices and other
                    documents.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    74.2.

                	
                  Any
                    written notice or other document may be served by any shareholder
                    upon the
                    Company by tendering the same in person to the Secretary or the
                    General
                    Manager of the Company at the principal office of the Company
                    or by
                    sending it by prepaid registered mail (airmail if posted outside
                    Israel)
                    to the Company at its Office.

                

        

         

        
          	
                                 
                    74.3.

                	
                  Any
                    such notice or other document, shall be deemed to have been served
                    on two
                    (2) business days after it has been posted (seven (7) business
                    days if
                    sent to a place not located on the same continent as the place
                    from where
                    it was posted), or when actually received by the addressee if
                    sooner than
                    two days or seven days, as the case may be, after it has been
                    posted, or
                    when actually tendered in person, to such shareholder (or to
                    the Secretary
                    or the General Manager), or one business day after transmission
                    if it has
                    been sent by cablegram, facsimile or other electronic means with
                    electronic confirmation of delivery or when actually received
                    by such
                    shareholder (or by the Company), whichever is earlier.  If a
                    notice is, in fact, received by the addressee, it shall be deemed
                    to have
                    been duly served, when received, notwithstanding that it was
                    defectively
                    addressed or failed, in some respect, to comply with the provisions
                    of
                    this Article.

                

        

         

        
          	
                                 
                    74.4.

                	
                  All
                    notices to be given to the Shareholders shall, with respect to
                    any share
                    to which persons are jointly entitled, be given to whichever
                    of such
                    persons is named first in the Register of Shareholders, and any
                    notice so
                    given shall be sufficient notice to the holders of such
                    share.

                

        

         

        
          	
                                 
                    74.5.

                	
                  Any
                    shareholder whose address is not specified in the Register of
                    Shareholders, and who shall not have designated an address for
                    the receipt
                    of notices, shall not be entitled to receive any notice from
                    the
                    Company.

                

        

         

        INSURANCE
          AND INDEMNITY

         

        
          	
                  75.

                	
                  Insurance.

                

        

         

        Subject
          to the provisions of the Companies Law and to the extent permitted under
          law,
          and subject further to Article 78, the Company may enter into a contract
          for the
          insurance of all or part of the liability of any Officer imposed on him
          in
          consequence of an act which he has performed by virtue of being an Officer,
          including, in respect of one of the following:

         

        
          	
                                 
                    75.1.

                	
                  a
                    breach of his duty of care to the Company or to another
                    person;

                

        

         

        
          	
                                 
                    75.2.

                	
                  a
                    breach of his fiduciary duty to the Company, provided that the
                    Officer
                    acted in good faith and had reasonable cause to assume that such
                    act would
                    not prejudice the interests of the
                    Company;

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    75.3.

                	
                  a
                    financial obligation imposed on him in favor of another
                    person.

                

        

         

        
          	
                                 
                    75.4.

                	
                  any
                    other circumstances arising under the law with respect to which
                    the
                    Company may, or will be able to, insure an Officer ‘of the
                    Company.

                

        

         

        
          	
                  76.

                	
                  Indemnity.

                

        

         

        
          	
                   

                	
                                  76.1.

                	
                  Subject
                    to the provisions of the Companies Law and to the extent permitted
                    under
                    law, and subject further to Article 78, the Company may indemnify
                    an
                    Officer, retroactively, in respect of the following liabilities
                    or
                    expenses, imposed on such Officer or incurred by him in consequence
                    of an
                    act which he has performed by virtue of being an
                    Officer:

                

        

         

        
          	
                   

                	
                                  76.1.1.

                	
                  a
                    financial obligation imposed on him in favor of another person
                    by a court
                    judgment, including a compromise judgment or an arbitrator’s award
                    approved by court;

                

        

         

        
          	
                   

                	
                                  76.1.2.

                	
                  reasonable
                    litigation expenses, including attorneys’ fees, incurred by an Officer as
                    a result of an investigation or a proceeding instituted against
                    him by an
                    authority that is authorized to conduct an investigation or proceeding,
                    and that was concluded without filing an indictment against the
                    Officer
                    and without imposing on the Officer a financial obligation in
                    lieu of a
                    criminal proceeding, or that was concluded without filing an
                    indictment
                    against the Officer but with imposing a financial obligation
                    in lieu of a
                    criminal proceeding in an offence that does not require proof
                    of mens
                    rea.  In this section “conclusion of a proceeding without
                    filing an indictment in a matter in which a criminal investigation
                    has
                    been instigated” and “financial liability in lieu of a criminal
                    proceeding” shall mean as ascribed under the Companies
                    Law.

                

        

         

        
          	
                   

                	
                                  76.1.3.

                	
                  reasonable
                    litigation expenses, including attorneys’ fees, incurred by an Officer or
                    charged to him by a court, in a proceeding instituted against
                    him by the
                    Company or on its behalf or by another person, or in a criminal
                    charge
                    from which he was acquitted or in which he was convicted of an
                    offence
                    that does not require proof of mens
                    rea.

                

        

         

        
          	
                   

                	
                                  76.1.4.

                	
                  any
                    other circumstances arising under the law in respect of which
                    the Company
                    may, indemnify an Officer of the
                    Company.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    76.2.

                	
                  Subject
                    to the provisions of the Companies Law and to the extent permitted
                    under
                    law, and subject further to Article 78, the Company may undertake
                    to
                    indemnify an Officer, in advance, in respect of the following
                    liabilities
                    or expenses, imposed on such Officer or incurred by him in consequence
                    of
                    an act which he has performed by virtue of being an
                    Officer:

                

        

         

        
          	
                   

                	
                                  76.2.1.

                	
                  As
                    set forth in Article 76.1.1, provided that the undertaking to
                    indemnity
                    shall be limited to events which the Board of Directors believes
                    are
                    predictable in light of the Company’s business de facto at the time the
                    undertaking to indemnify is granted, and to amounts or criterion
                    that the
                    Board of Directors had determined to be reasonable in the circumstances,
                    and that the undertaking to indemnity shall specify such predictable
                    event
                    and the amounts or criterion so
                    determined.

                

        

         

        
          	
                   

                	
                                  76.2.2.

                	
                  As
                    set forth in Articles 76.1.2 to
                    76.1.4.

                

        

         

        
          	
                  77.

                	
                  Release.

                

        

         

        Subject
          to the provisions of the Companies Law and to the extent permitted under
          law,
          and subject further to Article 78, the Company may release, in advance,
          an
          Officer, from all or any part of the liability due to damages arising out
          of the
          breach of duty of care towards the Company.

         

        
          	
                  78.

                	
                  General.

                

        

         

        
          	
                                 
                    78.1.

                	
                  Notwithstanding
                    anything to the contrary contained herein and subject to applicable
                    law,
                    these Articles are not intended, and shall not be interpreted,
                    to restrict
                    the Company in any manner in respect of the procurement of insurance
                    and/or in respect of
                    indemnification:

                

        

         

        
          	
                   

                	
                                  78.1.1.

                	
                  in
                    connection with any person who is not an Officer, including,
                    without
                    limitation, any employee, agent, consultant or contractor of
                    the Company
                    who is not an Officer, and/or

                

        

         

        
          	
                   

                	
                                  78.1.2.

                	
                  in
                    connection with any Officer to the extent that such insurance
                    and/or
                    indemnification is not specifically prohibited under
                    law;

                

        

         

        provided
          that if the Company has an Audit Committee, the procurement of any such
          insurance and/or the provision of any such indemnification shall be approved
          by
          the Audit Committee of the Company.

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                                 
                    78.2.

                	
                  Notwithstanding
                    anything to the contrary in these Articles or any other agreement
                    or
                    instrument, and to extent restricted under law, the Company shall
                    not
                    insure, indemnify or release the Officer from the
                    following:

                

        

         

        
          	
                   

                	
                                  78.2.1.

                	
                  A
                    breach of his fiduciary duty, other than as specified in Article
                    75.2.

                

        

         

        
          	
                   

                	
                                  78.2.2.

                	
                  A
                    breach of his duty of care committed intentionally or
                    recklessly.

                

        

         

        
          	
                   

                	
                                  78.2.3.

                	
                  An
                    action taken with the intent of realizing unlawful personal
                    gain.

                

        

         

        
          	
                   

                	
                                  78.2.4.

                	
                  A
                    fine or penalty imposed on him.

                

        

         

        
          	
                  79.

                	
                  Any
                    amendment to the Companies Law or other applicable law adversely
                    affecting
                    the right of any Officer to be indemnified, insured or released
                    pursuant
                    to Articles 75 to 78 above shall be prospective in effect, and
                    shall not
                    affect the Company’s obligation or ability to indemnify or insure an
                    Officer for any act or omission occurring prior to such amendment,
                    unless
                    otherwise provided by applicable
                    law.

                

        

         

        WINDING
          UP

         

        
          	
                  80.

                	
                  Winding
                    Up.

                

        

         

        
          	
                                 
                    80.1.

                	
                  If
                    the Company be wound up, then, subject to applicable law and
                    to the rights
                    of the holders of shares with special rights upon winding up,
                    the assets
                    of the Company available for distribution among the Shareholders
                    as such
                    shall first be distributed to the Shareholders entitled thereto
                    an amount
                    equal to the paid-up capital attributable to their respective
                    holdings of
                    the shares in respect of which such distribution is being made,
                    provided,
                    however, that if such assets do not suffice to make such distribution
                    in
                    full, such assets shall be distributed to said Shareholders in
                    proportion
                    to the paid-up capital attributable to their respective holdings
                    of such
                    shares.  The paid-up capital attributable to any share issued at
                    a premium or at a lawful discount shall be the nominal value
                    of such
                    share, provided, however, that if less than the full issuance
                    price of
                    such share has been paid to the Company, the paid-up capital
                    attributable
                    thereto shall be such proportion of the nominal value as the
                    amount paid
                    to the Company bears to such full issuance
                    price.

                

        

         

        
          	
                                 
                    80.2.

                	
                  The
                    assets, if any, remaining after the distribution pursuant to
                    Article 80.1
                    hereof, shall, subject to applicable law and to the rights of
                    the holders
                    of shares with special rights as aforesaid, be distributed to
                    the
                    Shareholders entitled thereto in proportion to the nominal value
                    of their
                    respective holdings of the shares in respect of which such distribution
                    is
                    being made, whether or not the issuance price, or any portion
                    thereof, has
                    been paid.

                

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  81.

                	
                  Negative
                    Covenants.

                

        

         

        
          	
                                 
                    81.1.

                	
                  Notwithstanding
                    anything to the contrary in these Articles, until the later of
                    (i) the
                    date on which the Company ceases to work within the framework
                    of the
                    Incubator; or (ii) March 31, 2009, any action or resolution of
                    the
                    Company’s general meeting, or of the Board (or any committee thereof),
                    as
                    applicable, regarding the issues set forth herein shall require
                    the
                    consent of the Incubator or the director appointed by the Incubator,
                    as
                    applicable:

                

        

         

        
          	
                   

                	
                                  81.1.1.

                	
                  The
                    working relations between the Company and the
                    Incubator;

                

        

         

        
          	
                   

                	
                                  81.1.2.

                	
                  The
                    management of funds received from the
                    OCS;

                

        

         

        
          	
                   

                	
                                  81.1.3.

                	
                  Approval
                    of the annual Budget;

                

        

         

        
          	
                   

                	
                                  81.1.4.

                	
                  Any
                    adoption, amendment and modification of signatory rights on behalf
                    of the
                    Company;

                

        

         

        
          	
                   

                	
                                  81.1.5.

                	
                  Any
                    issuance of shares, options to purchase shares or any other securities
                    of
                    the Company that results in a down
                    round;

                

        

         

        
          
            	
                     

                  	
                                    81.1.6.

                  	
                    
                      Any  adoption,
                        amendment
                        or modification of the
                        ESOP;

                    

                  

          

           

        

        
          	
                   

                	
                                  81.1.7.

                	
                  Approval
                    of and any amendment of terms of employment of the Entrepreneurs,
                    or the
                    hiring, dismissal or change in the terms of employment of any
                    senior
                    employees of the Company;

                

        

         

        
          	
                   

                	
                                  81.1.8.

                	
                  The
                    approval of any material transaction of the Company or any transaction
                    out
                    of the ordinary course of business.

                

        

         

        
          	
                   

                	
                                  81.1.9.

                	
                  Replacement
                    of registered office and place of business of the Company or
                    adoption of
                    additional place of business.

                

        

         

        
          	
                                 
                    81.2.

                	
                  Notwithstanding
                    anything to the contrary in these Articles, until the later of
                    (i) the
                    date on which the Company ceases to work within the framework
                    of the
                    Incubator; (ii) March 31, 2009 or (iii) the shareholdings of
                    Cell Kinetics
                    fall below 10% of the Company’s issued share capital, any action or
                    resolution of the Company’s general meeting, or of the Board (or any
                    committee thereof), as applicable, regarding the issues set forth
                    herein
                    shall require the consent of Cell Kinetics or the director appointed
                    by
                    Cell Kinetics, as applicable:

                

        

         

        
          	
                   

                	
                                  81.2.1.

                	
                  Any
                    issuance of shares, options to purchase shares or any other securities
                    of
                    the Company at a price per share lower than the price per share
                    payable by
                    the Investor hereunder;

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          
            
              	
                       

                    	
                      
                                        81.2.2.

                      

                    	
                      
                        Any  adoption,
                          amendment
                          or modification of the
                          ESOP;

                      

                    

            

             

          

        

        
          	
                   

                	
                                  81.2.3.

                	
                  The
                    approval of any material transaction of the Company or any transaction
                    out
                    of the ordinary course of business;

                

        

         

        
          	
                   

                	
                                  81.2.4.

                	
                  Any
                    transaction with an interested party, as defined in the Companies’
                    Law;

                

        

         

        
          	
                   

                	
                                  81.2.5.

                	
                  Approval
                    of the annual budget of the Company and/or effects any deviation
                    therefrom;

                

        

         

        
          	
                   

                	
                                  81.2.6.

                	
                  Incurrence,
                    assumption, or creation of any indebtedness for borrowed money
                    in excess
                    of NIS 50,000 per annum, or guaranteed any indebtedness for borrowed
                    money
                    of any other person, or capital contribution to or investment
                    in any
                    person.

                

        

         

         

        ***************

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE
          1.4.6

         

        

         

        SHARE
          CERTIFICATES AND SHAREHOLDERS LEDGER

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          

          

        

         

        
          	
                  Number
                    of Shares

                	 	
                  Certificate
                    Number

                
	
                  6,666

                	
                  O-8

                

        

         

        SCORPION
          SURGICAL TECHNOLOGIES LTD.

        SHARE
          CERTIFICATE              
[HEBREW]

         

        
          	
                  THIS
                    IS TO CERTIFY that

                	
                  Cell
                    Kinetics Ltd.

                	
                  [HEBREW]

                
	 	 	 
	
                  is
                    (are) the Registered Holder(s) of

                	
                  6,666

                	
                  [HEBREW]

                
	 	 	 
	
                  Ordinary
                    Shares of the Company, par value NIS 0.10 each, fully
                    paid.

                	 	
                  [HEBREW]

                
	 	 	 
	
                  In
                    accordance with the Articles of Association of the Company

                	 	
                  [HEBREW]

                
	 	 	 
	
                  This
                    26 day of July, 2007

                	 	
                  [HEBREW]

                
	 	
                  Director:                                [HEBREW]

                  Steve
                    Rhodes

                	 

        

        
        

         

         

         

        
          

        

        
          

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	
                   

                	
                  SCORPION
                    SURGICAL TECHNOLOGIES LTD.

                	
                  SHARE
                    REGISTER

                
	
                  No.

                	
                  Name

                	
                  ID

                	
                  Address

                	
                  Number
                    of shares

                	
                  Par
                    Value

                	
                  Type
                    of shares

                	
                  date
                    of issuance

                	
                  status

                
	
                  O-1

                	
                  Steve
                    Rhodes

                	
                  01573602-8

                	
                  Teradion,
                    Misgav, Israel

                	
                  3,000

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-2

                	
                  Misgav
                    Carmiel Technology Incubator Management Services Ltd.

                	
                  51-171135-0

                	
                  Teradion,
                    Misgav, Israel

                	
                  7,000

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-3

                	
                  Trendlines
                    Israel Fund, L.P.

                	
                  53-021903-9

                	
                  Shorashim,
                    Misgav, Israel

                	
                  10,000

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-4

                	
                  Yuvai
                    Shezifi

                	
                  05590874-3

                	
                  6
                    Bnei Brith St., Haifa

                	
                  9,990

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-5

                	
                  Asaf
                    Ben Arye

                	
                  05766684-4

                	
                  30
                    Yefe Nof St., Zichron Yaakov, Israel

                	
                  11,482

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-6

                	
                  Ilan
                    Grunberg

                	
                  05398881-2

                	
                  15
                    Gala st., Haifa Israel

                	
                  11,824

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-7

                	
                  Nissim
                    Ohana

                	
                  05792341-9

                	
                  6
                    Chativat Harel St. Rannana, Israel

                	
                  11,432

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  29.04.2007

                	
                  outstanding

                
	
                  O-8

                	
                  Cell
                    Kinetics Ltd.

                	
                  51-323862-6

                	
                  Lod,
                    Israel

                	
                  6,666

                	
                  Ordinary

                	
                  NIS
                    0.10 Par Value

                	
                  26.07.2007

                	
                  outstanding

                

        

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE
          1.4.7

         

        COMPLIANCE
          CERTIFICATE

         

        Reference
          is hereby made to that certain Supplementary Funding Agreement entered
          into as
          of July 26, 2007 (the “Supplementary Agreement”), by and
          between Scorpion Surgical Technologies Ltd. (the
“Company”) and Cell Kinetics Ltd. (51-323862-6)
          (the
“Investor”) Certain capitalized terms used but not otherwise
          defined herein shall have the meanings ascribed to them in the Purchase
          Agreement.

         

        The
          undersigned, Mr. Steve Rhodes, being a director of the Company, hereby
          certifies
          on behalf of the Company, and not in any personal capacity whatsoever,
          as
          follows:

         

        
          	
                  1.

                	
                  This
                    Certificate is being delivered to the Investor pursuant to Section
                    1.4.6
                    of the Supplementary Agreement.

                

        

         

        
          	
                  2.

                	
                  The
                    representations and warranties of the Company set forth in Section
                    4 of
                    the Supplementary Agreement are true in all material respects
                    on and as of
                    the date of the execution of the Supplementary Agreement (the
                    “Commencement Date”), with the same effect as though made
                    on and as of the Commencement Date.

                

        

         

        
          	
                  3.

                	
                  The
                    Company has performed and complied in all material respects,
                    with all
                    agreements, obligations and conditions contained in the Supplementary
                    Agreement that are required to be performed or complied with
                    by it on or
                    before the Commencement Date.

                

        

         

        
          	
                  4.

                	
                  All
                    authorizations, approvals, or permits, if any, of any governmental
                    authority or regulatory body of the State of Israel or of any
                    foreign
                    country that are required in connection with the lawful issuance
                    and sale
                    of the Ordinary Shares pursuant to the Supplementary Agreement
                    shall have
                    been duly obtained and effective as of the Commencement
                    Date.

                

        

         

        IN
          WITNESS WHEREOF, the undersigned have duly executed this Certificate on
          the 26 day of July 2007.

         

        /s/
          Steve
          Rhodes                                        

        Mr.
          Steve
          Rhodes, Director

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE
          1.4.8

         

        

         

        NOTICE
          TO THE REGISTRAR OF COMPANIES

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	
                  To:

                  THE
                    OFFICE OF REGISTRATION OF COMPANIES

                	
                  FORM
                    4

                  (REGULATION
                    2)

                
	
                  SHARES’
                    ALLOCATION REPORT

                  (Art.
                    140 (5) of the Law of Companies, 5759 - 1999 (hereinafter: „The
                    Law”))

                
	
                  NAME
                    OF THE COMPANY

                	
                  DATE
                    OF ALLOCATION

                	
                  NUMBER
                    OF THE COMPANY

                	
                  ADDRESS
                    AND TELEPHONE NO. OF THE REGISTERED OFFICE

                
	
                  SCORPION
                    SURGICAL TECHNOLOGIES LTD.

                	
                  Year

                	
                  Month

                	
                  Day

                	
                  SB

                	
                  Serial
                    number

                	
                  Z

                	
                  A.T.
                    TARDION

                  D.N.
                    MISGAV

                  20179

                   

                
	
                  2007

                	
                  07

                	
                  26

                	
                  1

                	
                  396950

                	
                  1

                
	
                  NAME
                    / TYPE OF ALLOTTED SHARES

                	
                  SYMBOL
                    OF THE SHARE

                  (for
                    the use of the Registration Office)

                	
                  NUMBER
                    OF ALLOTTED SHARES OF THESE TYPE

                	
                  NUMBER
                    OF SHARES ISSUED FOR SALE

                
	
                  Regular

                	 	
                  6.666

                	
                  Full
                    price

                	
                  Partial
                    price

                	
                  Value
                    of the part

                
	
                  In
                    cash

                	
                  Not
                    in cash

                	 	
                  Agurot

                	
                  NIS

                
	
                  Yes

                	 	 	 
	
                  SHAREHOLDERS
                    TO WHOM THE SHARES HAVE BEEN ALLOTTED

                
	
                  NAME
                    OF THE SHAREHOLDER

                	
                  IDENTITY
                    NO.

                	
                  ADDRESS

                	
                  SYMBOL
                    OF THE SHARE

                  (for
                    the use of the Registration Office)

                	
                  VALUE
                    OF THE SHARE

                	
                  NUMBER
                    OF SHARES OF THIS TYPE

                  ALLOTTED
                    TO THE SHAREHOLDER

                	
                  SUM
                    TO BE PAID FOR EACH SHARE

                
	
                  Cell
                    Kinetics Ltd.

                	
                  51-323862-6

                	
                  State

                	
                  Locality

                	
                  Street

                	
                  Number

                	
                  Code

                	 	
                  0.10

                	
                  6,666

                	
                  Ag.

                	
                  NIS

                
	
                  Israel

                	
                  Lod

                	 	 	 	 	 

        

        This
          form
          has to be sent to the Office of Registration of Companies within 14 days
          from
          the date of effective allotment; in case of allotment of shares not in
          cash,
          totally or partially paid, a copy of the document indicating the compensation
          details has to be attached.

         

        A
          share
          of unspecified value has to be marked with the digit “0”.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	
                  CASH
                    ALLOTMENT

                	
                  NON-CASH
                    ALLOTMENT

                
	
                  The
                    sum paid for each share _______ NIS.

                	
                  The
                    sum considered as paid for each share _______ NIS.

                
	
                  The
                    sum to be received for each share _______ NIS.

                	
                  Compensation
                    to be received for the allotment _______
                    NIS.

                

        

        

         

        (V)I
          hereby confirm that the allotment of the shares was registered in the List
          of
          Shareholders kept by the Company in accordance with art. 130 of the Law
          (mark V
          if the case). I hereby declare that I am a function holder of the Company
          in the
          sense of art. 39 of the Law.

         

        
          	
                  STEVE
                    RHODES

                	
                  015736028

                	
                  DIRECTOR

                	 	 
	
                  NAME
                    OF THE PERSON

                  WHO
                    COMPLETED THE FORM

                	
                  I.D.
                    NUMBER

                	
                  FUNCTION
                    HELD WITHIN

                  THE
                    COMPANY

                	
                  DATE

                	
                  SIGNATURE

                

        

        

         

        I
          the
          undersigned, Hila Stern, Advocate, hereby certify that Steve
          Rhodes  identified himself by means of his I.D. card no. 015736028,
          and, after having been cautioned by me that he had to tell the truth and
          that,
          in case of failure to do so, he would be passible of the sanctions specified
          by
          the Law, he confirmed the correctness of his declaration and signed it
          in my
          presence.

         

        
          	
                  Signature
                    of the Advocate:

                	 
	
                  Name:

                	
                  Hila
                    STERN

                
	
                  Address:

                	
                  Sport
                    Heroes’ Building, 7, Menahem Begin St., Ramat Gan 52681

                
	
                  B.I.:

                	
                  036416907

                
	
                  Authorization
                    number:

                	
                  46607

                

        

         

        

         
          
            

          

        

        Non-holders
          of an Israeli ID card will indicate the number of their passport and the
          country
          in which the passport was issued, and to the first report will be attached
          a
          copy of the passport, in accordance with Regulation 16 of the Company
          Regulations (reporting, registration data (forms), 5760 -1999. In case
          that the
          shareholder is a corporation, the registration number of the corporation
          will be
          specified, and in case that the shareholder is a foreign corporation, to
          the
          first report will be attached a copy of the association document and the
          certificatesrequired by the aforementioned Regulation 16.

         

        113XX-11338-030/f:/
          Shares’ Allotment Report 31.07.07.

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE
          1.4.9

         

        

         

        IP
          ASSIGNMENT

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        ASSIGNMENT
          OF IP RIGHTS

         

        This
          Assignment of IP Rights is made as of July 26, 2007, by Yuval
          Shezifi I.D Number 55908743, having his address at 6 Bnei Brith St.,
          Haifa (the “Assignor”).

         

        TO
          THE BENEFIT OF

         

        Scorpion
          Ltd., a company organized and existing under the laws of the State
          of
          Israel, having its registered office at D.N Misgav, 20179, Israel (the
          “Company”),

         

        Now
          therefore, the parties hereto have agreed as follows:

         

        
          	
                  1.

                	
                  Assignment.  The
                    Assignor hereby confirms and covenants that any and all developments,
                    discoveries, techniques, inventions and improvements, methods,
                    know-how,
                    processes, formulae, data, data bases, computer programs, computer
                    code,
                    source code, software, hardware, patents;-patent applications
                    and all
                    patentable materials, models, designs (whether registered or
                    not),
                    copyrights and all copyrightable materials, trade secrets, trademarks,
                    trade names, proprietary information, concepts and ideas pertaining
                    to the
                    field of “curved spinal fixation implants” (the “Field”),
                    and all documentation related therewith, that he has made, developed,
                    discovered, invented, conceived or created, either solely or
                    jointly with
                    others, prior to the date of this Assignment (all of the above,
                    the
                    “IP”)anything related to the Field, were made for
                    and on
                    behalf of the Company and are the sole property of the Company;
                    and, to
                    the extent required, the Assignor hereby assigns and transfers
                    to the
                    Company, its successors, assigns or nominees, all of his rights,
                    title and
                    interest in and to the IP related to the Filed, including without
                    limitation in and to all intellectual property rights associated
                    therewith
                    (such as patents, copyrights, etc.) and including his rights
                    in a US
                    patent application filed on June 24, 2007 entitled Bone Anchoring
                    System
                    and all other present and future rights in relation to the Products
                    and/or
                    arising from the Field (all of the above, including the IP related
                    to the
                    Field, hereinafter:  “IP Rights”), it being
                    clarified that such assignment includes all rights to sue for
                    and receive
                    remedies against past, present and future infringements of any
                    and all of
                    the foregoing rights.

                

        

         

        
          	
                  2.

                	
                  The
                    Assignor covenants and agrees to reasonably assist the Company
                    and its
                    assigns at the Company’s sole cost, to secure the Company’s rights in the
                    IP Rights in any and all jurisdictions and, to the extent required,
                    to
                    effect the assignment and transfer to the Company of the IP Rights,
                    including without limitation the disclosure to the Company of
                    all
                    pertinent information and data with respect thereto, the execution
                    of all
                    applications, specifications, oaths, assurances, assignments
                    and all other
                    instruments which the Company shall reasonably deem necessary
                    or expedient
                    in order to apply for and obtain any copyrights, patents and
                    all other
                    intellectual property rights relating thereto and to effect the
                    assignment.

                

        

         

        
          	
                  3.

                	
                  Delivery
                    of Documents.  The Assignor confirms that he has
                    delivered to the Company any and all devices, records, data,
                    notes,
                    reports, proposals, lists, correspondence, specifications, drawings,
                    blueprints, sketches, materials, equipment, other documents or
                    property,
                    or reproductions of any aforementioned items that were in his
                    possession
                    in relation to the IP Rights.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  4.

                	
                  No
                    Claims.  The Assignor hereby confirms and
                    undertakes that he does not have at present and will not have
                    in the
                    future, any claim’s and/or demands against the Company with respect to the
                    IP related to the Field and/or The IP
                    Rights.

                

        

         

        
          	
                  5.

                	
                  General
                    Provisions.

                

        

         

        
          	
                   

                	
                  5.1

                	
                  Governing
                    Law.  This Assignment shall be exclusively governed by the
                    laws of the State of Israel (without regard to the principles
                    of conflict
                    of laws thereof).

                

        

         

        
          	
                   

                	
                  5.2

                	
                  Successors
                    and Assigns.  This Assignment will be binding upon the
                    Assignor’s heirs, executors, administrators and other legal
                    representatives and will be for the benefit of the Company, its
                    successors, and its assigns.

                

        

         

        IN
          WITNESS WHEREOF, the Assignor has executed this Assignment of IP Right
          as of the
          date first above written.

         

        /s/
          Yuval
          Shezifi                               

        Yuval
          Shezifi

        26/July/2007

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        ASSIGNMENT
          OF IP RIGHTS

         

        This
          Assignment of IP Rights is made as of July 26, 2007, by Asaf
          Ben-Arye I.D Number 57666844, having his address at 30 Yefe Nof St.,
          Zichron Yaakov (the “Assignor”).

         

        TO
          THE BENEFIT OF

         

        Scorpion
          Ltd., a company organized and existing under the laws of the State
          of
          Israel, having its registered office at D.N Misgav, 20179, Israel (the
          “Company”),

         

        Now
          therefore, the parties hereto have agreed as inflows:

         

        
          	
                  1.

                	
                  Assignment.  The
                    Assignor hereby confirms and covenants that any and all developments,
                    discoveries, techniques, inventions and improvements, methods,
                    know-how,
                    processes, formulae, data, data bases, computer programs, computer
                    code,
                    source code, software, hardware, patents, patent applications
                    and all
                    patentable materials, models, designs (whether registered or
                    not),
                    copyrights and all copyrightable materials, trade secrets, trademarks,
                    trade names, proprietary information, concepts and ideas pertaining
                    to the
                    field of “curved spinal fixation implants” (the “Field”),
                    and all documentation related therewith, that he has made, developed,
                    discovered, invented, conceived or created, either solely or
                    jointly with
                    others, prior to the date of this Assignment (all of the above,
                    the
                    “IP”)anything related to the Field, were made for
                    and on
                    behalf of the Company and are the sole property of the Company;
                    and, to
                    the extent required, the Assignor hereby assigns and transfers
                    to the
                    Company, its successors, assigns or nominees, all of his rights,
                    title and
                    interest in and to the IP related to the Field, including without
                    limitation in and to all intellectual property rights associated
                    therewith
                    (such as patents, copyrights, etc.) and including his rights
                    in a US
                    patent application filed on June 24, 2007 entitled Bone Anchoring
                    System
                    and all other present and future rights in relation to the Field
                    and/or
                    arising from the Field (all of the above, including the IP related
                    to the
                    Field, hereinafter: “IP Rights”), it being clarified that
                    such assignment includes all rights to sue for and receive remedies
                    against past, present and future infringements of any and all
                    of the
                    foregoing rights.

                

        

         

        
          	
                  2.

                	
                  The
                    Assignor covenants and agrees to reasonably assist the Company
                    and its
                    assigns at the Company’s sole cost, to secure the Company’s rights in the
                    IP Rights in any and all jurisdictions and, to the extent required,
                    to
                    effect the assignment and transfer to the Company of the IP Rights,
                    including without limitation the disclosure to the Company of
                    all
                    pertinent information and data with respect thereto, the execution
                    of all
                    applications, specifications, oaths, assurances, assignments
                    and all other
                    instruments which the Company shall reasonably deem necessary
                    or expedient
                    in order to apply for and obtain any copyrights, patents and
                    all other
                    intellectual property rights relating thereto and to effect the
                    assignment.

                

        

         

        
          	
                  3.

                	
                  Delivery
                    of Documents.  The Assignor confirms that he has
                    delivered to the Company any and all devices, records, data,
                    notes,
                    reports, proposals, lists, correspondence, specifications, drawings,
                    blueprints, sketches, materials, equipment, other documents or
                    property,
                    or reproductions of any aforementioned items that were in his
                    possession
                    in relation to the IP Rights.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  4.

                	
                  No
                    Claims.  The Assignor hereby confirms and
                    undertakes that he does not have at present and will not have
                    in the
                    future, any claims and/or demands against the Company with respect
                    to the
                    IP related to the Field and/or the IP
                    Rights.

                

        

         

        
          	
                  5.

                	
                  General
                    Provisions.

                

        

         

        
          	
                   

                	
                  5.1

                	
                  Governing
                    Law.  This Assignment shall be exclusively governed by the
                    laws of the State of Israel (without regard to the principles
                    of conflict
                    of laws thereof).

                

        

         

        
          	
                   

                	
                  5.2

                	
                  Successors
                    and Assigns.  This Assignment will be binding upon the
                    Assignor’s heirs, executors, administrators and other legal
                    representatives and will be for the benefit of the Company, its
                    successors, and its assigns.

                

        

         

         

        IN
          WITNESS WHEREOF, the Assignor has executed this Assignment of IP Right
          as of the
          date first above written

         

         

        /s/
          Asaf
          Ben-Arye                                  

        Asaf
          Ben-Arye

        26/7/07

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        To:

        Scorpion
          Ltd.

        D.N.
          Misgav, 20179

        Israel

         

        Declaration

         

        Each
          of
          the undersigned, hereby confirms and declares that as of the date hereof,
          he did
          not develop, does not own and does not have any right in any intellectual
          property which is currently used and/or necessary for the operation of
          the
          business of Scorpion Ltd. (the “Company”) as presently
          conducted and which relates directly or indirectly to the field of “curved
          spinal fixation implants” (the “Field”) (the
“Intellectual Property”) and hereby waives any right or claim
          which he has or may have in the future in connection with the Company’s
          Intellectual Property.

         

         

        
          	
                  /s/
                    Nissim Ohana

                	 	
                  Dated:  July
                    26, 2007

                
	
                  Nissim
                    Ohana

                	 	 
	 	 	 
	 	 	 
	
                  /s/
                    Ilan Grunberg

                	 	 
	
                  Ilan
                    Grunberg

                	 	 
	 	 	 

        

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE
          4

         

        

         

        DISCLOSURE
          SCHEDULE

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        Schedule
          4

        Disclosure
          Schedule

         

        This
          is
          the disclosure schedule (the “Disclosure Schedule”) to that
          certain Supplementary Funding Agreement dated July 26, 2007 (the
“Supplementary Funding Agreement”) by and between Scorpion
          Surgical Technologies Ltd., an Israeli company (company number 51-396950-1)
          with
          a business address at D.N. Misgav, 20179, Israel (the “Company”), and Cell
          Kinetics Ltd., a private Israeli company (51-323862-6) from Lod, Israel
          (the
“Investor”).  Schedule headings are provided for convenience only.
          Unless otherwise defined herein, any capitalized terms used in this Disclosure
          Schedule shall have the same meanings assigned to such terms in the
Supplementary Funding Agreement.  Without derogating
          from any of the rights of the Investor under the Supplementary Funding
          Agreement, including the schedules and exhibits thereto, nothing in
          this Disclosure Schedule constitutes an admission of any liability or obligation
          of the Company vis-à-vis any third party other than the Investor, an admission
          against the Company’s interests or an acknowledgment that any matter disclosed
          in the Disclosure Schedule is required to be disclosed.

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        Schedule
          4.2

        Corporate
          Documents

         

         

         

        Articles
          of Association - See attached

         

        Certificate
          of Incorporation - See attached

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        COMPANY
          ASSOCIATION CERTIFICATE

         

        This
          is to certify that

         

        
          	
                  SCORPION
                    SURGICAL

                  TECHNOLOGIES
                    LTD.

                

        

         

        Was
          associated and registered in conformity with the Law of Companies as a
          Company
          with Limited Liability.

         

        29.04.2007

        11
          Iyar
          5767

         

         

        Company
          number: 513869501

         

        
          	
                  For/
                    OFFICE OF REGISTRATION OF COMPANIES

                  Sheldon
                    AVIDAN

                  (Indecipherable
                    signature)

                	
                  ROUND
                    STAMP

                   

                  MINISTRY
                    OF JUSTICE

                  OFFICE
                    OF REGISTRATION OF COMPANIES

                

        

         

        
 

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  RECTANGULAR
                    STAMP

                  Decipherable:  TRUE
                    TO THE ORIGINAL

                	
                  ROUND
                    STAMP

                  MINISTRY
                    OF JUSTICE

                  OFFICE
                    OF REGISTRATION OF COMPANIES

                

        

        Law
          of Companies, 5760 - 1999

         

        COMPANY
          STATUTE

         

        
          	
                  1.  

                	
                  Name
                    of the Company

                

        

         

        Name
          of
          the Company:  Scorpion Surgical Technologies Ltd.

         

        
          	
                  2.  

                	
                  Goals
                    of the Company

                

        

         

        To
          engage
          in any legal activity.

         

        
          	
                  3.  

                	
                  Data
                    regarding the Registered Share Capital of the
                    Company

                

        

         

        
          	
                  Registered
                    capital:

                	
                  100,000
                    New Israeli Sheqels

                
	
                  Consisting
                    in:

                	
                  ______
                    shares of non-specified value, or

                
	
                  Consisting
                    in:

                	
                  1,000,000
                    shares with a value of 0.1 NIS

                
	
                  each
                    of the following types:

                	
                  1,000,000
                    regular shares

                

        

        
        

        

        
          	
                  4.  

                	
                  Data
                    regarding the Limiting of the Liability of the
                    Company

                

        

         

        Liability
          of shareholders:

         

        The
          liability of shareholders is limited to the payment of the unpaid part
          of the
          specified value of each share held by them.

         

        
          	
                  5.  

                	
                  Transfer
                    of Shares, Offer of Shares and Bonds to the Public, Number of
                    Shareholders

                

        

         

        
          	
                   

                	
                  a.

                	
                  Any
                    tranfer of shares requires the approval of the Board of
                    Directors.

                

        

         

        
          	
                   

                	
                  b.

                	
                  The
                    Company is forbidden to offer shares and/or bonds to the
                    public.

                

        

         

        
          	
                   

                	
                  c.

                	
                  The
                    number of shareholders will not be in excess of fifty, apart
                    from the
                    Company employees or former employees, who, in their quality
                    of employees
                    and even after the termination of their employment continue to
                    be
                    shareholders of the Company.

                

        

         

        
          	
                  6.  

                	
                  The
                    First Shareholders

                

        

         

        
          	
                  Name
                    of the shareholder:

                	
                  Technological
                    Incubator Misgav/Karmiel, Management Services Ltd.

                
	
                  Private
                    Company No.:

                	
                  51-171135-0

                
	
                  Address:

                	
                  A.T.
                    Tardion, Mobile Post Misgav 20179, Israel

                
	
                  Number
                    of shares allotted:

                	
                  7,000
                    regular shares

                
	
                  Signature:

                	
                  Technological
                    Incubator Misgav/Karmiel, Management Services Ltd.

                  (Signature
                    indecipherable)

                
	 	 
	
                  Name
                    of the shareholder:

                	
                  Trend
                    Lines Yizreel Fund, L.P.

                
	
                  Private
                    Company No.:

                	
                  53-021903-9

                
	
                  Address:

                	
                  Shorashim,
                    Mobile Post Misgav 20164, Israel

                
	
                  Number
                    of shares allotted:

                	
                  10,000
                    regular shares

                
	
                  Signature:

                	
                  Trend
                    Lines Yizreel Fund, L.P.

                  (Signature
                    indecipherable)

                

        

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                  Name
                    of the shareholder:

                	
                  Asaf
                    Ben Arieh

                
	
                  I.D.
                    No.:

                	
                  57666844

                
	
                  Address:

                	
                  30,
                    Yeffe Nof St., Zichron Yaakov, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,482
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Yuval
                    Shezifi

                
	
                  I.D.
                    No.:

                	
                  55908743

                
	
                  Address:

                	
                  6,
                    Bney Brit St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  9,990
                    regular shares

                
	
                  Signature:

                	 
	
                   

                	 
	
                  Name
                    of the shareholder:

                	
                  Nissim
                    Ohana

                
	
                  I.D.
                    No.:

                	
                  57923419

                
	
                  Address:

                	
                  6,
                    Hativat Harel St., Raanana, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,432
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Ilan
                    Greenberg

                
	
                  I.D.
                    No.:

                	
                  53988812

                
	
                  Address:

                	
                  15,
                    Geula St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,824
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Steve
                    Rhodes

                
	
                  I.D.
                    No.:

                	
                  015736028

                
	
                  Address:

                	
                  Shorashim,
                    Mobile Post Misgav 20164, Israel

                
	
                  Number
                    of shares allotted:

                	
                  3,000
                    regular shares

                
	
                  Signature:

                	
                  Indecipherable

                

        

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	
                   

                	 
	
                  Name
                    of the shareholder:

                	
                  Asaf
                    Ben Arieh

                
	
                  I.D.
                    No.:

                	
                  57666844

                
	
                  Address:

                	
                  30,
                    Yeffe Nof St., Zichron Yaakov, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,482
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Yuval
                    Shezifi

                
	
                  I.D.
                    No.:

                	
                  55908743

                
	
                  Address:

                	
                  6,
                    Bney Brit St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  9,990
                    regular shares

                
	
                  Signature:

                	
                  Indecipherable

                
	
                   

                	 
	
                  Name
                    of the shareholder:

                	
                  Nissim
                    Ohana

                
	
                  I.D.
                    No.:

                	
                  57923419

                
	
                  Address:

                	
                  6,
                    Hativat Harel St., Raanana, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,432
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Ilan
                    Greenberg

                
	
                  I.D.
                    No.:

                	
                  53988812

                
	
                  Address:

                	
                  15,
                    Geula St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,824
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Steve
                    Rhodes

                
	
                  I.D.
                    No.:

                	
                  015736028

                
	
                  Address:

                	
                  Shorashim,
                    Mobile Post Misgav 20164, Israel

                
	
                  Number
                    of shares allotted:

                	
                  3,000
                    regular shares

                
	
                  Signature:

                	 

        

         

         

         

        
 

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	 	 
	
                  Name
                    of the shareholder:

                	
                  Asaf
                    Ben Arieh

                
	
                  I.D.
                    No.:

                	
                  57666844

                
	
                  Address:

                	
                  30,
                    Yeffe Nof St., Zichron Yaakov, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,482
                    regular shares

                
	
                  Signature:

                	
                  Indecipherable

                
	 	 
	
                  Name
                    of the shareholder:

                	
                  Yuval
                    Shezifi

                
	
                  I.D.
                    No.:

                	
                  55908743

                
	
                  Address:

                	
                  6,
                    Bney Brit St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  9,990
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Nissim
                    Ohana

                
	
                  I.D.
                    No.:

                	
                  57923419

                
	
                  Address:

                	
                  6,
                    Hativat Harel St., Raanana, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,432
                    regular shares

                
	
                  Signature:

                	 
	
                   

                	 
	
                  Name
                    of the shareholder:

                	
                  Ilan
                    Greenberg

                
	
                  I.D.
                    No.:

                	
                  53988812

                
	
                  Address:

                	
                  15,
                    Geula St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,824
                    regular shares

                
	
                  Signature:

                	
                  Indecipherable

                
	 	 
	
                  Name
                    of the shareholder:

                	
                  Steve
                    Rhodes

                
	
                  I.D.
                    No.:

                	
                  015736028

                
	
                  Address:

                	
                  Shorashim,
                    Mobile Post Misgav 20164, Israel

                
	
                  Number
                    of shares allotted:

                	
                  3,000
                    regular shares

                
	
                  Signature:

                	 

        

         

         

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          	 	 
	
                  Name
                    of the shareholder:

                	
                  Asaf
                    Ben Arieh

                
	
                  I.D.
                    No.:

                	
                  57666844

                
	
                  Address:

                	
                  30,
                    Yeffe Nof St., Zichron Yaakov, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,482
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Yuval
                    Shezifi

                
	
                  I.D.
                    No.:

                	
                  55908743

                
	
                  Address:

                	
                  6,
                    Bney Brit St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  9,990
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Nissim
                    Ohana

                
	
                  I.D.
                    No.:

                	
                  57923419

                
	
                  Address:

                	
                  6,
                    Hativat Harel St., Raanana, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,432
                    regular shares

                
	
                  Signature:

                	
                  Indecipherable

                
	
                   

                	 
	
                  Name
                    of the shareholder:

                	
                  Ilan
                    Greenberg

                
	
                  I.D.
                    No.:

                	
                  53988812

                
	
                  Address:

                	
                  15,
                    Geula St., Haifa, Israel

                
	
                  Number
                    of shares allotted:

                	
                  11,824
                    regular shares

                
	
                  Signature:

                	 
	 	 
	
                  Name
                    of the shareholder:

                	
                  Steve
                    Rhodes

                
	
                  I.D.
                    No.:

                	
                  015736028

                
	
                  Address:

                	
                  Shorashim,
                    Mobile Post Misgav 20164, Israel

                
	
                  Number
                    of shares allotted:

                	
                  3,000
                    regular shares

                
	
                  Signature:

                	 

        

      

    

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Mark Daogherty, Adv., hereby certify the signature
      of:

     

    Nissim
      Ohana, I.D. no. 57923419,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Mark
                Daogherty, Adv.

            	
              15.4.07

            	
              Mark
                Dagherty, Adv.

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Vered Horesh, Adv., hereby certify the signature
      of:

     

    Yuval
      Shezifi, I.D. no. 55908743,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Vered
                Horesh, Adv.

            	
              12.04.2007

            	
              Vered
                Horesh, Adv.

              Authorization
                no. 32389

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the
      undersigned, Vered Horesh, Adv., hereby certify the signature of:

     

    
      	
               

            	
              1.

            	
              Steve
                Rhodes, I.D. no. 015736028, authorized to sign on behalf of the
                Technological Incubator Misgav/Karmiel, Management Services
                Ltd.

            

    

     

    
      	
               

            	
              2.

            	
              Steve
                Rhodes, I.D. no. 015736028, authorized to sign on behalf of Trend
                Lines
                Yizreel Fund, L.P.

            

    

     

    
      	
               

            	
              3.

            	
              Steve
                Rhodes, I.D. no. 015736028.

            

    

     

    Who
      has signed before me this present Statute.

     

    
      	
              Vered
                Horesh, Adv.

            	
              12.04.2007

            	
              Vered
                Horesh, Adv.

              Authorization
                no. 32389

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Tal Einat-Ben Arieh, Advocate, Authorization no. 13312, hereby
      certify the signature of:

     

    Ilan
      Greenberg, I.D. no. 53988812,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Tal
                Einat-Ben Arieh, Adv.

            	
              19.04.2007

            	
              Tal
                Einat-Ben Arieh, Adv.

              Authorization
                no. 13312

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Tal Einat-Ben Arieh, Advocate, Authorization no.
      13312,  hereby certify the signature of:

     

    Asaf
      Ben Arieh, I.D. no. 57666844,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Tal
                Einat-Ben Arieh, Adv.

            	
              21.04.2007

            	
              Tal
                Einat-Ben Arieh, Adv.

              Authorization
                no. 13312

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Vered Horesh, Adv., hereby certify the signature
      of:

     

    Yuval
      Shezifi, I.D. no. 55908743,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Vered
                Horesh, Adv.

            	
              12.04.2007

            	
              Vered
                Horesh, Adv.

              Authorization
                no. 32389

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the
      undersigned, Vered Horesh, Adv., hereby certify the signature of:

     

    
      	
               

            	
              1.

            	
              Steve
                Rhodes, I.D. no. 015736028, authorized to sign on behalf of the
                Technological Incubator Misgav/Karmiel, Management Services
                Ltd.

            

    

     

    
      	
               

            	
              2.

            	
              Steve
                Rhodes, I.D. no. 015736028, authorized to sign on behalf of Trend
                Lines
                Yizreel Fund, L.P.

            

    

     

    
      	
               

            	
              3.

            	
              Steve
                Rhodes, I.D. no. 015736028.

            

    

     

    Who
      has signed before me this present Statute.

     

    
      	
              Vered
                Horesh, Adv.

            	
              12.04.2007

            	
              Vered
                Horesh, Adv.

              Authorization
                no. 32389

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Tal Einat-Ben Arieh, Advocate, Authorization no. 13312, hereby
      certify the signature of:

     

    Ilan
      Greenberg, I.D. no. 53988812,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Tal
                Einat-Ben Arieh, Adv.

            	
              19.04.2007

            	
              Tal
                Einat-Ben Arieh, Adv.

              Authorization
                no. 13312

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CERTIFICATION
      OF  SIGNATURES OF  SHAREHOLDERS OR OF PERSONS AUTHORIZED TO
      SIGN ON THEIR OWN BEHALF

     

    I
      the undersigned, Tal Einat-Ben Arieh, Advocate, Authorization no.
      13312,  hereby certify the signature of:

     

    Assaf
      Ben Arieh, I.D. no. 57666844,

     

    Who
      has signed before me this present Statute.

     

    
      	
              Tal
                Einat-Ben Arieh, Adv.

            	
              21.04.2007

            	
              Tal
                Einat-Ben Arieh, Adv.

              Authorization
                no. 13312

              (Indecipherable
                signature)

            
	
              NAME
                OF THE ADVOCATE

            	
              DATE

            	
              SIGNATURE
                AND STAMP

            

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.4

     

    Governmental
      or Third Party Consents

     

    Pursuant
      to section 6.2 of the Founders Agreement, TIF shall have the right of first
      offer to provide the Company with supplementary financing. TIF has waived its
      right to provide the Company such financing, a copy of which is attached as
      Schedule 1.4.2 to the Supplementary Funding Agreement.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.5A

     

    Capitalization
      Table

     

    (Immediately
      following the Closing)

     

    [see
      attached]

     

    
      	
              1.

            	
              Founders
                Agreement dated March 23, 2007 under which the parties to the Agreement
                were provided with several rights to purchase Company’s shares, including
                without limitation, Preemptive Rights, Rights of First Refusal, and
                Tag
                Along rights.

            

    

     

    
      	
              2.

            	
              The
                Company has offered 2,000 options of the Company to Mr. J. Chris
                McAuliffe, a member of the Board of Directors of the
                Company.

            

    

     

    
      	
              3.

            	
              The
                Company has offered 2,000 options of the Company to Mr. Arnon Epstein,
                an
                employee of the Company.

            

    

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Post
      Investment

     

    
      	
              Shareholder
                Name

            	
              Following
                investment

            
	
              Ordinary
                Shares

            	
              Options
                to Ordinary

              Shares

            	
              Total
                (fully diluted)

            	
              %
                Fully diluted

            
	
              Steve
                Rhodes

            	
              3,000.00

            	
              
                —

              

            	
              3,000.00

            	
              3.00%

            
	
              Misgav
                Carmiel Technology Incubator Management Services, Ltd.

            	
              7,000.00

            	
              
                —

              

            	
              7,000.00

            	
              7.00%

            
	
              Trendlines
                Israel Fund, L.P.

            	
              10,000.00

            	
              
                —

              

            	
              10,000.00

            	
              10.00%

            
	
              Yuval
                Sheziffi

            	
              9,990.00

            	
              
                —

              

            	
              9,990.00

            	
              9.99%

            
	
              Asaf
                Ben Arye

            	
              11,482.00

            	
              
                —

              

            	
              11,482.00

            	
              11.48%

            
	
              Ilan
                Grunberg

            	
              11,824.00

            	
              
                —

              

            	
              11,824.00

            	
              11.82%

            
	
              Nisim
                Ohana

            	
              11,432.00

            	
              
                —

              

            	
              11,432.00

            	
              11.43%

            
	
              Technion
                Incubator for Entrepreneurship Ltd.

            	
              —

            	
              1,387.00

            	
              1,387.00

            	
              1.39%

            
	
              Technological
                Incubator Foundation of the Technion Institute for R&D
                Ltd.

            	
              
                —

              

            	
              595.00

            	
              595.00

            	
              0.60%

            
	
              Mor
                Research Applications Ltd.

            	
              
                —

              

            	
              260.00

            	
              260.00

            	
              0.26%

            
	
              Avner
                Kurz

            	
              
                —

              

            	
              547.00

            	
              547.00

            	
              0.55%

            
	
              Yizhak
                Ben-Zion

            	
              
                —

              

            	
              295.00

            	
              295.00

            	
              0.30%

            
	
              Shalom
                Arbiv

            	
              
                —

              

            	
              190.00

            	
              190.00

            	
              0.19%

            
	
              Reuven
                Ovadia

            	
              
                —

              

            	
              408.00

            	
              408.00

            	
              0.41%

            
	
              Amiram
                Bornstein

            	
              
                —

              

            	
              1,111.00

            	
              1,111.00

            	
              1.11%

            
	
              Nir
                Galan

            	
              
                —

              

            	
              204.00

            	
              204.00

            	
              0.20%

            
	
              Rami
                Cohen

            	
              
                —

              

            	
              275.00

            	
              275.00

            	
              0.28%

            
	
              ESOP

            	 	
              10,000.00

            	
              10,000.00

            	
              10.00%

            
	
              Cell
                Kinetics

            	
              20,000.00

            	 	
              20,000.00

            	
              20.00%

            
	
              Total

            	
              84,728.00

            	
              15,272.00

            	
              100,000.00

            	
              100.00%

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.5 B

     

    Capitalization
      Table

     

    (Immediately
      prior to the Closing)

     

    [see
      attached]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Share
      Capital Table

     

    Date:
      June 2007

     

    
      	
              Shareholder
                Name

            	
              Upon
                Incorporation

            
	
              Ordinary
                Shares

            	
              Options
                to Ordinary

              Shares

            	
              Total
                (fully diluted)

            	
              %
                Fully diluted

            
	
              Steve
                Rhodes

            	
              3,000.00

            	
              
                —

              

            	
              3,000.00

            	
              3.75%

            
	
              Misgav
                Carmiel Technology Incubator Management Services, Ltd.

            	
              7,000.00

            	
              
                —

              

            	
              7,000.00

            	
              8.75%

            
	
              Trendlines
                Israel Fund, L.P.

            	
              10,000.00

            	
              
                —

              

            	
              10,000.00

            	
              12.50%

            
	
              Yuval
                Sheziffi

            	
              9,990.00

            	
              
                —

              

            	
              9,990.00

            	
              12.49%

            
	
              Asaf
                Ben Arye

            	
              11,482.00

            	
              
                —

              

            	
              11,482.00

            	
              14.35%

            
	
              Ilan
                Grunberg

            	
              11,824.00

            	
              
                —

              

            	
              11,824.00

            	
              14.78%

            
	
              Nisim
                Ohana

            	
              11,432.00

            	
              
                —

              

            	
              11,432.00

            	
              14.29%

            
	
              Technion
                Incubator for Entrepreneurship Ltd.

            	
              
                —

              

            	
              1,387.00

            	
              1,387.00

            	
              1.73%

            
	
              Technological
                Incubator Foundation of the Technion Institute for R&D
                Ltd.

            	
              
                —

              

            	
              595.00

            	
              595.00

            	
              0.74%

            
	
              Mor
                Research Applications Ltd.

            	
              
                —

              

            	
              260.00

            	
              260.00

            	
              0.33%

            
	
              Avner
                Kurz

            	
              
                —

              

            	
              547.00

            	
              547.00

            	
              0.68%

            
	
              Yizhak
                Ben-Zion

            	
              
                —

              

            	
              295.00

            	
              295.00

            	
              0.37%

            
	
              Shalom
                Arbiv

            	
              
                —

              

            	
              190.00

            	
              190.00

            	
              0.24%

            
	
              Reuven
                Ovadia

            	
              
                —

              

            	
              408.00

            	
              408.00

            	
              0.51%

            
	
              Amiram
                Bornstein

            	
              
                —

              

            	
              1,111.00

            	
              1,111.00

            	
              1.39%

            
	
              Nir
                Galan

            	
              
                —

              

            	
              204.00

            	
              204.00

            	
              0.26%

            
	
              Rami
                Cohen

            	
              
                —

              

            	
              275.00

            	
              275.00

            	
              0.34%

            
	
              ESOP

            	
               

            	
              10,000.00

            	
              10,000.00

            	
              12.50%

            
	
              Total

            	
              64,728.00

            	
              15,272.00

            	
              80,000.00

            	
              100.00%

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Material
      agreements

     

     

     

    
      	
              1.

            	
              Founders
                Agreement dated March 23, 2007.

            

    

     

    
      	
              2.

            	
              Undertaking
                of the Company towards the OCS dated May 15, 2007 regarding approved
                plan
                No. 37701.

            

    

     

    
      	
              3.

            	
              Services
                Agreement (Appendix to Founders
                Agreement)

            

    

     

    
      	
              4.

            	
              Employment
                agreement with Anion Epstein

            

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FOUNDERS
      AGREEMENT

     

    Signed
      in HAIFA this 23 of March 2007

     

    
      	
            	
              Between:

            	
              The
                Incubator for Managing Technology Entrepreneurship Misgav Ltd.
                (51-222958-4) (“Misgav Incubator”) and its subsidiary,
                Misgav Carmiel Technology Incubator Management Services
                Ltd. (51-171135-0) (“Holding Company”) whose
                offices are located in Teradion, Misgav, Israel (the Holding Company
                and
                Misgav Incubator shall be referred collectively as the
                “Incubator”);

            

    

     

     

    Of
      the First Part

     

    
      	
              And:

            	
              Trendlines
                Israel Fund; L.P., a Delaware Limited Partnership (53-021903-9)
                (“TIF”) whose offices are located in Shorashim, Misgav,
                Israel;

            

    

     

     

    Of
      the Second Part

     

    
      	
              And:

            	
              Nassim
                Ohana I.D#:  57923419, having his address at 6 Chativat
                Harel st. Rannana,

            

    

     

    
      	
              And:

            	
              Yuval
                Shezifi I.D#:  55908743, having his address at 6 Bnei
                Brith St, Haifa,

            

    

     

    
      	
              And:

            	
              Ilan
                Grunberg I.D#:  53988812 having his address at 15 Gula
                st., Haifa,

            

    

     

    
      	
              And:

            	
              Asaf
                Ben-Arye I.D#:  57666844, having his address at 30 Yee
                Nof st Zichron Yaakov, (each an “Entrepreneur” and
                collectively, the
                “Entrepreneurs”)

            

    

     

     

    Of
      the Third Part

     

    
      	
              Whereas

            	
              The
                Incubator operates a technological incubator in accordance with the
                Incubator Program administered by the Office of the Chief Scientist
                (the
                “OCS”) in the Ministry of Industry and Trade and Labor
                (the “Incubator Program”);
                and

            

    

     

    
      	
              Whereas

            	
              TIF
                is a venture capital fund focusing on investments in early stage
                high
                technology companies and on December 27, 2004, TIF and the Incubator
                entered into a certain financing agreement (“Trendlines
                Agreement”) 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        
          	
                   

                	
                  under
                    which, inter alia, TIF is entitled to hold an equal amount of
                    shares as
                    the Incubator in each company incorporated in the Incubator;
                    and

                

        

         

      

    

    
      	
              Whereas

            	
              The
                Entrepreneurs have presented certain technology for curved spinal
                fixation
                (“The technology”) implants and can develop and commercialize products
                based on such technology (the “Products”),
                and

            

    

     

    
      	
              Whereas

            	
              The
                OCS has approved the application for the grant of funds submitted
                by the
                Incubator on behalf of the Entrepreneurs to conduct a research and
                development program within the framework of the Incubator (the
                “Approved Project”), in accordance with the terms and
                conditions of the written Approval attached hereto as Schedule
                A (the “Notice of Approval”). The terms and
                conditions of the Notice of Approval are hereby incorporated to this
                Founders Agreement and shall obligate all parties hereto;
                and

            

    

     

    
      	
              Whereas

            	
              Following
                the execution of this Agreement, the Incubator will sign and submit
                to the
                OCS a letter of undertaking in the form attached hereto as
                Schedule B (the “Letter of
                Undertaking”); and

            

    

     

    
      	
              Whereas

            	
              The
                Entrepreneurs declare that they have the required knowledge, experience,
                education and know how’ to support the research and development of the
                Products; and, each of the Entrepreneurs represents and warrants
                that to
                the best of their knowledge, other then information acquired by a
                patent
                search made by the incubator and Patent number: 6607530; by Carl
                et al
                Patent number: 5928267 by Bonutti), the development and/or manufacturing
                and/or marketing of the Products as proposed by them does not infringe
                any
                third party’s trade marks, patents and/or any other intellectual property
                rights of any third party, or constitutes a breach of any employment
                and/or non-competition ‘and/or confidentiality agreement(s) to which the
                Entrepreneurs. are parties to; and

            

    

     

    
      	
              Whereas

            	
              The
                Incubator represents and warrants to the Entrepreneurs that it can
                make
                available to the Entrepreneurs the facilities and assistance required
                by
                the Entrepreneurs for the initial phase of the development of the
                Products; in accordance with the terms of the Incubator Program;
                and

            

    

     

    
      	
              Whereas

            	
              the
                parties wish to define and set forth the legal framework for the
                relationship between them, including their respective rights and
                obligations with respect to the funding provided by the
                OCS.

            

    

     

    Now,
      therefore, the Parties agree as follows:

     

    
      	
              1.

            	
              General

            

    

     

    
      	
               

            	
              1.1

            	
              The
                recitals and the schedules to this Agreement constitute an integral
                part
                thereof.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              1.2

            	
              The
                budget for the Approved Project, as approved by the OCS, is attached
                as
                Schedule C to this Agreement (“Approved
                Budget”).

            

    

     

    
      	
              2.

            	
              Incorporation
                of the Company; Share
                Capital

            

    

     

    
      	
               

            	
              2.1

            	
              Following
                the execution of this Agreement the parties shall incorporate an
                Israeli
                company limited by shares (the “Company”) and use their
                best efforts to complete the incorporation of the Company as soon
                as
                possible.

            

    

     

    The
      name
      of the Company shall be Scorpion Ltd., of any other name agreed to by the
      parties and which the Registrar of Companies shall
      approve.  Immediately after its incorporation, the Company shall
      approve the execution of this Agreement, and all the actions taken by the
      Incubator, TIF and the Entrepreneurs in the name and on behalf of the Compaq
      prior to its incorporation.

     

    Upon
      the
      incorporation of the Company, TIF will execute and submit to the OCS a Foreign
      Entity’s Letter of Undertaking, in the form attached hereto as
Schedule D.

     

    
      	
               

            	
              2.2

            	
              The
                registered share capital of the Company shall be NIS 30,000 and shall
                be
                divided into 3,000,000 shares par value NIS 0.01 each (the
                “Shares”). All such shares shall be of one class and
                shall be designated Ordinary Shares. Upon its incorporation, the
                issued
                and outstanding share capital of the Company shall be as specified
                in the
                capitalization table attached hereto as Schedule
                E.

            

    

     

    The
      parties confirm and agree, that as of the incorporation of the Company, the
      Board of Directors of the Company (the “Board”) shall approve
      the reservation of Ten-Thousand (I0,000) Ordinary Shares of the Company
      (“ESOP Shares”), for future allocation of options to purchase
      Ordinary Shares to employees, consultants, service providers or directors of
      the
      Company under an Employee Stock Option Plan (“ESOP”), to be
      adopted by the Company subsequent to the incorporation of the Company, at a
      Board meeting with the approval of the directors appointed by the Incubator
      and
      TIF.

     

    
      	
               

            	
              2.3

            	
              The
                Shares will confer on the holders thereof all rights of Ordinary
                Shares in
                the Company, pursuant to applicable law and the Articles of Association
                of
                the Company as may be amended from time to time, including without
                limitation, the right to vote on any matter submitted to shareholders
                for
                their consideration at any shareholders’ meeting, with each Share having
                voting power of one vote for one Share, the right to receive notice
                of any
                shareholders’ meeting, the right to receive dividends and the right to
                participate in any distribution on the winding up of the
                Company.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                3.

              	
                Management
                  of the Company

              

      

    

     

    
      	
               

            	
              3.1

            	
              As
                long as the Company is working within the framework of the Incubator,
                the
                Board shall consist of five (5) directors to be appointed as
                follows:

            

    

     

    
      	
               

            	
              (a)

            	
              One
                (1) director shall be appointed by the
                Incubator;

            

    

    
      	
               

            	
              (b)

            	
              One
                (1) director shall be appointed by
                TIF;

            

    

    
      	
               

            	
              (c)

            	
              Two
                (2) directors shall be appointed by the Entrepreneurs;
                and

            

    

    
      	
               

            	
              (d)

            	
              One
                (1) director shall be a person knowledgeable in the field of activity
                of
                the Company, to be appointed by the unanimous agreement of the other
                4
                directors of the Company.

            

    

     

    
      	
               

            	
              3.2

            	
              The
                appointment or removal of a director shall be effected by the delivery
                of
                a notice to the Company at its principal office, signed by the holders
                of
                the shares entitled to effect such appointment or removal. Any appointment
                or removal shall become effective on the date fixed in the notice
                or upon
                delivery of the notice to the Company, whichever is
                later.

            

    

     

    
      	
               

            	
              3.3

            	
              The
                Board may meet and adjourn its meetings and otherwise regulate such
                meetings and proceedings as the Directors think fit, in accordance
                with
                the provisions of the Company’s Articles of Association. The Board shall
                convene at least once in each calendar
                quarter.

            

    

     

    
      	
               

            	
              3.4

            	
              Any
                Director may, at any time, request to convene a meeting of the Board
                but
                not less than four (4) business days notice shall be given of any
                meeting
                so convened.

            

    

     

    
      	
               

            	
              3.5

            	
              The
                presence of the majority of Directors, including at least one director
                appointed by the Incubator or TIF and one Director appointed by the
                Entrepreneur, shall constitute a quorum for meetings of the
                Board.

            

    

     

    
      	
               

            	
              3.6

            	
              The
                Board shall be entitled to make decisions by a vote of a simple majority
                of the members present at such meetings, with each member entitled
                to one
                vote, except that, until the later of (i) the Company ceases to work
                within the framework of the Incubator; or (ii) two years from the
                date
                hereof, any Board decision regarding one of the following issues,
                shall
                require the consent of a Director appointed by the
                Incubator.

            

    

     

    
      	
               

            	
              (a)

            	
              The
                working relations between the Company and the
                Incubator;

            

    

     

    
      	
               

            	
              (b)

            	
              The
                management of funds received from the
                OCS;

            

    

     

    
      	
               

            	
              (c)

            	
              Approval
                of the annual Budget;

            

    

     

    
      	
               

            	
              (d)

            	
              Any
                adoption, amendment and modification of signatory rights on behalf
                of the
                Company;

            

    

     

    
      	
               

            	
              (e)

            	
              Any
                issuance of shares, options to purchase shares or any other securities
                of
                the Company that results in a down
                round;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (f)

            	
              Any
                adoption, amendment or modification of the
                ESOP;

            

    

     

    
      	
               

            	
              (g)

            	
              Approval
                of and any amendment of terms of employment of the Entrepreneurs,
                or the
                hiring, dismissal or change in the terms of employment of any other
                senior
                employees of the Company.

            

    

     

    
      	
               

            	
              (h)

            	
              The
                approval of any material transaction of the Company or any transaction
                out
                of the ordinary course of business.

            

    

     

    
      	
               

            	
              (i)

            	
              Replacement
                of registered office and place of business of the Company or adoption
                of
                additional place of business.

            

    

     

    
      	
               

            	
              3.7

            	
              The
                registered office of the Company shall be at D.N. Misgav 20179, or
                at any
                other place which the Board shall
                approve.

            

    

     

    
      	
              4.

            	
              Undertakings
                of the Incubator

            

    

     

    During
      the term in which the Company operates within the Incubator, the Incubator
      shall
      make available to the Company adequate working facilities, management and
      consulting services, and shall deliver the Company’s financial reports to the
      OCS - all under the terms and conditions of the Services Agreement attached
      hereto as Schedule F that shall be executed between the
      Entrepreneurs and the Incubator.

     

    
      	
              5.

            	
              Undertakings
                of the Entrepreneurs

            

    

     

    
      	
               

            	
              5.1

            	
              Upon
                incorporation of the Company, the Entrepreneurs shall irrevocably
                transfer
                and assign to the Company any and all inventions, discoveries, methods.
                techniques, know-how, information and ideas, whether patentable or
                unpatentable, which relate to “The Technology” and are
                conceived,  discovered or reduced to practice by the
                Entrepreneurs. In addition, upon execution of this Agreement, all
                of the
                Entrepreneurs shall sign a Confidentiality, Proprietary Rights, Invention
                Assignment, in the form attached hereto as Schedule
                G.

            

    

     

    
      	
               

            	
              5.2

            	
              The
                Entrepreneurs shall make good faith efforts to complete the development
                of
                the Products in the shortest time period reasonably
                possible

            

    

     

    
      	
               

            	
              5.3

            	
              The
                Entrepreneurs undertake, for the entire period in which the Company
                is
                operating within the framework of Incubator, to comply with and abide
                by
                the OCS instructions and regulations, as may be amended from time
                to time.
                The Entrepreneurs shall make good faith efforts to fulfill the Incubator’s
                undertaking to the OCS according to the Letter of Undertaking attached
                hereto as Schedule
                B

            

    

     

    The
      Entrepreneurs will defend, indemnify, save and
      hold the Incubator 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    harmless
      from and against the OCS’s and any third party’s claims, demands, suits,
      actions, causes of action, losses, damages, fines and liabilities arising out
      of
      or in connection with the Entrepreneur’s breach of the provisions of this
      Agreement and will pay any costs and damages consequently.

     

    
      	
               

            	
              5.4

            	
              The
                Entrepreneurs certify that they have read the Incubator’s rules and
                guidelines, together with the Incubator’s Letter of Undertaking, and
                hereby undertake to act
                accordingly.

            

    

     

    
      	
              6.

            	
              Supplementary
                Financing

            

    

     

    
      	
               

            	
              6.1

            	
              The
                parties shall negotiate the terms for the provision of the Company
                with
                supplementary financing from the parties or from third parties, required
                according to the Notice of Approval and the Approved Budget
                (“Supplementary Financing”). The Supplementary Financing
                shall be not smaller than the difference between the Approved Budget
                and
                the total amounts which shall be received from the OCS as a grant
                during
                the approved term of the Project. The party providing the Supplementary
                Financing shall be issued Ordinary Shares of the Company in consideration
                for the payment of the Supplementary Financing, as agreed in the
                said
                negotiations.

            

    

     

    
      	
               

            	
              6.2.

            	
              Notwithstanding
                the foregoing, pursuant to the provisions of the Trendlines Agreement
                and
                subject to the consent of the Entrepreneurs (which shall not be
                unreasonably withheld), TIF shall have the right of first offer,
                in full
                priority and preference over any right of any other person or entity
                (other than the Entrepreneurs), to provide the Company with the
                Supplementary Financing, except, in the event that the
                Supplementary Financing will be provided by a Strategic Partner.
                Upon the
                incorporation of the Company, TIF shall advise the Company whether
                it is
                interested to provide the Supplementary Financing. In any event,
                the
                Company shall not receive any Supplementary Financing from any third
                party
                other than TIF in terms more favorable than the terms previously
                offered
                to TIF, unless such terms has been offered to TIF and TIF expressly
                waived
                its right to invest in the Company.

            

    

     

    For
      the
      purposes of this Agreement, “Strategic Partner” shall mean, an individual
      or entity which, in connection with the provision of the Supplementary Financing
      by such individual or entity to the Company, the Board of Directors of the
      Incubator has determined it has a significant added value to the Company due
      to
      its business or technological activity.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              7.

            	
              Confidentiality
                and Non-Competition

            

    

     

    
      	
               

            	
              7.1

            	
              The
                parties agree to hold in strict confidence all confidential information
                and documents received from the other party in connection with the
                transaction contemplated herein and all proprietary information of
                the
                Company, and shall refrain from disclosing such information and documents
                to any third party, and from using such information and documents
                other
                than for the purposes hereof. Notwithstanding any provision to the
                contrary contained herein, each party shall be permitted to disclose
                such
                of the information and documents which is (i) legally required to
                be
                disclosed under applicable law or regulatory requirements; or (ii)
                is or
                becomes within the public domain other than through a breach by such
                party
                of its obligations hereunder.

            

    

     

    
      	
               

            	
              7.2

            	
              The
                Incubator and TIF undertake to make all necessary arrangements to
                prevent
                any of their affiliates, subsidiaries, officers, employees or consultants,
                who are involved in any entity or activity which is in direct competition
                with the business of the Company from having access to and/or from
                making
                use of any information related to the Company which has been obtained
                by
                the Incubator from the Company.

            

    

     

    
      	
              8.

            	
              Raising
                of Additional Capital; ESOP
                Shares

            

    

     

    
      	
               

            	
              8.1

            	
              The
                Incubator shall make good faith efforts to help the Company raise
                additional funds from prospective
                investors.

            

    

     

    
      	
              9.

            	
              Preemptive
                Rights; First Refusal;
                Tag-Along

            

    

     

    Following
      them Incorporation of the Company, the Shares will confer on the holders thereof
      the following rights, subject to and in accordance with the provisions of the
      Articles of Association of the Company as may be amended from time to
      time.

     

    
      	
               

            	
              9.1

            	
              Pre-emptive
                Rights. Until the consummation of an initial public offering of
                Company shares (“IPO”), the shareholders of the Company
                holding at least 5% of the issued and outstanding share capital of
                the
                Company shall be entitled, to participate in all future issuances
                by the
                Company of any capital stock of the Company, except for customary
                exceptions as will be provided in the Company’s Articles of
                Association.

            

    

     

    
      	
               

            	
              9.2.

            	
              Right
                of First Refusal. Until the consummation of an IPO, any shareholder of
                the Company, which holds more than 5% of the issued and outstanding
                share
                capital of the Company, shall have the right of first refusal in
                respect
                of any proposed sale, transfer or other disposition of shares of
                the
                Company by a shareholder. The right of first refusal set forth in
                this
                section shall not apply to the following transfers of shares: (i)
                with
                respect to shares held by a shareholder who is an individual, to
                a
                corporation wholly owned by such shareholder or its spouse, parent,
                child
                or sibling of the respective shareholder; (ii) with respect to shares
                held
                by a shareholder 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        
          	
                   

                	
                   

                	
                  that
                    is a corporation, to any entity controlled by, controlling, or
                    under
                    common control with such shareholder, as the term “control” is defined in
                    the Companies Law; (iii) with respect to shares held by a shareholder
                    that
                    is a limited or general partnership, to its partners and affiliated
                    partnerships managed by the same management company or managing
                    (general)
                         partner or by an entity that controls, is controlled by,
                    or is under
                    common control with, such management company or managing (general)
                    partner; (iv) with respect to shares held by the Incubator, to
                    any person
                    who is acting as the general manager of the Incubator, and (v)
                    with
                    respect to shares held by Steve Rhodes, transfer of shares by
                    him to TIF
                    or TIF’s partners and affiliated partnerships managed by the same
                    management company or managing (general) partner or by an entity
                    that
                    controls, is controlled by, or is under common control with,
                    such
                    management company or managing (general) partner (each of (i),(ii)
                    (iii),
                    (iv) and (v) above - a “Permitted
                    Transferee”).

                

        

         

      

    

    
      	
               

            	
              9.3.

            	
              Tag-along.
                The Incubator, TIF and any of their Permitted Transferees (if such
                Permitted Transferees hold shares in the Company) shall have a tag
                along
                right in respect of transfer of securities by the Entrepreneurs for
                a
                period of four years from the date
                hereof.

            

    

     

    
      	
               

            	
              9.4.

            	
              Restrictions
                on Transfer of Entrepreneurs’ Shares. The Entrepreneurs shall not be
                permitted to transfer their shares in the Company during the period
                in
                which the Company operates within the framework of the Incubator.
                Following such period, the Incubator, TIF and any of their Permitted
                Transferees (if such Permitted Transferees hold shares in the Company)
                shall have a tag along right in respect of transfer of securities
                by the
                Entrepreneurs, other than a transfer to a Permitted
                Transferee.

            

    

     

    
      	
               

            	
              9.5.

            	
              For
                the purposes determining the entitlement to any rights hereunder,
                all
                Shares in the Company held by the Incubator, TIF and Steve Rhodes
                and/or
                any of their Permitted Transferees shall be aggregated and they will
                be
                entitled to the pro-rata portion of any pre-emption and first refusal
                right hereunder.

            

    

     

    The
      provisions of Sections (9.1)-(9.5) above shall be incorporated to the Articles
      of Association of the Company.

     

    
      	
              10.

            	
              Company’s
                Equipment

            

    

     

    Pursuant
      to the Incubator Program’s provisions, all rights and title to the equipment
      supplied by the Incubator and used by the Company during the time the Company
      operates within the framework of the Incubator (“Equipment”)
      shall be vested in the Incubator. The transfer of rights in the Equipment to
      the
      Company’s title shall be made at the sole and absolute discretion of the
      Incubator. It is hereby clarified that the Incubator may decide not to transfer
      any right in the Equipment to the Company’s title.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
      any
      event, the Company shall not be allowed to sell any of the Equipment to any
      third party prior to its completion of payment of all amounts due to the OCS
      under the Incubator Program or any other law or regulation.

     

    
      	
              11.

            	
              Signatory
                Rights in the Company

            

    

     

    
      	
            	
              11.1.

            	
              It
                is hereby agreed that following the incorporation of the Company,
                the
                Board shall adopt the following signatory rights on behalf of the
                Company
                which shall apply to any activity of the Company, including without
                limitation, in the Company’s bank
                account:

            

    

     

    The
      joint
      signature of any two of the following, where at least one signature must be
      from
      group (ii) or group (iii): (i) the Entrepreneur (where there are more than
      one
      entrepreneurs, two Entrepreneurs may have signatory rights); (ii) the General
      Manager of the Incubator; (iii) other representative designated by the Incubator
      for that purpose; together with the Company’s printed name or stamp shall bind
      the Company in every respect.

     

    
      	
            	
              11.2.

            	
              The
                above signatory rights shall apply and remain in full force and affect
                for
                so long as the Company operates within the framework of the Incubator,
                unless the Director appointed by the Incubator agrees to waive the
                signature rights sooner.

            

    

     

    
      	
              12.

            	
              Further
                Undertakings of the Company and the
                Entrepreneurs

            

    

     

    
      	
               

            	
              12.1

            	
              The
                Company shall undertake to reimburse the Incubator for all amounts,
                which
                shall be paid by the Incubator to the OCS for the account of the
                Company.
                The Company shall, upon incorporation, confirm that it irrevocably
                agrees
                to pay to the Incubator, all said amounts, immediately upon demand,
                and
                that it agrees that the demand notices of the OCS shall be sufficient
                to
                substantiate such demand.

            

    

     

    
      	
               

            	
              12.2

            	
              The
                Company shall undertake, for the entire period in which it is operating
                within the framework of Incubator, to comply with and abide by the
                OCS
                instructions and regulations, as may be amended from time to
                time.

            

    

     

    
      	
               

            	
              12.3

            	
              The
                Company undertakes to fulfill its commitments to the OCS including,
                without limitation, the obligation to repay the grant funds by way
                of
                royalty payments on sales of
                Products.

            

    

     

    
      	
               

            	
              12.4

            	
              The
                Incubator shall be furnished with the Company’s financial statements until
                the obligation to pay royalties to the OCS pursuant to law has ceased
                due
                to full repayment of OCS funding or until the Incubator ceases to
                be a
                shareholder, whichever comes later.

            

    

     

    
      	
               

            	
              12.5

            	
              Each
                of the Entrepreneurs hereby declares and agrees that he is fully
                aware of
                and fully understands the provisions of the Law for Encouragement
                of
                Research and Development in industry 5744-1984 (the “Encouragement
                Law”), the Incubator Program and OCS rules (collectively:
                the 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        
          	
                   

                	
                   

                	
                  “Law”)
                    and particularly with the provisions specified
                    below:

                

        

         

      

    

    
      	
               

            	
              (a)

            	
              The
                Company will be required to pay to the state of Israel (OCS) royalties
                on
                the sale of products by the Company pursuant to the
                Law.

            

    

     

    
      	
               

            	
              (b)

            	
              Production
                or products developed by the Company with OCS funding shall be carried
                out
                only in Israel unless the OCS grants a prior written special approval
                to
                the contrary according to Section 19A of the Encouragement
                Law.

            

    

     

    
      	
               

            	
              (c)

            	
              Know-How
                developed by the Company with OCS funding shall not be transferred
                to any
                other party in any manner or form (direct or indirect) without prior
                written OCS approval according to Section 19B of the Encouragement
                Law.

            

    

     

    
      	
               

            	
              (d)

            	
              The
                transfer, granting or issuance of 25% (or more) of the following
                controlling means in the company shall require the prior written
                approval
                of the OCS: (i) voting rights in the Company; (ii) the right to appoint
                director in the Company (iii) the right to participate
                in  allocation of Company’s revenues. In addition, the transfer
                of any of the aforesaid controlling means to a non-Israeli person
                or
                entity shall require the execution of a letter of undertaking by
                such
                person or entity and the prior written approval of the
                OCS.

            

    

     

    
      	
               

            	
              (e)

            	
              So
                as to remove all doubts, the parties agree that the provisions of
                this
                Agreement and all other agreements between the parties shall be subject
                to
                and superseded by any provision contained in the Law, and/or in
                regulations and instructions given by the OCS from time to time in
                regard
                to Incubator Program’s and to entities like the Incubator and the Company
                (“The rules”).

            

    

     

    
      	
               

            	
              (f)

            	
              The
                Entrepreneurs understand and agree to cause the Company to always
                comply
                with the Law and the Rules and further agree that the Incubator shall
                have
                the undisputed legal standing to bring an action for the enforcement
                of
                the obligations set forth in this section as if the obligations toward
                OCS
                and/or the state of Israel were made for the benefit of the Incubator.
                Upon request of OCS and/or the Incubator, the Company and the
                Entrepreneur, jointly and severally, shall be obliged to return to
                the
                Incubator any money spent by the Company in deviation from OCS approved
                budget.

            

    

     

    13.           Miscellaneous

     

    
      	
               

            	
              13.1

            	
              Governing
                Law, Jurisdiction. This Agreement shall be governed by and construed
                according to the laws of the State of Israel, without regard to the
                conflict of laws provisions thereof. Any dispute arising under or
                in
                relation to this Agreement shall be resolved in the competent courts
                of 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        
          	
                   

                	
                   

                	
                  Tel-Aviv
                    - Jaffa District, and each of the parties hereby, submits irrevocably
                    to
                    the jurisdiction of such
                    courts.

                

        

      

       

    

    
      	
            	
              13.2.

            	
              Further
                Assurances. Each of the parties hereto shall perform such further acts
                and execute such further documents as may reasonably be necessary
                to carry
                out and give full effect to the provisions of this Agreement and
                the
                intentions of the parties as reflected
                thereby.

            

    

     

    
      	
            	
              13.3.

            	
              Successors
                and Assigns; Assignment.  Except as otherwise expressly
                limited herein, the provisions hereof shall inure to the benefit
                of, and
                be binding upon, the successors, assigns, heirs, executors, and
                administrators of the parties hereto. None of the rights, privileges,
                or
                obligations set forth in arising under, or created by this Agreement
                may
                be assigned or transferred without the prior consent in writing of
                each
                party to this Agreement.

            

    

     

    
      	
               

            	
              13.4

            	
              Entire
                Agreement; Amendment and Waiver. This Agreement and the Schedules
                hereto constitute the full and entire understanding and agreement
                between
                the parties with regard to the subject matters hereof and thereof,
                and
                substitute and terminate any previous agreements and/or understandings
                between the parties with regard thereto. Any term of this Agreement
                may be
                amended and the observance of any term hereof may be waived (either
                prospectively or retroactively and either generally or in a particular
                instance) only with the written consent of all of the parties to
                this
                Agreement.

            

    

     

    
      	
               

            	
              13.5

            	
              Notices,
                etc. All notices and other communications required or permitted
                hereunder to be given to a party to this Agreement shall be in writing
                and
                shall be faxed or mailed by registered or certified mail, postage
                prepaid,
                or otherwise delivered by hand or by messenger, addressed to such
                party’s
                address as set forth below or at such other address as the party
                shall
                have furnished to each other party in writing in accordance with
                this
                provision:

            

    

     

    
      	
              if
                to the Entrepreneurs

            	
              Ilan
                Grunberg

              15
                Geula st.,

              Haifa

            
	 	 
	
              if
                to the Incubator:

            	
              The
                Incubator for Managing Technology Entrepreneurship Misgay Ltd

              Teradion
                Business Park

              D.N.
                Misgav, 20179

              Israel

              Attn:  General
                Manager

            
	 	 
	
              If
                to TIF

            	
              Trendlines
                Israel Fund, L.P.

              Shorashim

              D.N.
                Misgav, 20164

              Israel

            
	 	
              Attn:  D.
                Todd Dollinger

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Any
      notice sent in accordance with this Section shall be effective (i) if mailed,
      three (3) business days after mailing, (ii) if sent by messenger, upon delivery,
      and (iii) if sent via telecopier, upon transmission and electronic confirmation
      of receipt or (if transmitted and received on a non-business day) on the first
      business day following transmission and electronic confirmation of receipt
      (provided, however, that any notice of change of address shall only be valid
      upon receipt).

     

     

    [Signature
      Page - Founders Agreement]

     

    IN
      WITNESS WHEREOF, the parties execute this Agreement as of the date first written
      above:

     

    
      
        	The
                Incubator for Managing Technology
                Entrepreneurship Misgav	 	
                Misgav
                  Carmiel Technology Incubator Management
                  Services Ltd

              
	 	 	 
	
              	 	
              
	By:     	 	By:     
	
                Title:

              	 	
                Title:  

              
	 	 	 
	 	 	 
	
                Trendlines
                  Israel Fund, L.P.,

              	 	
                
                  Entrepreneur

                

              
	 	 	 
	
              	 	
                /s/
                  Yuval Saezifi

              
	By:    	 	
                Name:   Yuval
                  Saezifi

              
	
                Title: 

              	 	 
	 	 	 
	 	 	 
	
                Entrepreneur

              	 	
                
                  Entrepreneur

                

              
	 	 	 
	
                /s/ Ilan
                  Greenberg

              	 	
                /s/
                  Nissim Ohana

              
	Name:  Ilan
                Greenberg	 	Name:  Nissim
                Ohana
	 	 	 
	 	 	 
	
                
                  Entrepreneur

                

              	 	
              
	 	 	 
	
                /s/
                  Asaf Ben-Arye

              	 	 
	
                Name:  Asaf
                  Ben-Arye

              	 	 
	
                 

              	 	
                
                   

                

              

      

       

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Date:
      15/5/07

     

    Technological
      Incubators Administration

    P.O.
      Box 50031

    Tel-Aviv
      61500

     

    Dear
      Sir/Madam,

     

    
      	
               

            	
              Re:

            	
              Letter
                Of Undertaking And Notice To Begin Performance Of The Project Under
                Incubator Conditions Pursuant To CEO’s Directive
                8.2

            

    

     

    
      	
              Case
                No. 37701

            	
              Concerning:  An
                Arched Implant System To Be Affixed And Anchored In
                Bones

            

    

     

    We,
      Misgav (Incubator Name), Registration No. 512229584 (hereinafter: “The
      Incubator”) hereby declare and undertake as follows:

     

    
      	
              1.

            	
              On
                01/05/2007 the performance of the above captioned approved research
                and development plan began (hereinafter: “The Plan”) in accordance with
                the letter of approval that was given in the above captioned case
                (hereinafter: “The Letter of
                Approval”).

            

    

     

    The
      plan
      is being performed pursuant to Asaf Ben Arieh’s initiative (hereinafter: “The
      Entrepreneur”).

     

    
      	
              2.

            	
              We
                are aware that the grant that was approved in the letter of approval
                will
                be paid subject to the conditions in the letter of approval and the
                conditions set forth below (hereinafter: “The
                Grant”):

            

    

     

    
      	
               

            	
              2.1

            	
              The
                agreement to operate an industrial Entrepreneur research and development
                center under Incubator conditions that was signed between ourselves
                and
                the State on 3.10.06 and all provisions therein are duly being fully
                complied with and will continue to be complied with in their entirety
                in
                accordance with the conditions and provisions therein and constitute
                an
                integral part of this undertaking.

            

    

     

    
      	
               

            	
              2.2

            	
              The
                attached budget and all details, conditions and attachments thereto
                constitute a framework that the undersigned is bound
                by.  Expenses that exceed this detailed framework will not be
                recognized unless approved by the Office of the Chief Scientist at
                the
                Ministry of Industry, Trade and Labor (hereinafter: “The Office of the
                Chief Scientist”).

            

    

     

    
      	
               

            	
              2.3

            	
              The
                plan will be carried out in the Incubator by a research and development
                team and will be organized and registered as a private company within
                three (3) months from the date performance begins (hereinafter: “The
                Project Company”).

            

    

     

    
      	
               

            	
              2.4

            	
              At
                least 10% of the initial ownership rights in the project company
                are
                designated for key persons other than the
                Entrepreneur.

            

    

     

    
      	
               

            	
              2.5

            	
              The
                Incubator will receive a grant for executing the plan and it will
                be kept
                in a separate bank account, in escrow, within the meaning of the
                phrase in
                the Trusts law, 5739-1979.

            

    

     

    
      	
               

            	
              2.6

            	
              The
                Incubator will sign an agreement between itself and the Entrepreneur
                organizing the relationship between them and the rights and duties
                of each
                party 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        	
                 

              	
                 

              	
                insofar
                  as execution of the plan and commercializing the results thereof
                  are
                  concerned.  As part of the agreement between the Incubator and
                  Entrepreneur a clause will be inserted stating that the parties
                  obligations in the agreement pertaining to adhering to the Office
                  of the
                  Chief Scientist at the Ministry of Industry, Trade and Labor directives
                  pertaining to compliance with the conditions in the CEO’s Directive No.
                  8.2 (Technological Entrepreneur Centers-Incubators), and the provisions
                  in
                  the agreement between the Incubator and the State of Israel, the
                  operation
                  of the Incubator plan, the letter of approval and the letter of
                  undertaking for each project and the provisions of the Incubator
                  Committee
                  are also in favor of a third party, being the State within the
                  meaning of
                  the phrase in the Contracts Law (General Part),
                  5733-1973.

              

      

       

    

    
      	
               

            	
              2.7

            	
              The
                Incubator will be entitled to an advance on account of the plan not
                to
                exceed 33% of the approved grant amount in the first year and/or
                payment
                in accordance with the financial statement, provided that it is
                realistically implemented in executing the
                plan.

            

    

     

    
      	
               

            	
              2.8

            	
              All
                additional payments will be made pursuant to a detailed financial
                statement correlating with the Incubators administration’s guidelines
                approved as being correct by the incubator’s competent
                representative.  Payment will be made after a review of the
                statement by the Office of the Chief Scientist.  The financial
                statement will be submitted to the Office of the Chief
                Scientist  once every three
                months.

            

    

     

    
      	
               

            	
              2.9

            	
              A
                material technical report will be submitted to the Office of the
                Chief
                Scientist at least once every six
                months.

            

    

     

    
      	
               

            	
              2.10

            	
              The
                advance will not be offset from payments regarding the financial
                statements provided that during the course of the first year of the
                project there are no deviations from the grant framework that was
                approved
                for the first year and in the second year (and in the event a grant
                was
                approved for the project in the third year - in relation to the third
                year)  there was no deviation from the aggregate grant framework
                approved for the entire plan and for every execution
                term.  Notwithstanding the above, the pace of the expenses being
                dispersed will be routinely examined in accordance with the plan
                and in
                the event the pace is slower than planned the amount of the advance
                will
                be reduced accordingly.

            

    

     

    
      	
               

            	
              2.11

            	
              Supplementing
                documents that were not attached to the financial statements - will
                be
                submitted upon furnishing the following quarterly financial statement
                and
                in any case the supplementary documents will not be handled
                separately.

            

    

     

    
      	
               

            	
              2.12

            	
              Once
                every six months during the two years of the project (and if a grant
                is
                approved for the third year then during the course of the third year
                of
                the project), transfers can be requested interchangeably between
                the
                budget sections.

            

    

     

    
      	
               

            	
              2.13

            	
              All
                payments with respect to the grant will only be a kind of advance
                and this
                until the final financial statements are received and approved as
                set
                forth in sub-section 2.14 below.

            

    

     

    
      	
               

            	
              2.14

            	
              A
                final financial statement approved by an accountant on behalf of
                the
                Incubator and a final material technical report for the plan will
                be
                submitted (hereinafter: “the Final Statements”) no later than three months
                from the date of the end of the execution term.  The final
                statements will be examined and approved by an accountant on behalf
                of the
                Office of the Chief Scientist.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              2.15

            	
              The
                Incubator and the project company’s accounting books will be open for
                review on behalf of the Office of the Chief Scientist for five years
                from
                the date the final financial statement is submitted for the Incubator
                project approved for two years and for four years with respect to
                a
                Incubator project approved for three
                years.

            

    

     

    
      	
               

            	
              2.16

            	
              The
                Office of the Chief Scientists has the right to offset any amount
                owing to
                it from the incubator, Entrepreneur and/or project company from the
                grant.

            

    

     

    
      	
               

            	
              2.17

            	
              The
                execution of the project will not be halted unless with the written
                approval from the Office of the  Chief Scientist.  In
                the event the plan is halted without approval, then the Office of
                the
                Chief Scientist may demand reimbursement of the grant in addition
                to
                linkage differentials and interest prescribed by
                law.

            

    

     

    
      	
               

            	
              2.18

            	
              The
                Office of the Chief Scientist will be entitled to demand additional
                material and/or technical statements during the course of the plan
                execution term.

            

    

     

    
      	
               

            	
              2.19

            	
              An
                expense will not be recognized  unless the consideration thereof
                was paid, to the exclusion of credited expenses as
                approved.

            

    

     

    
      	
               

            	
              2.20

            	
              The
                Office of the Chief Scientist may demand linkage differentials and
                interest prescribed by law on any amount owing to it from the incubator,
                Entrepreneur or the project
                company.

            

    

     

    
      	
               

            	
              2.21

            	
              A
                separate and special bank account will be opened for the purpose
                of
                operating the plan.  Separate accounting will be managed for
                each project company separately.

            

    

     

    
      	
               

            	
              2.22

            	
              The
                State will be paid royalties from the consideration received from
                selling
                the project and/or the know-how to be developed as part of the plan
                and/or
                from the sale of any rights therein, directly or indirectly, at rates
                extending up to the amount of the grant paid in realistic terms and
                pursuant to rules determined by the Incubators
                Committee.

            

    

     

    
      	
               

            	
              2.23

            	
              It
                is hereby declared that no government financing with respect to performing
                the plan was received nor will it be received to the exclusion of
                the
                grant and to the exclusion of the grant from the Tnufa or Nofar
                fund.

            

    

     

    
      	
               

            	
              2.24

            	
              The
                conditions in this letter of undertaking are in addition to any legal
                provision and any law applicable to giving the
                grant.

            

    

     

    
      	
               

            	
              2.25

            	
              Additionally,
                we undertake as follows:

            

    

     

    
      	
               

            	
                             
                2.25.1

            	
              That
                manufacturing of the product to be developed as a result of the research
                and development work in the plan will only be carried out in Israel
                unless
                otherwise decided by the Incubators
                Committee.

            

    

     

    
      	
               

            	
                             
                2.25.2

            	
              The
                know-how that is produced from the research and development work
                in the
                plan and/or the rights therein will not be remitted to another by
                any way
                (directly or indirectly) unless the transfer is approved by the Incubators
                Committee.

            

    

     

    
      	
               

            	
                             
                2.25.3

            	
              To
                abide by the intellectual property laws governing the State of Israel
                during the project company’s activities.  We know that a breach
                of the intellectual property laws as applicable in the State of Israel
                will give 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        	
                 

              	
                 

              	
                rise
                  to the sanctions determined in the law and will allow the State
                  and the
                  Office of the Chief Scientist to retroactively revoke any benefit
                  and/or
                  demand immediate reimbursement of the grant, the benefits and any
                  other
                  amount given with respect to the plan in addition to linkage differentials
                  and interest prescribed by law.

              

         

      

    

    
      	
               

            	
                             
                2.25.4

            	
              That
                the provisions of the Encouragement of Industrial Research and Development
                Law, 5744-1984 in connection with preserving know-how, the rights
                thereon
                and the manufacturing rights produced from the research and the
                development in the state of Israel, will apply to the grant being
                given
                mutatis mutandis.

            

    

     

    
      	
               

            	
                             
                2.25.5

            	
              Subject
                to the provisions in sub-section 2.25.4 the conditions in this letter
                of
                undertaking do not derogate from any legal provision or any law applicable
                to the grant being given.

            

    

     

    
      	
               

            	
              2.26

            	
              The
                obligations set forth in Section 2.23 above will be in effect so
                long as a
                document was not signed pertaining to the transfer of the incubator’s
                duties and rights to another entity and subject to the fact that
                this
                document was transferred to the Office of the  Chief Scientist
                immediately upon signing it and approved by the Office of the Chief
                Scientist.

            

    

     

    Sincerely,

     

    
      	
              (
                -
                )

            	 	 	
              Incubator
                Technology

            
	
              Signature
                of

            	
              Steve
                Rhodes

            	
              CEO

            	
              Misgav
                - Carmiel

            
	
              The
                Authorized Signatory

            	 	 	
              Management
                Services Ltd.

            
	
              On
                the Incubator’s Behalf

            	
              Name

            	
              Position

            	
              Tel.
                04-9591991

            
	 	 	 	
              Stamp

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    

    

    Corporate
      Signature Verification:

     

    I
      Maura Rosenfeld the undersigned Adv./CPA hereby confirm that The
      Incubator to Manage Misgav Technology Entrepreneurs Ltd. is duly registered
      in Israel; that Messer, Steve Rhodes who signed this agreement on its
      behalf signed it in my presence and is authorized to do so on its behalf; and
      that his signature upon this agreement is binding upon the
      corporation.

     

    
      	
              Date:
                15/5/07

            	 	
              Maura
                Rosenfeld

            
	 	 	
              Signature
                and Stamp

            
	 	 	
              MAURA
                ROSENFELD, ADV.

            

    

    

    Comment:  The
      appropriate forms and directives and detailed guidelines to submit the financial
      statements to the Office of the Chief Scientist can be obtained at the Incubator
      Technologies Administration

     

     

    Version:
      18/1/07

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Appendix
      _______________

     

    We
      [Entrepreneurs names or project company’s name] SCORPION, I.D./Private
      Company [Entrepreneurs I.D. Numbers or the project company’s Private company
      number]:513969501 via those authorized to sign on its behalf [Name and
      I.D. number]: Steve Rhodes 01573628, Arnon Epstein 052173390
      (hereinafter: “The Project Company”).  Topic of development:
      Arched implant system to be affixed and anchored in bones.

     

    In
      accordance with the letter of approval No. 37701 (hereinafter: “the Letter of
      Approval”), we hereby undertake and declare as follows:

     

    
      	
              1.

            	
              To
                report to the Office of the Chief Scientist at the Ministry of Industry,
                Trade and Labor via the Center of Incubators for Technological Initiative
                any changes as follows:

            

    

     

    
      	
               

            	
              (a)

            	
              A
                change of control in the project company.  With respect to this
                section the phrase “control” - assumes the same meaning as appearing in
                the Securities Law, 5728-1968;

            

    

     

    
      	
               

            	
              (b)

            	
              A
                change in holdings of the means of control in the project company
                that
                makes a non-Israeli citizen or Israeli resident or corporation
                incorporated in Israel a direct interested party in the project
                company;  with such a report the interested party will sign a
                letter of undertaking in the format published by the technologies
                Incubators administration;  in this respect, “holding” and
                “means of control” - as defined in the Securities Law,
                5728-1968.

            

    

     

    
      	
              2.

            	
              Any
                material change to the project, with respect to the content of the
                research and development or the scope of expenditures required to
                carryout
                the project or with respect to the requirement of manufacturing the
                product in Israel or any other aspect requires the approval from
                the
                Office of the Chief Scientist at the Ministry of Industry, Trade
                and Labor
                via the Center of Incubators for Technological
                Initiative.

            

    

     

    
      	
              3.

            	
              We
                are aware that in any event that the conditions in the letter of
                approval
                or the conditions in the letter of undertaking are not met or
                non-performance of the approved plan, then the Incubators Committee
                may
                immediately halt the payment of the grant, cancel, retroactively
                the
                eligibility to receive the grant and demand immediate reimbursement
                of any
                amounts that were received with respect to the project in addition
                to
                linkage differentials and interest prescribed by
                law.

            

    

     

    
      	
              4.

            	
              We
                are aware that the provisions of the Encouragement of Industrial
                Research
                and Development Law, 5744-1984 in connection with preserving the
                know-how,
                rights thereto and the manufacturing rights produced from the research
                and
                development in the State of Israel will apply to the grant mutatis
                mutandis.

            

    

     

    Sincerely,

     

    
      	
              (
                -
                )

            	 	 	
              Scorpion
                Surgical

            
	
              Entrepreneur/s
                Signature

            	
              Arnon
                Epstein

            	
              CEO

            	
              Technologies
                Ltd.

            
	
              And
                in the event a company

            	
              Steve
                Rhodes

            	
              Director

            	
              Private
                Company 513969501

            
	
              The
                signature of the person

            	
              Name

            	
              Position

            	
              (
                -
                )

            
	
              Authorized
                to bind the company.

            	 	 	
              Incubator
                Technology

              Misgav
                - Carmiel

              Management
                Services Ltd.

              Tel.
                04-9591991

              Stamp

            
	 	 	 
	 	 	 
	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.1

            	
              ACCOMPANYING
                LETTER FROM THE INCUBATOR’S
                ADMINISTRATION

            

    

     

    [MISGAV
      TECHNOLOGY CENTER LOGO] 

    Date:
      15/5/07

     

    Attention:

    Rina
      Friedor - Director of the Incubators for Technological Initiative
      Plan

    29
      Hamered Street, Ha’Ta’asiyanim Building, Tel-Aviv 61500

    P.O.
      Box 50031

     

    
      Re:   
        Request To Operate A New Project

    

     

    We
      request to operate project: Arched implant system to be affixed and anchored
      in
      bones.  Case No: 37701 starting on: 1.5.07.

     

    I
      hereby
      confirm that an agreement was signed between the Entrepreneur and the Incubator
      organizing the Incubator’s and Entrepreneur’s  rights and duties in
      accordance with the Incubator plan’s guidelines.

     

    If
      a
      company has already been registered: the name and number of the company at
      the
      Companies Registrar’s office.

     

    Attached
      hereto are the requisite documents:

     

    
      	
               

            	
              1.

            	
              A
                signed and approved budget.

            

    

    
      	
               

            	
              2.

            	
              A
                signed letter of undertaking

            

    

    
      	
               

            	
              3.

            	
              Account
                details form

            

    

     

    All
      of
      the foregoing material is remitted to you in 4 complete copies and concurrently
      sent to you also by electronic mail.

     

    
      	
              Technology
                Incubator

              Misgav
                - Carmiel

              Management
                Services Ltd.

              -
                )

            	 	 
	
              Tel:
                04-9991991

              Signature
                of the Incubator’s Manager

            	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

    DEFINITIONS
      AND INSTRUCTIONS FOR COMPLETING

    THE
      BUDGET FORM AND THE APPENDICES

     

     

    First
      fill in the name of the company and the research subject.

     

    The
      first
      budget sheet is completed automatically upon completion of the detailed
      sheets.

     

    Code
      10
      in the salary ceiling is used as a code defining the 0 value; the code should
      not be changed in the definition table.

     

    The
      budget refers to the entire period (two years). Please fill in the appropriate
      data for each year in the adequate place.

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Privatized
                Incubator(Yes - 1, No - 0)

            	 	
              0

            
	
              Name
                of the Company(in course of establishment):

            	
              Scorpion
                (provisional name)

            
	
              R
                & D Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Period
                of the two-year research:

            	
              From:

            	
              May
                07

            	
              To:

            	
              April
                09

            	 
	
              File
                number:

            	
              37701

            

    

    

    
      	
              Salary
                Code

            	
              Description

            	
              Ceiling

            	 
	 	 	
              Regular

            	
              Privatized

            	
              20
                %

            	
              55,000

            
	
              1

            	
              Senior

            	
              17,000

            	
              25,000

            	 	 
	
              2

            	
              Other

            	
              10,000

            	
              25,000

            	 	 
	
              10

            	
              Default

            	
              0

            	
              0

            	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Cost
                Code

            	 
	
              1

            	
              Price
                offer

            
	
              2

            	
              Contract

            
	
              3

            	
              Tariff

            
	
              4

            	
              Estimate

            

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

    CENTRALIZATION
      OF THE BUDGET (DO NOT COMPLETE - COMPLETION TAKES PLACES AUTOMATICALLY AFTER
      FILLING OUT THE DETAILED SHEETS)

    

    This
      sheet represents an integral part of the request.

    (Please
      fill in first the definition sheet of salaries and overhead
      ceilings)

    

    
      	
               

            	
              PROJECT
                BUDGET OF THE CHIEF SCIENTIST
                OFFICE

            

    

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and
                anchoring

            
	
              Number
                of Request:

            	
              37701

            
	
              Execution
                period

            	
              From
                (month/year)

              To
                (month/year)

            	
              May
                07

              April
                09

            

    

     

    
 

    
      	
              COMPANY
                REQUEST

            
	 	 	
              Total

            	
              Part
                in %

            
	
              A.
                MANPOWER

              See
                Appendix 1

            	
              Man
                years

            	
              2,91666667

            	
              578,500

            	 
	
              Reserve

            	
              0

            	 
	 	
              Total

            	 
	 	
              578,500

            	
              40
                %

            
	
              B.
                CONSUMABLE MATERIALS AND TOOLS

              See
                Appendix 2

            	 	 	
              Total

            	 
	
              35,000

            	
              2
                %

            
	
              C.
                SUBCONTRACTORS

              See
                Appendix 3

            	 	 	 	 
	
              Subcontractors
                - Israel

            	 	
              Sum

            	
              250,500

            	
              17
                %

            
	
              Subcontractors
                - abroad

            	 	
              Sum

            	
              180,000

            	
              13
                %

            
	 	 	
              Total
                subcontractors

            	
              430,500

            	
              30
                %

            
	
              D.
                APPROVED EQUIPMENT

            	 	 	
              Total

            	 
	
              See
                Appendix 4

            	 	 	
              52,600

            	
              4
                %

            
	
              E.
                MISCELLANEOUS

            	 	 	
              Total

            	 
	
              See
                Appendix 5

            	 	 	
              230,000

            	
              16
                %

            
	
              F.
                MARKETING

            	 	 	
              Total

            	 
	
              See
                Appendix 3

            	 	 	
              110,000

            	
              8
                %

            
	
              GENERAL
                TOTAL

            	 	
              Total

            	 
	
              Total
                budget

            	
              1,436,600

            	
              100
                %

            
	
              Loan
                / grant

            	
              1,221,110

            	
              85
                %

            
	
              SIGNATURES:

            	
              Technical
                Incubator

              Misgav-
                Karmiel

              Management
                services Ltd

              Tel:
                04-9991991 Stamp/(sig)

            	
              Scorpion
                Surgical Technologies Ltd.

              Private
                Company 513969501 Stamp/(Sig)

            
	
              PROJECT
                MANAGER

            	
              TECHNOLOGICAL
                INCUBATOR MANAGER

            	
              DIRECTION
                OF TECHNOLOGICAL
                INCUBATORS

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

    
      	
              Page
                no. 1

            	
              APPENDIX
                1 - MANPOWER

            	
              This
                sheet represents an integral part of the
                request.

            

    

    

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              37701

            

    

    

    
      	
              EFFECTIVE
                SALARY INCLUDING SOCIAL PAYMENTS - EMPLOYER COST -

              PAYMENTS
                FIGURING IN THE PAYROLL AND DIRECT SOCIAL
                EXPENDITURES

            
	
              COMPANY
                REQUEST

            	
              REQUESTED
                SUM IN N.I.S

            	 
	
              Monthly

            	 
	
              #.

            	
              Name
                and surname

            	
              Salary
                code

            	
              Academic
                title

            	
              Function

            	
              Effective
                salary including social payments

            	 	 	
              Number
                of months

            	 	
              Requested
                man years

            	
              Effective
                salary

            
	
              1.

            	
              Arnon
                EPSTEIN

            	
              1

            	
              BA

            	
              Product
                Engineer

            	
              17,000

            	
              17,000

            	
              100
                %

            	
              24

            	
              408000

            	
              2.0

            	
              408,000

            
	
              2.

            	
              Not
                decided zet

            	
              2

            	
              BA

            	
              Engineer

            	
              15,500

            	
              17,000

            	
              100
                %

            	
              11

            	
              170500

            	
              0.9

            	
              170,500

            
	
              3.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              4.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              5.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              6.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              7.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              8.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              9.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	
              10.

            	 	
              10

            	 	 	
              0

            	 	 	 	
              0

            	
              0.0

            	
              0

            
	 	 	 	 	 	 	 	 	
              Total
                salaries

            	
              578,500

            	
              2.9

            	
              578,500

            
	 	 	 	 	 	 	 	 	
              Future
                price rises

            	 	 	 
	 	 	 	 	 	 	 	 	
              Total
                approved salary

            	
              578,500

            	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

     

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

     

    APPENDIX
      2 - CONSUMABLE MATERIALS AND TOOLS

     

    This
      sheet represents an integral part of the request.

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              37701

            

    

    

    
      	 	 	 	
              COMPANY
                REQUEST

            
	
              #.

            	
              Description
                of item or type

            	
              Ensemble
                to which pertains the requested item

            	
              Cost
                code

            	
              Cost
                based on

            	
              Unit
                price in NIS

            	
              Quantity

            	
              Total
                requested sum

            
	 	 	 	 	 	 	 	 
	
              1.

            	
              Various
                metallic parts

            	
              Prototypes

            	 	
              N/A

            	
              20,000

            	
              1

            	
              20,000

            
	
              2.

            	
              Bones

            	
              Tests

            	 	
              N/A

            	
              5,000

            	
              1

            	
              5,000

            
	
              3.

            	
              Other
                consumables

            	
              Lab
                tests

            	 	
              N/A

            	
              10,000

            	
              1

            	
              10,.000

            
	
              4.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              5.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              6.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              7.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              8.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              9.

            	 	 	 	
              N/A

            	 	 	
              0

            
	
              10.

            	 	 	 	
              N/A

            	 	 	
              0

            
	 	 	 	 	 	 	 	 
	 	
              Total
                materias

            	
              35,.000

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST -

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

     

    APPENDIX
      3 - SUBCONTRACTORS

     

    This
      sheet represents an integral part of the request.

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              37701

            

    

    

    
      	 	 	 	
              COMPANY
                REQUEST

            
	
              #

            	
              Nature
                of the work

            	
              Name
                of the subcontractor (all subcontractors will be centralized according
                to
                the nature of the work)

            	 	
              Requested
                sum in NIS

            
	 	
              Cost

            	
              Cost
                based on

            	
              Quantity

            	
              Unit
                price

            	
              Total

            
	
              SUBCONTRACTORI
                - ISRAEL

            
	
              1.

            	
              Prototype
                production

            	
              Center,
                Metadin,
                Hanan Avidan, other

            	
              4

            	
              Approx.

            	
              1

            	
              95,000

            	
              95,000

            
	
              2.

            	
              Implant
                production

            	
              Center,
                Limet,
                other

            	
              4

            	
              Approx.

            	
              1

            	
              95,000

            	
              95,000

            
	
              3.

            	
              Planning
                of a regulatory procedure

            	
              Not
                decided yet

            	
              4

            	
              Approx.

            	
              1

            	
              10,000

            	
              10,000

            
	
              4.

            	
              Regulatory
                consultancy and quality
                NGW

            	
              Dan
                Laor

            	
              4

            	
              Approx.

            	
              1

            	
              20,000

            	
              20,000

            
	
              5.

            	
              Engineering
                planning

            	
              Not
                decided yet

            	
              4

            	
              Aprox.

            	
              1

            	
              30,500

            	
              30,500

            
	
              6.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              7.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              8.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              9.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              10.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              11.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              12.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              13.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              14.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	
              15.

            	 	 	 	
              N/A

            	
              1

            	 	
              0

            
	 	
              Total
                subcontractors - Israel

            	 	
              Total
                subcontractors - Israel

            	
              250,500

            
	
              SUBCONTRACTORS
                - ABROAD

            
	
              1.

            	
              Mechanical
                tests

            	
              Dr.
                Christian Kadik

            	
              4

            	
              Approx.

            	
              2

            	
              25,000

            	
              50,000

            
	
              2.

            	
              Biomechanical
                tests

            	
              Ulm
                University, Department of Biomechanics

            	
              4

            	
              Approx.

            	
              1

            	
              130,000

            	
              130,000

            
	
              3.

            	 	 	 	
              N/A

            	
              2

            	 	
              0

            
	
              4.

            	 	 	 	
              N/A

            	
              3

            	 	
              0

            
	
              5.

            	 	 	 	
              N/A

            	
              4

            	 	
              0

            
	 	
              Total
                subcontractors abroad

            	 	 	
              Total
                subcontractors abroad

            	
              180,000

            
	 	 	 	 	 	 
	 	
              TOTAL
                SUBCONTRACTORS

            	
              430,500

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST -

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

     

    APPENDIX
      4 - EQUIPMENT

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              0

            

    

    

    
      	
              #

            	
              Description
                of equipment or item

            	
              Description
                of activities in which the part of equipment is
                involved

            	
              Unit
                cost in NIS

            	
              Quantity

            	
              Cost
                code

            	
              Total
                cost

            
	 
	
              1.

            	
              Furniture

            	
              Company
                Management

            	
              3,000

            	
              1

            	
              4

            	
              3,000

            
	
              2.

            	
              Computer

            	
              Company
                Management

            	
              10,000

            	
              1

            	
              4

            	
              10,000

            
	
              3.

            	
              Work
                tools

            	
              Prototype
                design

            	
              600

            	
              1

            	
              4

            	
              600

            
	
              4.

            	
              Software

            	
              Company
                Management

            	
              25,000

            	
              1

            	
              4

            	
              25,000

            
	
              5.

            	
              Measuring
                instruments

            	
              Prototype
                design

            	
              4,000

            	
              1

            	
              4

            	
              4,000

            
	
              6.

            	
              Miscellaneous

            	
              Company
                Management

            	
              10,000

            	
              1

            	
              4

            	
              10,000

            
	
              7.

            	 	 	 	 	 	
              0

            
	
              8.

            	 	 	 	 	 	
              0

            
	
              9.

            	 	 	 	 	 	
              0

            
	
              10.

            	 	 	 	 	 	
              0

            
	
              11.

            	 	 	 	 	 	
              0

            
	
              12.

            	 	 	 	 	 	
              0

            
	 	
              Total
                Equipment

            	
              52,600

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

     

    APPENDIX
      5 - MISCELLANEOUS (as specified in the regulations)

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              0

            

    

    

    
      	
              #

            	
              Activity

            	
              Total

            
	 
	
              1.

            	
              Overhead
                (according to the established ceiling)

            	
              110,000

            
	
              2.

            	
              Patents

            	
              50,000

            
	
              3.

            	
              Clinical
                tests

            	
              30,000

            
	
              4.

            	
              Travel
                abroad - tests

            	
              40,000

            
	
              5.

            	 	 
	 	 	
              230,000

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    OFFICE
      OF THE CHIEF SCIENTIST

    DIRECTION
      OF TECHNOLOGICAL INCUBATORS

     

     

    APPENDIX
      6 - MISCELLANEOUS (as specified in the regulations)

     

    
      	
              Technological
                Incubator:

            	
              Technological
                Incubator Misgav, Karmiel

            
	
              Name
                of the Company:

            	
              Scorpion
                (provisional name)

            
	
              R&D
                Subject:

            	
              Arched
                implants’ system for bones’ fixation and anchoring

            
	
              Number
                of Request:

            	
              0

            

    

    

    
      	
              #

            	
              Activity

            	
              Total

            
	 
	
              1.

            	
              Business
                plan

            	
              25,000

            
	
              2.

            	
              Business
                meetings abroad

            	
              80,000

            
	
              3.

            	
              Marketing
                materials

            	
              5,000

            
	
              4.

            	 	 
	
              5.

            	 	 
	
              6.

            	 	 
	
              7.

            	 	 
	
              8.

            	 	 
	
              9.

            	 	 
	
              10.

            	 	 
	
              11.

            	 	 
	
              12.

            	 	 
	 	
              Total
                marketing

            	
              110,000

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SERVICES
      AGREEMENT

     

    Executed
      and signed on the 1st  day of
      the 5th  month
      in the year 2007.

     

    
      	
              BY:

            	
              Scorpion
                Technologies Analysis Ltd.

            

    

    
      	
            	
               

            	
              (Private
                Company 51-3969501)

            

    

    
      	
            	
               

            	
              Tardion
                Industrial Area, Rural Mail Mishgav
                20179

            

    

    
      	
            	
               

            	
              (Hereinafter:
                “The Company”)

            

    

     

     

    On
      the One Part

     

    
      	
              AND
                BETWEEN:

            	
               Arnon
                Epstein (I.D. 052173390)

            

    

    
      	
            	
               

            	
              Korzim,
                Zip Code 12391

            

    

    
      	
            	
               

            	
              (Hereinafter:
                “The Expert”)

            

    

     

     

    On
      the Second Part

     

    
      	
              WHEREAS:

            	
              The
                Expert declares that he has the expertise, experience and know-how
                in
                order to assist the Company in the mechanical planning and development
                field.

            

    

     

    
      	
              AND
                WHEREAS:

            	
              The
                Company is interested in hiring the Expert’s services in his field of
                expertise and the Expert is interested in rendering these services
                to the
                Company as an independent contractor with respect to matters that
                are
                within his field of expertise and the Expert’s experience, pursuant to the
                conditions set forth in this
                agreement;

            

    

     

    
      	
              AND
                WHEREAS:

            	
              The
                Expert undertakes to be loyal to the Company with respect to all
                actions
                associated with rending the services pursuant to this
                agreement;

            

    

     

    
      	
              AND
                WHEREAS:

            	
              The
                Expert declares and undertakes that there is no obstacle pursuant
                to an
                agreement or any other manner restricting him from engaging in this
                agreement and that he is entitled to assume all the obligations pursuant
                to this agreement.

            

    

     

    Therefore
      It Is Agreed, Declared And Stipulated Between The Parties As
      Follows:

     

    
      	
              1.

            	
              The
                Expert’s Services

            

    

     

    
      	
               

            	
              1.1

            	
              The
                Expert will render his services to the Company that are set forth
                in
                Appendix A to this agreement as well as additional
                services to be agreed upon between the parties from time to time
                (hereinafter: “His
                Services”).

            

    

     

    
      	
               

            	
              1.2

            	
              The
                Expert undertakes to fulfill his duties and obligations pursuant
                to this
                agreement professionally and to the Company’s complete
                satisfaction.  The Expert acknowledges that the turnaround time
                and rendering the services are a crucial part of this agreement and
                will
                do his utmost to meet the timeframe determined to render the
                services.

            

    

     

    
      	
              2.

            	
              The
                Parties Relationship

            

    

     

    It
      is
      hereby agreed and declared that the Expert’s status or anyone on his behalf
      hired by him to render the Expert’s services is that on an outside expert with
      an independent business and that there is no employer-employee relationship
      between the parties.  The 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Company
      will not be liable toward the Expert and/or anyone on his behalf with respect
      to
      any matters that an employer is liable for its employees, and the Expert and/or
      anyone on his behalf will be considered independent contractors for all senses
      and purposes.  For the sake of removing any doubt it is clarified that
      payments for his services include all the payments owing to him (gross) and
      he
      will not be entitled to any other additional payment with respect to direct
      and
      indirect expenses of any type that were caused by the Expert and/or anyone
      acting on his behalf.  Likewise, all the mandatory payments pursuant
      to the law or agreement, including but not limited to payments of income tax
      and
      national insurance applicable to the Expert and/or anyone acting on his behalf,
      will be paid directly by the Expert and he will be exclusively liable for the
      payment thereof.  If, despite the parties declared intentions it is
      later determined by a competent judicial instance that an employer-employee
      relationship does exist between the Company and the Expert and/or anyone on
      its
      behalf, and that the Expert and/or anyone acting on its behalf is entitled
      to
      payments with respect to rights deriving from an employer-employee relationship,
      the Expert undertakes to indemnify the Company, upon its first demand to do
      so,
      any expense, damage or loss it sustains as a result thereof.  The
      Company will be entitled to offset the amounts owing to it pursuant to this
      section from the payments that the Expert is entitled to in return for the
      service.

     

    
      	
              3.

            	
              The
                Expert’s Warranties

            

    

     

    The
      Expert declares that he has the ability, skills, know-how, capability and
      experience necessary in order to render the service.  The Expert
      undertakes to render the service loyally, with expertise and skills in order
      to
      promote the Company’s issues in the field of service.  The Expert
      declares that no person has the exclusive right to receive the services in
      the
      service field he is rendering to the Company and that he is not breaching any
      obligation toward a third party or creating a possible conflict of interests
      by
      rendering the service.  The Expert undertakes to render the service
      without using a third party’s hardware, equipment or trade
      secrets.  The Expert declares that he is aware and agrees to the fact
      that he will not have any right to withhold or to impose a charge over documents
      or materials associated with rendering the service of any type and he will
      not
      be entitled, for any reason, to prevent delivery thereof to the Company
      immediately upon being required to do so by the Company, and/or to prevent
      use
      thereof as the Company deems fit.  The Expert will notify the Company
      forthwith of any personal interest he may personally have or anyone acting
      on
      his behalf may have that may constitute or create a conflict of interests with
      his role or function in the Company.

     

    
      	
              4.

            	
              The
                Agreement Period

            

    

     

    
      	
               

            	
              4.1

            	
              The
                agreement will be in effect starting on the day it is signed and
                until his
                services have ended unless the relationship was terminated on an
                earlier
                date as stated in this agreement.  It is hereby agreed that at
                the end of the agreement period the parties will discuss the option
                of
                extending the agreement on an as needed basis and their mutual willingness
                to do so, however this does not constitute an obligation by either
                of the
                parties to extend the agreement by any
                period.

            

    

     

    
      	
               

            	
              4.2

            	
              During
                the entire agreement period either one of the parties may terminate
                the
                agreement for any reason and at any time provided that written notice
                thereof was given 30 days in advance to the other
                party.

            

    

     

    
      	
               

            	
              4.3

            	
              Despite
                the foregoing and in addition to the provisions in Section 4.2 above,
                during the entire agreement period the Company will be entitled to
                bring
                this agreement to an end forthwith, without any advance notice, and
                the
                Expert’s 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      
        	
                 

              	
                 

              	
                services
                  to the Company pursuant to this agreement will cease forthwith
                  upon the
                  occurrence of one or more of the following
                  instances:

              

      

       

    

    
      	
               

            	
              4.3.1

            	
              The
                Expert committed an act and/or omission of a criminal nature and/or
                a
                shameful offense;

            

    

     

    
      	
               

            	
              4.3.2

            	
              The
                Expert deliberately and consistently refuses to fulfill his obligations
                pursuant to this agreement;

            

    

     

    
      	
               

            	
              4.3.3

            	
              The
                Expert materially breached the agreement and did not remedy the breach
                within 7 days of a written notice being sent to the Expert with respect
                to
                the foregoing breach;

            

    

     

    
      	
               

            	
              4.3.4

            	
              The
                Expert breached one or more of its obligations as set forth in the
                non-disclosure appendix attached hereto as Appendix B to this
                agreement.

            

    

     

    
      	
              5.

            	
              Payments

            

    

     

    
      	
               

            	
              5.1

            	
              Subject
                to the fulfillment of the Expert’s obligations pursuant to this agreement,
                the Company will pay the Expert for his services and for any other
                action
                taken in order to fulfill his obligations pursuant to this agreement,
                $35
                per hour of work that is reported (hereinafter: “The
                Payment”).  VAT prescribed by law will be duly added to the
                payment and any deduction at source will be deducted that the Company
                is
                obligated to deduct pursuant to the
                law.

            

    

     

    
      	
               

            	
              5.2

            	
              During
                the course of this agreement period the Expert will submit to the
                Company,
                at the end of each month, a duly executed tax invoice for the payment
                owing to him for the services rendered in the preceding
                month.  The invoices will include an itemization of the hours of
                work performed during the course of the preceding
                month.

            

    

     

    
      	
               

            	
              5.3

            	
              For
                the sake of removing any doubt it is hereby clarified that the Expert
                maintains an independent business that is not an integral part of
                the
                Company’s businesses and that the Expert will bear all the tax and
                surcharges costs associated with his activities pursuant to this
                agreement, including but not limited to employing employees or others
                on
                his behalf to render the services.

            

    

     

    
      	
               

            	
              5.4

            	
              It
                is hereby clarified that the payment also includes payment for
                reimbursement of expenses expended by the Expert during the course
                of
                rendering his service and under no circumstances will the Company
                pay the
                Expert any additional amount exceeding the payment with respect to
                the
                reimbursement of expenses or any other payment to the exclusion of
                special
                travel expenses to be approved separately and in advance by the
                Company.

            

    

     

    
      	
              6.

            	
              Reports

            

    

     

    
      	
               

            	
              6.1

            	
              During
                the course of this agreement period the Expert will be subject to
                the
                instructions of a competent Company representative responsible for
                the
                Expert’s field of activity or any other person on the Company’s behalf
                (hereinafter: “The
                Representative”).

            

    

     

    
      	
               

            	
              6.2

            	
              The
                Expert will continuously keep in contact with the representative,
                orally
                or in writing, in accordance with the circumstances, while stressing
                the
                activities, 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        
          	
                   

                	
                   

                	
                  results,
                    findings, authorities required and any other relevant
                    information.

                

        

      

       

    

    
      	
              7.

            	
              Confidentiality,
                Intellectual Property Rights and
                Non-Competition

            

    

     

    As
      a
      condition precedent to the Company signing this agreement and fulfilling its
      obligations pursuant hereto, the Expert (and anyone acting on his behalf
      involved in his services) will sign, concurrent with signing this agreement
      or
      thereafter, a non-disclosure letter of undertaking  in the format
      attached hereto in Appendix B to this agreement.

     

    
      	
              8.

            	
              Miscellaneous

            

    

     

    
      	
               

            	
              8.1

            	
              The
                Company intends on adopting an options plan and as part of the plan
                the
                Company intends on granting the Expert options equivalent to 2% of
                the
                total number of shares allotted upon establishing the
                Company.

            

    

     

    
      	
               

            	
              8.2

            	
              The
                Company will be entitled to assign its rights and duties pursuant
                to this
                agreement to its parent company and/or subsidiary company and/or
                other
                bodies associated with it or any other third party without having
                to
                obtain the Expert’s consent provided that the third party fulfills the
                Company’s obligations pursuant to this agreement.  The Expert
                will not be entitled to assign his rights and duties pursuant to
                this
                agreement unless with the Company’s approval in writing and in
                advance.

            

    

     

    
      	
               

            	
              8.3

            	
              The
                preamble to this agreement and all appendices attached hereto constitute
                an integral part of the agreement.

            

    

     

    
      	
               

            	
              8.4

            	
              The
                headings of the sections are solely for convenience purposes and
                will not
                be granted any weight upon construing this
                agreement.

            

    

     

    
      	
               

            	
              8.5

            	
              The
                parties’ addresses for the purpose of this agreement are as noted at the
                top of the agreement and any notice sent from one party to the other
                by
                registered mail pursuant to the foregoing address will be considered
                as
                reaching its destination one week after it is delivered or upon delivery
                if hand delivered.

            

    

     

    
      	
               

            	
              8.6

            	
              This
                agreement and appendices hereto includes all the consents between
                the
                parties pertaining to the subject matter and hereby revokes any prior
                discussions, agreements, understandings and warranties pertaining
                to this
                matter.  No changes will be made to this agreement unless with
                the two parties signatures.

            

    

     

    
      	
               

            	
              8.7

            	
              The
                sections intended to remain in effect even after the expiration of
                the
                relationship period include, inter alia, and without prejudicing
                the generality of the foregoing, Appendix B to this agreement , will
                remain in effect as stated above.

            

    

     

    In
      Witness Hereof The Parties Hereto Set Their Hands:

     

    
      	
              Scorpion
                Technologies Analysis Ltd.

            	 	 
	
              [Company
                Name]

            	 	
              The
                Expert

            
	 	 	 
	
              By:             
                /s/ Asaf-Ben Arye

            	 	
              /s/
                Arnon Epstein

            
	
              Position:    Director

            	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
      A

    THE
      EXPERT’S SERVICES

     

    
      	
              1.

            	
              Responsible
                to lead the product development
                process.

            

    

    
      	
              2.

            	
              Hold
                consults with experts in the product field and concentrating points
                and
                conclusions to implement the development process and
                planning.

            

    

    
      	
              3.

            	
              Responsibility
                and performance of the mechanical development and
                planning.

            

    

    
      	
              4.

            	
              Issuing
                orders and work to sub-contractors.

            

    

    
      	
              5.

            	
              Overseeing
                performance, approval and accepting work from
                sub-contractors.

            

    

    
      	
              6.

            	
              Approving
                payments to sub-contractors.

            

    

    
      	
              7.

            	
              Reports
                and updates pertaining to the process status to manage the
                Company.

            

    

    
      	
              8.

            	
              Following
                up on the accountant’s expenses and financial statements and apprising the
                management thereof.

            

    

    
      	
              9.

            	
              Handling
                administrative matters with the management’s assistance on an as needed
                basis.

            

    

     

    APPENDIX
      B

    NON-DISCLOSURE
      LETTER OF UNDERTAKING

     

    I
      the
      undersigned, Arnon Epstein, I.D. 052173390, hereby declare toward
Scorpion Technologies Analysis Ltd. and toward any subsidiary of the
      Company and/or affiliated company, in Israel and abroad (hereinafter:
“The Company”), that I am aware that during the course of
      working for the Company (hereinafter: “My Work”) I will be
      exposed to and/or in receipt of information pertaining to the Company (as
      defined below) and that I am aware that the information is some of the Company’s
      primary and crucial assets and therefore I declare and undertake as
      follows:

     

     

    Confidentiality

     

    
      	
              1.

            	
              To
                keep absolutely secret and not to disclose and/or transfer, directly
                or
                indirectly, to any person or body, including but not limited to the
                Company employees, whereby the information is not needed to fulfill
                their
                roles, any information that reaches and/or is to reach my possession,
                oral, in writing and/or in any form and/or other media, as part of
                my work
                and/or in connection thereto, whether directly or indirectly, including
                but not limited to information that I created and/or information
                that
                reached me from others associated directly or indirectly with the
                Company.

            

    

     

    “Information”
      -in this letter of undertaking means any information and knowledge that I
      currently and/or in the future will possess that is associated and/or relates
      in
      any way to the Company and/or its business and/or its
      activities.  Information includes, solely for illustrative purposes,
      and without derogating from the generality of the foregoing, any information
      connected directly or indirectly to research and development associated with
      the
      Company’s existing or future products, inventions, hardware, software,
      manufacturing processes, discoveries, improvements, developments, designs,
      drawings, ideas, calculations, diagrams, formulas, data, client list, list
      of
      suppliers, pricing, prices, plans and any other information associated with
      the
      Company’s business and/or is clients, including but not limited to clients who
      are negotiating with the Company.

     

    
      	
              2.

            	
              Not
                to remit and/or deliver, directly or indirectly, to any person and/or
                body, material, raw material, product, parts of products, documents,
                diskettes and/or information as defined above, and not to make any
                use of,
                including but not limited to duplicating, manufacturing, selling,
                transferring, imitating and distribution, copying, all or some of
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        	
                 

              	
                the
                  information, to the exclusion of use necessary in order to perform
                  my work
                  that is being carried out for the Company with its consent and
                  solely for
                  its benefit.

              

      

       

    

    
      	
              3.

            	
              To
                remit to the Company any material and/or information that I have
                in my
                control on any media, associated with my work in the Company and/or
                that
                was created during the course of my work therein, in any case that
                the
                relationship between the Company and myself comes to an end and without
                any connection to the reason for the relationship coming to an end
                as
                stated above and this immediately upon giving notice pertaining to
                the
                relationship coming to an end.

            

    

     

    
      	
              4.

            	
              To
                assist the Company in fulfilling the Company’s obligations toward the
                suppliers, clients and/or other third parties to keep the information
                secret that they gave to the Company and non-competition
                thereof.

            

    

     

     

    Intellectual
      Property Rights

     

    
      	
              5.

            	
              All
                the rights, including but not limited to intellectual property rights
                of
                the various kinds, any inventions, product, processes, development,
                improvement, idea, creation, formula, code, conclusion, discovery,
                finding
                and/or information, whether they can be protected as a patent or
                copyrighted or not, whether they can be registered or not, that I
                am to
                manufacture, develop and/or discover whether myself or with others,
                during
                the course of and/or in connection with my work serving the Company
                (hereinafter: “My Work Products”) will be the Company’s
                exclusive property.

            

    

     

    The
      Company will have the exclusive rights to “my work product” in Israel and abroad
      and I will not be entitled to make any use of “my work product” nor will I be
      entitled to any additional consideration beyond the consideration determined
      between the Company and myself.

     

    Without
      derogating from the foregoing, I hereby waive and/or endorse to the Company
      and
      hereby undertake to waive and/or endorse in the future all my rights to “my work
      product” including but not limited to the moral right, insofar as I have or will
      have such rights.

     

    For
      the
      sake of removing any doubt it is hereby clarified that the Company will be
      entitled to use “my work product” as it deems fit and without any restrictions
      whatsoever.

     

    
      	
              6.

            	
              To
                assist and cooperate with the Company in any reasonable way in order
                to
                transfer the rights to “my work product” to the Company and/or register
                the rights to “my work product” in any registry in the Company’s name in
                Israel and/or abroad and/or to protect and/or to enforce in any other
                way
                the Company’s rights as stated above, including but not limited to signing
                the transfer documents and other documents as well as giving affidavits
                or
                testimony orally before the authorities or various types of judicial
                instances.

            

    

     

    It
      is
      hereby stressed that this obligation will also apply after I have finished
      rendering my services to the Company provided that the Company assumes all
      the
      costs connected with fulfilling this obligation.

     

    
      	
              7.

            	
              Not
                to remit and/or not to use during the course of my work any material
                and/or information belonging to a third party, including material
                and
                information belonging to a previous employer and/or previous service
                receiver unless I obtained the consent thereto in advance and in
                writing
                from the Company.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              8.

            	
              To
                report to the Company any information concerning “my work product” that I
                have accumulated during the course of carrying out my
                work.

            

    

     

     

    Non-Competition

     

    
      	
              9.

            	
              I
                declare that there is no conflict of interests between my work for
                the
                Company and other work that I am performing or performed in the past,
                that
                I am not competing, directly or indirectly with the Company and that
                I
                will not compete with the Company during the time I am rendering
                the
                services and for one year thereafter, myself or as part of the work
                and/or
                rendering services to entities competing with the Company and/or
                any other
                way.

            

    

     

    “Competing
      Entities” - in this letter of undertaking means any corporation or
      person, dealing in any one of the following fields:

     

    
      	
               

            	
              9.1

            	
              Developing,
                manufacturing and/or marketing products and/or development processes
                that
                are identical or similar to those developed, manufactured and/or
                marketed
                by the Company;

            

    

     

    
      	
               

            	
              9.2

            	
              Involvement
                in the commercial, organizational and/or technological processes,
                technologies or equipment associated with the Company’s
                activities.

            

    

     

    
      	
              10.

            	
              I
                will not solicit the Company employees to leave their work, I will
                not
                hire them directly or indirectly nor assist them to find work with
                competing entities and this during the period I render services or
                thereafter.

            

    

     

     

    Liability

     

    
      	
              11.

            	
              I
                am aware that a breach of my obligations pursuant to this letter
                of
                undertaking or any part hereof may cause the Company and/or bodies
                affiliated thereto, grave and irreparable damages that monetary
                compensation cannot constitute a remedy or appropriate relief thereof
                and
                therefore  I agree not to object, in the event of a breach of
                any of my obligations pursuant to this letter of undertaking, that
                a
                competent court issue a temporary injunction and/or other orders
                with the
                purpose of preventing and/or stopping the breach against
                me.

            

    

     

    
      	
              12.

            	
              Without
                derogating from the foregoing I undertake to compensate and indemnify
                the
                Company or any affiliated companies for any damage that they sustain
                including but not limited to losses and/or damage to reputation as
                a
                result of a breach of any of my obligations pursuant to this letter
                of
                undertaking, and this in addition to the companies rights as stated
                above,
                to take any legal action against me pursuant to the
                law.  Additionally, I hereby undertake that in the case that I
                breach any of the provisions in this letter of undertaking, I will
                reimburse the Company any amount I received from the
                Company.

            

    

     

    

    _________________________

    Signature

     

    Witness
      to the Signature: _____________________  Date:
      1.5.2007

     

    Name:
      ___________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.9.1

     

    Intellectual
      Property

     

    Provisional
      Patent Application filed on June 24, 2007, which covers, in general, an
      invention in the field of curved spinal fixation implants.

     

    Undertaking
      of the Company towards the OCS dated May 15, 2007 regarding approved plan No.
      37701.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    PTO/SB/16
      (06-07)

    Approved
      for use through 0613012007. OMB 0851-0032

    U.S.
      Patent and Trademark Office; U.S. DEPARTMENT OF COMMERCE

    Under
      the
      Paperwork Reduction Ad of 1995, no persons are required to respond to a
      collection of information unless it displays a valid OMB control
      number.

     

    PROVISIONAL
      APPLICATION FOR PATENT COVER SHEET - Page 1 of 2

    This
      is a
      request for filing a PROVISIONAL APPLICATION FOR PATENT under 37 CFR
      1.53(c).

     

    
      	
              Express
                Mall Label No.

            	 	 
	 	 	 
	
              INVENTOR(S)

            
	
              Given
                Name (first and middle (if any))

            	
              Family
                Name or Surname

            	
              Residence

              (City
                and either State or Renton Country)

            
	
              ASAF

            	
              BEN-ARYE

            	
              ZICHRON
                YAAKOV, ISRAEL

            
	
              YUVAL

            	
              SHEZIFI

            	
              HAIFA,
                ISRAEL

            
	 	 	 
	 	 	 
	 	 	 
	
              Additional
                inventors are being named on the

            	 	
              Separately
                numbered sheets attached hereto

            
	 	 	 
	
              TITLE
                OF THE INVENTION (500 characters max):

            
	
              BONE
                ANCHORING SYSTEM

            
	
              Direct
                all correspondence to:

            	 	
              CORRESPONDENCE
                ADDRESS

            
	 	 	
              The
                address corresponding to Customer Number:

            	 	 
	
              OR

            	 	 
	 	 	 
	 
	 	 	
              Firm
                or

              Individual
                Name                                        ASAF
                BEN-ARYE

            
	 	 
	
              Address                              30
                YEFFE NOF STREET

            
	
              City         ZICHRON
                YAAKOV

            	
              State         --

            	
              Zip         30900

            
	
              Country                              ISRAEL

            	
              Telephone  972-54
                477 0909

            	
              Email  asaf@cellkinetics.com

            
	
              ENCLOSED
                APPLICATION PARTS (check all that
                apply)

            
	 
	 	 	
              Application
                Data Sheet. See 37 CFR 1.76

            	 	
              CD(s)
                Number of CDs

            	 	 
	 
	 	 	
              Drawing(s)
                Number of Sheets

            	
              11

            	 	 	
              Other
                (specify)

            	 	 
	 
	 	 	
              Specification
                (e.g. description of the Invention) Number of Pages

            	
                 
                22

            	 
	 
	
              Fees
                Due: Filing Fee of $200 ($100 for small entity). If the
                specification and drawings exceed 100 sheets of paper, an application
                size
                fee is also due, which is $250 ($125 for small entity) for each additional
                50 sheets or  fraction thereof. See 35 U.S.C. 41(a)(1)(G) and 37
                CFR 1.16(s).

            
	
              METHOD
                OF PAYMENT OF THE FILING FEE AND APPLICATION SIZE FEE FOR THIS PROVISIONAL
                APPLICATION FOR PATENT

            
	 
	 	
               

            	
              Applicant
                claims small entity status. See 37 CFR 1.27.

            	
              100.
                --

            	 
	 	 
	 	 	
              A
                check or money order Is enclosed to cover the filing fee and application
                size fee (if applicable).

            	 
	 	 
	 	 	
              Payment
                by credit card. Form PTO-2038 Is attached

            	
              TOTAL
                FEE AMOUNT ($)

            
	 
	 	 	
              The
                Director is hereby authorized to charge the filing fee and application
                size fee (If applicable) or credit any overpayment to
                Deposit

            
	 
	
              Account
                Number:

            	 	
              A
                duplicative copy of this form Is enclosed for fee
                processing.

            
	 
	
              USE
                ONLY FOR FILING A PROVISIONAL APPLICATION FOR PATENT

              This
                collection of information is required by 37 CFR 1.51. The information
                to
                required to obtain or retain a benefit by the public which is to
                file (and
                by the USPTO to process) an application.  Confidentiality is
                governed by 35 U.S.C., 122 and 37 CFR 1.11 and 1.14. This collection
                is
                estimated to take 8 hours to complete. Including gathering, preparing,
                and
                submitting the completed application form to the USPTO.  Time
                will vary depending upon the individual case. Any comments on the
                amount
                of time you require to complete this form and/or suggestions for
                reducing
                this burden, should be sent to the Chief Information Officer, U.S.
                Patent
                and Trademark Office, U.S. Department of Commerce, P.O. Box 1450,
                Alexandria, VA 22313-1450. DO NOT SEND FEES OR COMPLETED FORMS TO
                THIS
                ADDRESS. SEND TO: Commissioner for Patents, P.O. Box 1450,
                Alexandria, VA 22313-1450.

              If
                you need assistance in completing the form, call 1-800-PTO-9199 and
                select
                option 2

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    PROVISIONAL
      APPLICATION COVER SHEET

    Page
      2 of 2

     

    PTO/SB/16
      (06-07)

    Approved
      for use though 06/30/2007. OMB 0851-0032

    U.S.
      Patent and Trademark Office; U.S. DEPARTMENT OF COMMERCE

    Under
      the
      Paperwork Reduction Act of 1995, no persons are required to respond to a
      collection of information unless it displays a valid OMB control
      number.

     

    
      	 
	
              The
                invention was made by an agency of the United States Government or
                under a
                contract with an agency of the United States
                Government.

            
	 	
              X

            	
              No

            	 
	 
	 	 	
              Yes,
                the name of the U.S. Government agency and the Government contract
                number
                are:

            	 	 
	 	 	 
	 	 	 	 

    

     

    WARNING:

     

    Petitioner/applicant
      is cautioned to avoid submitting personal information in documents filed in
      a
      patent application that may contribute to identity theft. Personal information
      such as social security numbers, bank account numbers, or credit card numbers
      (other than a check or credit card authorization form PTO-2038 submitted for
      payment purposes) is never required by the USPTO to support a petition or an
      application. If this type of personal information is included in documents
      submitted to the USPTO, petitioners/applicants should consider redacting such
      personal information from the documents before submitting them to the USPTO.
      Petitioner/applicant is advised that the record of a patent application is
      available to the public after publication of the application (unless a
      non-publication request in compliance with 37 CFR 1.213(a) is made in the
      application) or issuance of a patent Furthermore, the record from an abandoned
      application may also be available to the public if the application is referenced
      in a published application or an issued patent (see 37 CFR 1.14). Checks and
      credit card authorization forms PTO-2038 submitted for payment purposes are
      not
      retained in the application file and therefore are not publicly
      available.

     

    
      	
              SIGNATURE  /s/
                Asaf Ben-Arye

            	
              Date  June
                24, 2007

            
	
              TYPED
                or PRINTED NAME  ASAF BEN-ARYE

            	
              REGISTRATION
                NO.  --

              (if
                appropriate)

            
	
              TELEPHONE  +
                972-54-477 0709

            	
              Docket
                Number:  --

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.9.3

    No
      Infringement

     

    It
      is
      clarified that the Company has not conducted a thorough patent search and does
      not have an opinion letter regarding such search.

     

    For
      the
      avoidance of any doubt, no representation is made with respect to the following
      patents:

     

    
      	
              1.

            	
              Patent
                number 5928267 by Bonutti.

            

    

     

    
      	
              2.

            	
              Patents
                number 6607530 by Carl et al.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      4.9.4

    Assignment
      of Entrepreneurs IP

     

    The
      Entrepreneurs are engaged with Expandis Ltd. (“Expandis”) and
      shall continue to be engaged with Expandis as its shareholders.

     

    Expandis
      signed a letter, dated April 29, 2004, under which it waived all and any rights
      to any form of intellectual property related to the field of curved spinal
      fixation implants and/or necessary for the Company to carry out its
      business.

     

    An
      assignment letter assigning all Founder IP to the Company is attached
      hereto.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Expandis 

      
        

      

      

    

    To:  Scorpion
      Surgical Technologies Ltd. (hereafter Scorpion)

     

    Further
      to Scorpion’s request and with reference to the fact that Dr. Nissim Ohana, Mr.
      Ilan Grunberg, Dr. Asaf Ben-Arye and Dr. Yuval Shezifi were involved as share
      holders and/or employees of Expandis Ltd.

     

    Expandis
      Ltd. hereby warrants and represents that it does not and shall not have any
      proprietary rights, including, without limitation, any trade secret, patent,
      copyright, mask work, in and/or to any and all patents, patent applications,
      know-how, knowledge, technology, discoveries, information, .biological and/or
      chemical materials, methods, experience and data, descriptions of manufacturing
      processes, schematics, formulae, algorithms, designs of drawings, and other
      forms of intellectual property related to the field of curved spinal fixation
      implants and/or necessary to enable the Company to carry on its business as
      now
      conducted and as shall be proposed to be conducted from time to time. Expandis
      hereby waives, and forever discharges the Company, its shareholders, officers,
      directors and affiliated corporations, whether previously or hereinafter
      affiliated in any manner, from any and all claims, rights, obligations, damages
      and/or liabilities of any nature whatsoever, whether. or not now known,
      suspected or claimed, which Expandis may claim to have in connection with any
      proprietary rights related to the field of curved spinal fixation implants
      and/or as necessary to enable the Scorpion to carry on its business as now
      conducted and as shall be proposed to be conducted from time to
      time.

     

    On
      behalf
      of Expandis

     

    

    /s/
      Zohar
      Gnedler

    Director

    Date:  29.4.07

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT
      OF IP RIGHTS

     

    This
      Assignment of IP Rights is made as of July 26, 2007, by Yuval
      Shezifi LD Number 55908743, having his address at 6 Bnei Brith St.,
      Haifa (the “Assignor”).

     

    TO
      THE BENEFIT OF

     

    Scorpion
      Ltd., a company organized and existing under the laws of the State of
      Israel, having its registered office at D.N Misgav, 20179, Israel (the
“Company”),

     

    Now
      therefore, the parties hereto have agreed as follows:

     

    
      	
              1.

            	
              Assignment.
                The Assignor hereby confirms and covenants that any and all developments,
                discoveries, techniques, inventions and improvements, methods, know-how,
                processes, formulae, data, data bases, computer programs, computer
                code,
                source code, software, hardware, patents, patent applications and
                all
                patentable materials, models, designs (whether registered ‘ or not),
                copyrights and all copyrightable materials, trade secrets, trademarks,
                trade names, proprietary information, concepts and ideas pertaining
                to the
                field of “curved spinal fixation implants” (the “Field”),
                and all documentation related therewith, that he has made, developed,
                discovered, invented, conceived or created, either solely or jointly
                with
                others, prior to the date of this Assignment (all of the above, the
                “IP”)anything related to the Field, were made for and
                on
                behalf of the Company and are the sole property of the Company; and,
                to
                the extent required, the Assignor hereby assigns and transfers to
                the
                Company, its successors, assigns or nominees, all of his rights,
                title and
                interest in and to the IP related to the Filed, including without
                limitation in and to all intellectual property rights associated
                therewith
                (such as patents, copyrights, etc.) and including his rights in a
                US
                patent application filed on June 24, 2007 entitled Bone Anchoring
                System
                and all other present and future rights in relation to the Products
                and/or
                arising from the Field (all of the above, including the IP related
                to the
                Field, hereinafter: “IP Rights”), it being clarified that
                such assignment includes all rights to sue for and receive remedies
                against past, present and future infringements of any and all of
                the
                foregoing rights.

            

    

     

    
      	
              2.

            	
              The
                Assignor covenants and agrees to reasonably assist the Company and
                its
                assigns at the Company’s sole cost, to secure the Company’s rights in the
                IP Rights in any and all jurisdictions and, to the extent required,
                to
                effect the assignment and transfer to the Company of the IP Rights,
                including without limitation the disclosure to the Company of all
                pertinent information and data with respect thereto, the execution
                of all
                applications, specifications, oaths, assurances, assignments and
                all other
                instruments which the Company shall reasonably deem necessary or
                expedient
                in order to apply for and obtain any copyrights, patents and all
                other
                intellectual property rights relating thereto and to effect the
                assignment.

            

    

     

    
      	
              3.

            	
              Delivery
                of Documents. The Assignor confirms that he has delivered to
                the Company any and all devices, records, data, notes, reports, proposals,
                lists, correspondence, specifications, drawings; blueprints, sketches,
                materials, equipment, other documents or property, or reproductions
                of any
                aforementioned items that were in his possession in relation to the
                1P
                Rights,

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              No
                Claims. The Assignor hereby confirms and undertakes that he
                does not have at present and will not have in the future, any claims
                and/or demands against the Company with respect to the IP related
                to the
                Field and/or the IP Rights.

            

    

     

    
      	
              5.

            	
              General
                Provisions.

            

    

     

    
      	
               

            	
              5.1

            	
              Governing
                Law. This Assignment shall be exclusively governed by the laws of
                the
                State of Israel (without regard to the principles of conflict of
                laws
                thereof).

            

    

     

    
      	
               

            	
              5.2

            	
              Successors
                and Assigns. This Assignment will be binding upon the Assignor’s
                heirs, executors, administrators and other legal representatives
                and will
                be for the benefit of the Company, its successors, and its
                assigns.

            

    

     

    IN
      WITNESS WHEREOF, the Assignor has executed this Assignment of IP Right as of
      the
      date first above written.

     

    /s/
      Yuval
      Shezifi                                                           

    Yuval
      Shezifi

    26/July/2007

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ASSIGNMENT
      OF IP RIGHTS

     

    This
      Assignment of IP Rights is made as of July 26, 2007, by Asaf
      Ben-Arye ID Number 57666844, having his address at 30 Yefe Nof St.,
      Zichron Yaakov (the “Assignor”).

     

    TO
      THE BENEFIT OF

     

    Scorpion
      Ltd., a company organized and existing under the laws of the State of
      Israel, having its registered office at D.N Misgav, 20179, Israel (the
“Company”),

     

    Now
      therefore, the parties hereto have agreed as follows:

     

    
      	
              1.

            	
              Assignment.
                The Assignor hereby confirms and covenants that any and all developments,
                discoveries, techniques, inventions and improvements, methods, know.-how,
                processes, formulae, data, data bases, computer programs, computer
                code,
                source code, software, “hardware, patents; patent, applications and all
                patentable materials, models, designs (whether registered or not),
                copyrights and all copyrightable materials, trade secrets, trademarks,
                trade names, proprietary information, concepts and ideas pertaining
                to the
                field of “curved spinal fixation implants” (the “Field”),
                and all documentation related therewith, that he has made, developed,
                discovered, invented, conceived or created, either solely or jointly
                with
                others, prior to the date of this Assignment (all of the above, the
                “IP”) anything related to the Field, were made for
                and on
                behalf of the Company and are the sole property of the Company; and,
                to
                the extent required, the Assignor hereby’ assigns and transfers to the
                Company, its successors, assigns or nominees, all of his rights,
                title and
                interest in and to the IP related to the Field, including without
                limitation in and to all intellectual property rights associated
                therewith
                (such as patents, copyrights, etc.) and including his rights in a
                US
                patent application filed on June 24, 2007 entitled Bone Anchoring
                System
                and all other present and future rights in relation to the Field
                and/or
                arising from, the Field (all of the above, including the IP related
                to the
                Field, hereinafter: “IP Rights”), it being clarified that
                such assignment includes all rights to sue for and receive remedies
                against past, present and future infringements of any and all of
                the
                foregoing rights..

            

    

     

    
      	
              2.

            	
              The
                    Assignor covenants and agrees to reasonably assist the Company
                and its
                assigns at the Company’s sole cost, to secure the Company’s rights in the
                IP Rights in any and all jurisdictions and, to the extent required,
                to
                effect the assignment and transfer to the Company of the IP Rights,
                including without limitation the-disclosure to the Company of all
                pertinent information and data with respect thereto, the execution
                of all
                applications, specifications, oaths, assurances, assignments and
                all other
                instruments which the Company shall reasonably deem necessary or
                expedient
                in order to apply for and obtain any copyrights, patents and all
                other
                intellectual property rights relating thereto and to effect the
                assignment.

            

    

     

    
      	
              3.

            	
              Delivery
                of Documents. The Assignor confirms that he has delivered to
                the Company any and all devices, records, data, notes, reports, proposals,
                lists, correspondence, specifications, drawings, blueprints, sketches,
                materials, equipment, other documents or property, or reproductions
                of any
                aforementioned items that were in his possession in relation to the
                IP
                Rights.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              No
                Claims. The Assignor hereby confirms and undertakes that he
                does not have at present and will not have in the future, any claims
                and/or demands against the Company with respect to the IP related
                to the
                Field and/or the IP Rights.

            

    

     

    
      	
              5.

            	
              General
                Provision.

            

    

     

    
      	
               

            	
              5.1

            	
              Governing
                Law. This Assignment shall be exclusively governed by the laws of
                the
                State of Israel (without regard to the principles of conflict of
                laws
                thereof).

            

    

     

    
      	
               

            	
              5.2

            	
              Successors
                and Assigns. This Assignment will be binding upon the Assignor’s
                heirs, executors, administrators and other legal representatives
                and will
                be for the benefit of the Company, its successors, and its
                assigns.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Assignor has executed this Assignment of IP Right as of
      the
      date first above written.

     

    /s/
      Asaf Ben
      Arye                                                           

    Asaf
      Ben
      Arye

    20/7/07

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    To:

    Scorpion
      Ltd.

    D.N.
      Misgav, 20179

    Israel

     

    Declaration

     

    Each
      of
      the undersigned, hereby confirms and declares that as of the date hereof, he
      did
      not develop, does not own and does not have any right in any intellectual
      property which is currently used and/or necessary for the operation of the
      business of Scorpion Ltd. (the “Company”) as presently
      conducted and which ‘elates directly or indirectly to the field of “curved
      spinal fixation implants” (the “Field”) (the
“Intellectual Property”) and hereby waives any right or claim
      which he has or may have in the future in connection with the Company’s
      Intellectual Property.

     

     

    
      	
              /s/
                Nissim Ohana 

            	
              Dated:  July
                26, 2007

            
	
               Nissim
                Ohana

            	 
	 	 
	
              /s/
                Ilan Grunberg

            	 
	
              Ilan
                Grunberg

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