Document:

Unassociated Document

    Exhibit 10.26

    

    PIMI
AGRO CLEANTECH INC.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    _________________________________________________

    

    2009
SHARE INCENTIVE PLAN

    _________________________________________________

    

    

    

    

    

    

     

    

     

    

     

    

     

    

    

    

    

     

    

     

    __________________________________

     

    Adopted:
Arpil 27, 2009

    

    __________________________________

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      PIMI
AGRO CLEANTECH INC.

      2009
SHARE INCENTIVE PLAN

    

    

    

    

    Unless
otherwise defined, terms used herein shall have the meaning ascribed to them in
Section 2 hereof.

    

     

    
      	
              1.

            	
              PURPOSE;
      TYPES OF AWARDS;
CONSTRUCTION.

            

    

     

     

    
      	
               
      

            	
              1.1.

            	
              Purpose.  The
      purposes of this 2009 Share Incentive Plan (as amended, the “Plan”) is to replace the 2008 Pimi Agro
      Cleantech Ltd. ("Pimi Israel") 2008 Share Option Plan pursuant to which
      directors, executives and selected employees and consultants of Pimi
      Israel were granted 561,161 options under the Pimi Israel
      2008 Share Option Plan ("Pimi Israel
      Option Plan") and
      also to afford an incentive to employees, directors, officers,
      consultants, advisors, suppliers and any other person or entity whose
      services are considered valuable (collectively, the “Service Providers”) to
      Pimi Agro Cleantech, Inc.  (the “Company”), or any
      Affiliate of the Company, which now exists or hereafter is organized or
      acquired by the Company, to continue as Service Providers, to increase
      their efforts on behalf of the Company or Affiliate and to promote the
      success of the Company's business, by providing such Service Providers
      with opportunities to acquire a proprietary interest in the Company by the
      issuance of Ordinary Shares of the Company, and the grant of options to
      purchase Shares, restricted Shares awards (“Restricted Shares”) and
      other Share-based Awards pursuant to the
Plan.

            

    

     

     

    
      	
               
      

            	
              1.2.

            	
              Types of
      Awards. The Plan is intended to enable the Company to issue Awards
      under varying tax regimes, including, without
  limitation:

            

    

     

     

    
      	
               
      

            	
              (i)

            	
              pursuant
      and subject to the provisions of Section 102 of the Ordinance, including
      without limitation the Income Tax Rules (Tax Benefits in Stock Issuance to
      Employees) 5763-2003 (the “Rules”) or such other
      rules published by the Israeli Income Tax Authorities (the “ITA”) (such Awards,
      “102 Awards”). 102
      Awards may either be granted to a Trustee or without a
      trustee;

            

    

     

     

    
      	
               
      

            	
              (ii)

            	
              pursuant
      to Section 3(9) of the Ordinance (such Awards, “3(9)
      Awards”);

            

    

     

     

    
      	
               
      

            	
              (iii)

            	
              Incentive
      Stock Options within the meaning of Section 422 of the Code, or the
      corresponding provision of any subsequently enacted United States federal
      tax statute, as amended from time to time, to be granted to Service
      Providers who are deemed to be residents of the U.S. for purposes of
      taxation;

            

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (iv)

            	
              Nonqualified
      Stock Options to be granted to Service Providers who are deemed to be
      residents of the U.S. for purposes of taxation;
  and

            

    

     

     

    
      	
               
      

            	
              (v)

            	
              Other
      stock-based Awards pursuant to Section 12
  hereof.

            

    

     

     

    In
addition to the issuance of Awards under the relevant tax regimes in the United
States of America and the State of Israel, the Plan contemplates issuances to
Grantees in other jurisdictions with respect to which the Committee is empowered
to make the requisite adjustments in the Plan and set forth the relevant
conditions in the Company’s agreement with the Grantee in order to comply with
the requirements of the tax regimes in any such jurisdictions.

     

     

    The Plan
contemplates the issuance of Awards by the Company, both as a private company
and as a publicly traded company.

     

     

    
      	
               
      

            	
              1.3.

            	
              Construction.
      To the extent any provision herein conflicts with the conditions of any
      relevant tax law or regulation which are relied upon for tax relief in
      respect of a particular Award to a Grantee, the provisions of such law or
      regulation shall prevail over those of the Plan and the Committee is
      empowered hereunder to interpret and enforce the said prevailing
      provisions.

            

    

     

     

    
      	
              2.

            	
              DEFINITIONS.

            

    

     

     

    
      	
               
      

            	
              2.1.

            	
              Terms
      Generally.  The definitions of terms herein shall apply
      equally to the singular and plural forms of the terms
      defined.  Whenever the context may require, any pronoun shall
      include the corresponding masculine, feminine and neuter
      forms.  The words “include”, “includes” and “including” shall be
      deemed to be followed by the phrase “without
      limitation”.  Unless the context requires otherwise (i) any
      definition of or reference to any agreement, instrument or other document
      herein shall be construed as referring to such agreement, instrument or
      other document as from time to time amended, restated, supplemented or
      otherwise modified (subject to any restrictions on such amendments,
      restatements, supplements or modifications set forth therein or herein),
      (ii) references to any law, constitution, statute, treaty,
      regulation, rule or ordinance, including any section or other part thereof
      shall refer to that it as amended from time to time and shall include any
      successor law, (iii) reference to a person shall means an individual,
      partnership, corporation, limited liability company, association, trust,
      unincorporated organization, or a government or agency or political
      subdivision thereof, (iv) the words “herein”, “hereof” and “hereunder”,
      and words of similar import, shall be construed to refer to this Plan in
      its entirety and not to any particular provision hereof and (v) all
      references herein to Sections shall be construed to refer to Sections to
      this Plan.

            

    

     

     

    
      
        
        

      

      
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              2.2.

            	
              Defined Terms.
      The following terms shall have the meanings ascribed to them in this
      Section 2.

            

    

     

     

    
      	
               
      

            	
              2.2.1.

            	
              “Affiliate” shall mean an
      affiliate of, or person affiliated with, a specified person or company or
      other trade or business that directly, or indirectly through one or more
      intermediaries, controls, is controlled by or is under common control with
      such person within the meaning of Rule 405 of Regulation C under the
      Securities Act, including, without limitation, any Subsidiary. For the
      purpose of Options granted pursuant to Section 102 shall mean also an
      “employing company” within the meaning of Section 102(a) of the
      Ordinance.

            

    

     

     

    
      	
               
      

            	
              2.2.2.

            	
              “Applicable Law” shall
      mean any applicable law, rule, regulation, statute, pronouncement, policy,
      interpretation, judgment, order or decree of any federal, provincial,
      state or local governmental, regulatory or adjudicative authority or
      agency, of any jurisdiction, and the rules and regulations of any stock
      exchange or trading system on which the Shares are then traded or
      listed.

            

    

     

     

    
      	
               
      

            	
              2.2.3.

            	
              “Award” shall mean any
      Restricted Share, Option or any other Share-based award, granted to a
      Grantee under the Plan and any share issued pursuant to the exercise
      thereof.

            

    

     

     

    
      	
               
      

            	
              2.2.4.

            	
              “Board” shall mean the
      Board of Directors of the Company.

            

    

     

     

    
      	
               
      

            	
              2.2.5.

            	
              “Code” shall mean the
      United States Internal Revenue Code of 1986, as
  amended.

            

    

     

     

    
      	
               
      

            	
              2.2.6.

            	
              “Committee” shall mean a
      committee established by the Board to administer the Plan, subject to
      Section 3.1.

            

    

     

     

    
      	
               
      

            	
              2.2.7.

            	
              “Companies Law” shall
      mean the Israel Companies Law-1999 and the regulations promulgated there
      under, all as amended from time to
time.

            

    

     

     

    
      	
               
      

            	
              2.2.8.

            	
              “Controlling Shareholder”
      shall have the meaning set forth in Section 32(9) of the
      Ordinance.

            

    

     

     

    
      	
               
      

            	
              2.2.9.

            	
              “Disability” shall mean
      (i) the inability of a Grantee to engage in any substantial gainful
      activity by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or which has lasted or
      can be expected to last for a continuous period of not less than 12
      months, as determined by a medical doctor satisfactory to the Committee
      or, if applicable, (ii) as “permanent and total disability” as defined in
      Section 22(e)(3) of the Code, as amended from time to
  time.

            

    

     

     

    
      	
               
      

            	
              2.2.10.

            	
              “Employee” shall mean a
      person who is employed by the Company or any of its Affiliates, including,
      for the purpose of Section 102, an individual who is serving as an “office
      holder” as defined under the Companies Law, but excluding any Controlling
      Shareholder.

            

    

     

     

    
      	
               
      

            	
              2.2.11.

            	
              “Exercise Period” shall
      mean the period, commencing on the date of grant of an Option, during
      which an Option shall be exercisable, subject to any vesting provisions
      thereof and the termination provisions
hereof.

            

    

     

     

    
      	
               
      

            	
              2.2.12.

            	
              “Exercise Price” shall
      mean the exercise price for each Share covered by an
    Option.

            

    

     

     

    
      	
               
      

            	
              2.2.13.

            	
              “Fair Market Value” per
      share as of a particular date shall mean (i) the closing sales price per
      Share on the securities exchange on which the Shares are principally
      traded for the last preceding date on which there was a sale of such
      Shares on such exchange; or (ii) if the Shares are listed on Nasdaq, the
      last reported price per Share on Nasdaq on the last preceding date on
      which there was a sale of such Share on Nasdaq; or (iii) if the Shares are
      then traded in an over-the-counter market, the average of the closing bid
      and asked prices for the Shares in such over-the-counter market for the
      last preceding date on which there was a sale of such Shares in such
      market; (iv) if the Shares are not then listed on a securities exchange or
      market or traded in an over-the-counter market, such value as the
      Committee, in its sole discretion, shall determine which determination
      shall be conclusive and binding on all parties, and shall be made after
      such consultations with outside legal, accounting and other experts as the
      Committee may deem advisable. The Committee may maintain a written record
      of its method of determining such value. If the Shares are listed or
      quoted on more than one established stock exchange or national market
      system, the Committee shall determine the appropriate exchange or system
      for the purpose of determination of Fair Market
  Value.

            

    

     

     

    
      	
               
      

            	
              2.2.14.

            	
              “Grantee” shall mean a
      person who receives a grant of Award under the Plan, and who at the time
      of grant is a Service Provider of the Company or any Affiliate
      thereof.

            

    

     

     

    
      	
               
      

            	
              2.2.15.

            	
              “Non-Employee” shall mean a
      consultant, adviser, service provider, Controlling Shareholder or any
      other person who is not an
Employee.

            

    

     

     

    
      	
               
      

            	
              2.2.16.

            	
              “Nonqualified Stock
      Option” shall mean any Option granted to Service Provider who is
      deemed to be residents of the U.S. for purposes of taxation, which Option
      is not designated as, or does not meet the conditions for, an Incentive
      Stock Option.

            

    

     

     

    
      	
               
      

            	
              2.2.17.

            	
              “Options” shall mean all
      options to purchase Shares granted as 102 Awards, 3(9) Awards, Incentive
      Stock Options and Non-Qualified Stock Options, as well as options to
      purchase Shares issued under other tax
regimes.

            

    

     

     

    
      	
               
      

            	
              2.2.18.

            	
              “Ordinance” shall mean
      the Israeli Income Tax Ordinance (New Version) 1961, and the regulations
      promulgated thereunder, all as amended from time to
  time.

            

    

     

     

    
      	
               
      

            	
              2.2.19.

            	
              “Parent” shall mean any
      company (other than the Company), which now exists or is hereafter
      organized, (i) in an unbroken chain of companies ending with the Company
      if, at the time of granting an Award, each of the companies (other than
      the Company) owns stock possessing fifty percent (50%) or more of the
      total combined voting power of all classes of stock in one of the other
      companies in such chain, or, if applicable, (ii) as defined in Section
      424(e) of the Code.

            

    

     

    
      
        
        

      

      
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              2.2.20.

            	
              “Retirement” shall mean a
      Grantee's retirement pursuant to applicable law or in accordance with the
      terms of any tax-qualified retirement plan maintained by the Company or
      any of its affiliates in which the Grantee
  participates.

            

    

     

     

    
      	
               
      

            	
              2.2.21.

            	
              “Securities Act” shall
      mean Securities Act of 1933, as
amended.

            

    

     

     

    
      	
               
      

            	
              2.2.22.

            	
              “Shares” shall mean
      Shares of Common Stock, par value  $ 0.01 each of the
      Company.

            

    

     

     

    
      	
               
      

            	
              2.2.23.

            	
              “Subsidiary” shall mean
      any company (other than the Company), which now exists or is hereafter
      organized or acquired by the Company, (i) in an unbroken chain of
      companies beginning with the Company if, at the time of granting an Award,
      each of the companies other than the last company in the unbroken chain
      owns stock possessing fifty percent (50%) or more of the total combined
      voting power of all classes of stock in one of the other companies in such
      chain, or, if applicable, (ii) as defined in Section 424(f) of the
      Code.

            

    

     

     

    
      	
               
      

            	
              2.2.24.

            	
              “Ten Percent Shareholder”
      shall mean a Grantee who, at the time an Incentive Stock Option is
      granted, owns shares possessing more than ten percent (10%) of the total
      combined voting power of all classes of shares of the Company or any
      Parent or Subsidiary.

            

    

     

     

    
      	
               
      

            	
              2.2.25.

            	
              “Trustee” shall mean
      S.G.S Trusts LTD from 4 Berkovich Street Tel-Aviv, or any
      other  trustee appointed instead by the Committee or the Board,
      as the case may be, to hold the respective Options and/or Shares (and, in
      relation with 102 Awards, approved by the Israeli tax authorities), if so
      appointed.

            

    

     

     

    
      
        
        

      

      
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              2.3.

            	
              Other Defined
      Terms. The following terms shall have the meanings ascribed to them
      in the Sections set forth below:

            

    

     

    
      	
              Term

            	
              Section

            
	
              102
      Awards

            	
              1.2(i)

            
	
              102
      Capital Gains Track Options

            	
              9.1

            
	
              102
      Non-Trustee Options

            	
              9.2

            
	
              102
      Ordinary Income Track Options

            	
              9.1

            
	
              102
      Trustee Options

            	
              9.1

            
	
              3(9)
      Awards

            	
              1.2(ii)

            
	
              Cause

            	
              6.6.3

            
	
              Company

            	
              1.1

            
	
              Effective
      Date

            	
              25.1

            
	
              Election

            	
              9.2

            
	
              Eligible
      102 Grantees

            	
              4.2

            
	
              ISO
      Shares

            	
              8.3

            
	
              ITA

            	
              1.2(i)

            
	
              Market
      Stand-Off

            	
              17

            
	
              Merger/Sale

            	
              14.2

            
	
              Option
      Agreement

            	
              6

            
	
              Plan

            	
              1.1

            
	
              Required
      Holding Period

            	
              0

            
	
              Restricted
      Period

            	
              11.4

            
	
              Restricted
      Share Agreement

            	
              11

            
	
              Restricted
      Share Unit Agreement

            	
              12

            
	
              Restricted
      Shares

            	
              1.1

            
	
              RSU

            	
              12

            
	
              Rules

            	
              1.2(i)

            
	
              Service
      Provider(s)

            	
              1.1

            
	
              Successor
      Corporation

            	
              14.2.1

            
	
              Withholding
      Obligations

            	
              18.3

            

    

     

     

    
      
        
        

      

      
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              3.

            	
              ADMINISTRATION.

            

    

     

     

    
      	
               
      

            	
              3.1.

            	
              To
      the extent permitted under Applicable Law and the Memorandum of
      Association, Articles of Association and any other governing document of
      the Company, the Plan shall be administered by the
      Committee.  In the event that the Board does not create a
      committee to administer the Plan, the Plan shall be administered by the
      Board in its entirety. In the event that an action necessary for the
      administration of the Plan is required under law to be taken by the Board,
      then such action shall be so taken by the Board. In any such event, all
      references herein to the Committee shall be construed as references to the
      Board.

            

    

     

     

    
      	
               
      

            	
              3.2.

            	
              The
      Committee shall consist of two or more directors of the Company, as
      determined by the Board. The Board shall appoint the members of the
      Committee, may from time to time remove members from, or add members to,
      the Committee, and shall fill vacancies in the Committee however caused,
      provided that the composition of the Committee shall at all times be in
      compliance with any mandatory requirements of Applicable Law. The
      Committee may select one of its members as its Chairman and shall hold its
      meetings at such times and places as it shall determine.  The
      Committee may appoint a Secretary, who shall keep records of its meetings
      and shall make such rules and regulations for the conduct of its business,
      as it shall deem advisable and subject to requirements of Applicable
      Law.

            

    

     

     

    
      	
               
      

            	
              3.3.

            	
              Subject
      to the terms and conditions of this Plan and any mandatory provisions of
      Applicable Law, and in addition to the Committee's powers contained
      elsewhere in this Plan, the Committee shall have full authority in its
      discretion, from time to time and at any time, to determine any of the
      following, or to recommend to the Board any of the following if it is not
      authorized to take such action according to Applicable
  Law:

            

    

     

     

    
      	
               
      

            	
              (i)

            	
              eligible
      Grantees,

            

    

     

     

    
      	
               
      

            	
              (ii)

            	
              grants
      of Awards and setting the terms and provisions of option agreements (which
      need not be identical) and any other agreements or instruments under which
      Awards are made, including, but not limited to, the number of Shares
      underlying each Award,

            

    

     

     

    
      	
               
      

            	
              (iii)

            	
              the
      time or times at which Awards shall be
granted,

            

    

     

     

    
      
        
        

      

      
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              (iv)

            	
              the
      schedule and conditions on which Awards may be
  exercised,

            

    

     

     

    
      	
               
      

            	
              (v)

            	
              the
      Exercise Price,

            

    

     

     

    
      	
               
      

            	
              (vi)

            	
              to
      interpret the Plan,

            

    

     

     

    
      	
               
      

            	
              (vii)

            	
              prescribe,
      amend and rescind rules and regulations relating to and for carrying out
      the Plan, as it may deem
appropriate,

            

    

     

     

    
      	
               
      

            	
              (viii)

            	
              the
      Fair Market Value of the Shares,

            

    

     

     

    
      	
               
      

            	
              (ix)

            	
              the
      tax track (capital gains, ordinary income track or any other track
      available under the Section 102 of the Ordinance) for the purpose of 102
      Awards, and

            

    

     

     

    
      	
               
      

            	
              (x)

            	
              any
      other matter which is necessary or desirable for, or incidental to, the
      administration of the Plan and any Award
  thereunder.

            

    

     

     

    
      	
               
      

            	
              3.4.

            	
              Grants
      of Awards shall be made pursuant to written notice to Grantees setting
      forth the terms of the Award. Such notice shall designate the type of
      Award as one of the following: (i) a 102 Award granted to a Trustee
      (either as a 102 Award (capital gain track) with Trustee or a 102 Award
      (ordinary income track) with Trustee), (ii) a 102 Award without a 102
      Trustee, (iii) a 3(9) Award, (iv) Incentive Stock
      Option, (v) Nonqualified Stock Option, or (vi) any other type of
      Award.

            

    

     

     

    
      	
               
      

            	
              3.5.

            	
              Subject
      to the mandatory provisions of Applicable Law, the grant of any Award,
      whether by the Committee or the Board, shall be deemed to include an
      authorization of the issuance of Shares upon the due exercise
      thereof.

            

    

     

     

    
      	
               
      

            	
              3.6.

            	
              The
      authority granted hereunder includes the authority to modify Awards to
      eligible individuals who are foreign nationals or are individuals who are
      employed outside Israel to recognize differences in local law, tax policy
      or custom, in order to effectuate the purposes of the Plan but without
      amending the Plan.  The Committee shall have the authority to
      grant, in its discretion, to the holder of an outstanding Award, in
      exchange for the surrender and cancellation of such Award, a new Award
      having an exercise price lower than provided in the Award so surrendered
      and canceled and containing such other terms and conditions as the
      Committee may prescribe in accordance with the provisions of the Plan or
      to set a new exercise price for the same Award lower than that previously
      provided in the Award.

            

    

     

     

    
      	
               
      

            	
              3.7.

            	
              All
      decisions, determination and interpretations of the Committee shall be
      final and binding on all Grantees of any Awards under this Plan, unless
      otherwise determined by the Board. No member of the Committee shall be
      liable for any action taken or determination made in good faith with
      respect to the Plan or any Award granted
  hereunder.

            

    

     

    
      
        
        

      

      
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              4.

            	
              ELIGIBILITY.

            

    

     

     

    
      	
               
      

            	
              4.1.

            	
              Awards
      may be granted to Service Providers of the Company and any Affiliate
      thereof, taking into account the qualification under each tax regime
      pursuant to which such Awards are granted. A person who has been granted
      an Award hereunder may be granted additional Awards, if the Committee
      shall so determine, subject to the limitations herein. In determining the
      persons to whom Awards shall be granted and the number of Shares to be
      covered by each Award, the Committee shall take into account the duties of
      the respective persons, their present and potential contributions to the
      success of the Company and such other factors as the Committee shall deem
      relevant in connection with accomplishing the purpose of the
      Plan.

            

    

     

     

    
      	
               
      

            	
              4.2.

            	
              Subject
      to Applicable Law, 102 Awards may not be granted to Controlling
      Shareholders and may only be granted to Employees, including officers and
      directors, of the Company or any Affiliate thereof, who are Israeli
      residents (“Eligible 102
      Grantees”). Awards to Eligible 102 Grantees in Israel shall be 102
      Awards.  Eligible 102 Grantees may receive only 102 Awards,
      which may either be grants to a Trustee or grants under Section 102
      without a trustee. Unless otherwise permitted by the Ordinance and the
      Rules, no 102 Awards to a Trustee may be granted until the expiration of
      thirty (30) days after the requisite filings under the Ordinance and the
      Rules have been appropriately made with the
ITA.

            

    

     

     

    
      	
               
      

            	
              4.3.

            	
              Subject
      to Applicable Law, Non-Employees who are Israeli residents and are not
      Eligible 102 Grantees may only be granted 3(9) Awards under this
      Plan.

            

    

     

     

    
      	
              5.

            	
              SHARES.

            

    

     

     

    The
initial number of Shares reserved for the grant of Awards under the Plan shall
be Three Million (3,000,000) Shares of Common Stock. Any share underlying an
Award granted hereunder which has expired, or was cancelled or terminated or
forfeited for any reason without having been exercised, shall be automatically,
and without any further action on the part of the Company or any Grantee,
returned to the “pool” of reserved Shares hereunder and shall again be available
for grant for the purposes of this Plan (unless this Plan shall have been
terminated) or unless the Board determines otherwise. The Board may, subject to
any other approvals required under any Applicable Law, increase or decrease the
number of Shares to be reserved under the Plan. Such Shares may, in whole or in
part, be authorized but unissued Shares, or Shares that shall have been or may
be reacquired by the Company (to the extent permitted pursuant to the Companies
Law) or by a trustee appointed by the Board under the relevant provisions of the
Ordinance, the Companies Law or any equivalent provision. Any Shares which are
not subject to outstanding options at the termination of the Plan shall cease to
be reserved for the purpose of the Plan, but until termination of the Plan, the
Company shall at all times reserve a sufficient number of Shares to meet the
requirements of the Plan.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              TERMS
      AND CONDITIONS OF OPTIONS.

            

    

     

     

    Each
Option granted pursuant to the Plan shall be evidenced by a written agreement
between the Company and the Grantee or a written notice delivered by the Company
and accepted by the Grantee (the “Option Agreement”), in such
form and containing such terms and conditions as the Committee shall from time
to time approve, which Option Agreement shall comply with and be subject to the
following terms and conditions, unless otherwise specifically provided in such
Option Agreement or the terms referred to in Sections 9 and 10 below. For
purposes of interpreting this Section 6, a
director's service as a member of the Board or the services of an officer, as
the case may be, shall be deemed to be employment with the Company or its
Subsidiary or Affiliate.

     

     

    
      	
               
      

            	
              6.1.

            	
              Number of
      Shares. Each Option Agreement shall state the number of Shares
      covered by the Option.

            

    

     

     

    
      	
               
      

            	
              6.2.

            	
              Type of Option.
      Each Option Agreement shall specifically state the type of Option granted
      thereunder and whether it constitutes an Incentive Stock Option,
      Nonqualified Stock Option, 102 Option Award and the relevant track, 3(9)
      Option Award, or otherwise.

            

    

     

     

    
      	
               
      

            	
              6.3.

            	
              Exercise Price.
      Each Option Agreement shall state the Exercise Price, which, in the case
      of an Incentive Stock Option, shall not be less than one hundred percent
      (100%) of the Fair Market Value of the Shares covered by the Option on the
      date of grant or such other amount as may be required pursuant to the
      Code. In the case of any other Option, the per share Exercise Price shall
      be equal to the amount determined by the Committee. In the case of an
      Incentive Stock Option granted to any Ten-Percent Shareholder, the
      Exercise Price shall be no less than 110% of the Fair Market Value of the
      Shares covered by the Option on the date of grant. In no event shall the
      Exercise Price of an Option be less than the par value of the shares for
      which such Option is exercisable. Subject to Section 3 and to the foregoing, the Committee may reduce
      the Exercise Price of any outstanding Option. The Exercise Price shall
      also be subject to adjustment as provided in Section 14 hereof. Notwithstanding the above, the
      Exercise Price of the Options granted to Grantees who were granted options
      under Pimi Israel Option Plan as replacement of their Options in Pimi
      Israel will be the same Exercise Price under the Pimi Israel
      Plan.

            

    

     

     

    
      	
               
      

            	
              6.4.

            	
              Manner of
      Exercise. An Option may be exercised, as to any or all Shares as to
      which the Option has become exercisable, by written notice delivered in
      person or by mail to the Secretary of the Company or to such other person
      as determined by the Committee, specifying the number of Shares with
      respect to which the Option is being exercised, accompanied by payment of
      the Exercise Price for such Shares in the manner specified in the
      following sentence. The Exercise Price shall be paid in full with respect
      to each Share, at the time of exercise, either in (i) cash, (ii) if the
      Company’s shares are publicly traded, all or part of the Exercise Price
      and any withholding taxes may be paid by the delivery (on a form
      prescribed by the Company) of an irrevocable direction to a securities
      broker approved by the Company to sell Shares and to deliver all or part
      of the sales proceeds to the Company or the Trustee, (iii) if the
      Company’s shares are publicly traded, all or part of the Exercise Price
      and any withholding taxes may be paid by the delivery (on a form
      prescribed by the Company) of an irrevocable direction to pledge Shares to
      a securities broker or lender approved by the Company, as security for a
      loan, and to deliver all or part of the loan proceeds to the Company or
      the Trustee, or (iv) in such other manner as the Committee shall
      determine, which may include procedures for cashless
    exercise.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              6.5.

            	
              Term and Vesting of
      Options. Each Option Agreement shall provide the vesting schedule
      for the Option as determined by the Committee. To the extent permitted
      under Applicable Law, the Committee shall have the authority to determine
      the vesting schedule and accelerate the vesting of any outstanding Option
      at such time and under such circumstances as it, in its sole discretion,
      deems appropriate. Unless otherwise resolved by the Committee and stated
      in the Option Agreement, and subject to Sections 6.6 and 6.7 hereof,
      Options shall vest and become exercisable under the following schedule:
      twenty five percent (25%) of the Shares covered by the Option, on the
      first anniversary of the date on which such Option is granted, provided
      that the Grantee remains continuously employed by or in the service of the
      Company or its Subsidiary or Affiliate for that  year, and one
      forty- eighth (1/48th) of the Shares covered by the Option at the end of
      each subsequent month, provided that the Grantee remains continuously
      employed by or in the service of the Company or its Subsidiary or
      Affiliate for that month. The Option Agreement may contain performance
      goals and measurements, and the provisions with respect to any Option need
      not be the same as the provisions with respect to any other
      Option.  The Exercise Period of an Option will be seven (7)
      years from the date of grant of the Option unless otherwise determined by
      the Committee, but subject to the vesting provisions described above and
      the early termination provisions set forth in Sections 6.6 and 6.7 hereof;
      provided, however, that in the case of an Incentive Stock Option granted
      to a Ten Percent Shareholder, such Exercise Period shall not exceed five
      (5) years from the date of grant of such Option. At the expiration of the
      Exercise Period, all unexercised Options shall become null and
      void.

            

    

     

     

    
      	
               
      

            	
              6.6.

            	
              Termination.

            

    

     

     

    
      	
               
      

            	
              6.6.1.

            	
              Except
      as provided in this Section 6.6 and in Section
      6.7 hereof, an Option may not be exercised
      unless the Grantee is then in the employ of or maintaining a director,
      officer, consultant, advisor or supplier relationship with the Company or
      a Subsidiary or Affiliate thereof or, in the case of an Incentive Stock
      Option, a company or a parent or subsidiary company of such company
      issuing or assuming the Option in a transaction to which Section 424(a) of
      the Code applies, and unless the Grantee has remained continuously so
      employed or in the director, officer, supplier, consultant, or advisor
      relationship since the date of grant of the Option. In the event that the
      employment or director, officer or consultant, advisor or supplier
      relationship of a Grantee shall terminate (other than by reason of death,
      Disability or Retirement), all Options of such Grantee that are vested and
      exercisable at the time of such termination may, unless earlier terminated
      in accordance with their terms, be exercised within up to ninety (90) days
      after the date of such termination (or such different period as the
      Committee shall prescribe); provided, however, that if the Company (or the
      Subsidiary or Affiliate, when applicable) shall terminate the Grantee’s
      employment or service for Cause (as defined below) or if following the
      Grantee’s termination of employment, circumstances arise or are discovered
      with respect to the Grantee that would have constituted Cause for
      termination of his or her employment or service, all Options theretofore
      granted to such Grantee (whether vested or not) shall, to the extent not
      theretofore exercised, terminate on the date of such termination (or on
      which such circumstance arise or are discovered, as the case may be)
      unless otherwise determined by the
Committee.

            

    

     

     

    
      	
               
      

            	
              6.6.2.

            	
              In
      the case of a Grantee whose principal employer is a Subsidiary or
      Affiliate, the Grantee’s employment shall also be deemed terminated for
      purposes of this Section 6.6 as of the date on
      which such principal employer ceases to be a Subsidiary or Affiliate.
      Notwithstanding anything to the contrary, the Committee, in its absolute
      discretion may, on such terms and conditions as it may determine
      appropriate, extend the periods for which the Options held by any
      individual may continue to vest and be exercisable; provided, that such
      Options may lose their status as Incentive Stock Options under applicable
      law and be deemed Nonqualified Stock Options in the event that the period
      of vesting and/or exercisability of any option is extended beyond the
      later of: (i) one hundred and eighty (180) days after the date of
      cessation of employment or performance of services; or (ii) the applicable
      period under Section 6.7 below.
    

            

    

     

     

    
      	
               
      

            	
              6.6.3.

            	
              For
      purposes of this Plan, the term “Cause” shall mean any of
      the following: (a) fraud, embezzlement or felony or similar act by the
      Grantee; (b) an act of moral turpitude by the Grantee, or any similar act,
      to the extent that such act causes significant injury to the reputation,
      business or business relationship of the Company (or a Subsidiary or
      Affiliate, when applicable); (c) any material breach by the Grantee of an
      agreement between the Company or any Subsidiary or Affiliate and the
      Grantee (including material breach of confidentiality, non-competition or
      non-solicitation covenants); or (d) any circumstances that constitute
      grounds for termination for cause under the Grantee’s employment,
      consulting or service agreement with the Company or Subsidiary or
      Affiliate, to the extent
applicable.

            

    

     

     

    
      	
               
      

            	
              6.7.

            	
              Death, Disability or
      Retirement of Grantee. If a Grantee shall die while employed by, or
      performing service for, the Company or a Subsidiary, or within the three
      (3) month period after the date of termination of such Grantee's
      employment or service (or within such different period as the Committee
      may have provided pursuant to Section 6.6 hereof), or if the Grantee's
      employment or service shall terminate by reason of Disability, (i) with
      respect to any Grantee who is a member of the Board of Directors, 25% of
      the Shares covered by the then unvested Options theretofore granted to
      such Grantee shall automatically become vested, and (ii) with respect to
      any Grantee, all Options theretofore granted to such Grantee may (to the
      extent otherwise vested and exercisable (including Options automatically
      vested pursuant to (i) above and unless earlier terminated in accordance
      with their terms), be exercised by the Grantee or by the Grantee's estate
      or by a person who acquired the right to exercise such Options by bequest
      or inheritance or otherwise by result of death or Disability of the
      Grantee, at any time within one (1) year after the death or Disability of
      the Grantee (or such different period as the Committee shall prescribe).
      In the event that an Option granted hereunder shall be exercised by the
      legal representatives of a deceased or former Grantee, written notice of
      such exercise shall be accompanied by a certified copy of letters
      testamentary or equivalent proof of the right of such legal representative
      to exercise such Option. In the event that the employment or service of a
      Grantee shall terminate on account of such Grantee's Retirement, all
      Options of such Grantee that are exercisable at the time of such
      Retirement may, unless earlier terminated in accordance with their terms,
      be exercised at any time within the three (3) month period after the date
      of such Retirement (or such different period as the Committee shall
      prescribe).

            

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              6.8.

            	
              Suspension of
      Vesting. Unless the Board of Directors or the Committee provides
      otherwise, vesting of Options granted hereunder shall be suspended during
      any unpaid leave of absence, other than in the case of any (a) leave of
      absence which was pre-approved by the Company, or (b) transfers between
      locations of the Company or between the Company, any Affiliate, or any
      respective successor thereof.

            

    

     

     

    
      	
               
      

            	
              6.9.

            	
              Voting
      Proxy.  Until immediately after the listing for trading
      on a stock exchange or market or trading system of the Company’s (or the
      Successor Corporation’s) shares, the right to vote any Shares acquired
      under this Plan pursuant to an Award shall, unless otherwise determined by
      the Committee, be given by the Grantee, pursuant to an irrevocable proxy,
      to the person or persons designated by the Board. All Awards granted
      hereunder shall be conditioned upon the execution of such irrevocable
      proxy. So long as any such Shares are held by a Trustee, such Shares shall
      be voted by the Trustee, and unless the Trustee is directed otherwise by
      the Board, such Shares shall be voted in the same proportion as the result
      of the shareholder vote at the shareholders meeting or written consent in
      respect of which the Shares held by the Trustee are being voted. Any
      irrevocable proxy granted pursuant hereto shall be of no force or effect
      immediately after the immediately after the listing for trading on a stock
      exchange or market or trading system of the Company’s (or the Successor
      Corporation’s) shares. 

            

    

     

     

    
      	
               
      

            	
              6.10.

            	
              Other
      Provisions. The Option Agreement evidencing Awards under the Plan
      shall contain such other terms and conditions not inconsistent with the
      Plan as the Committee may determine, at or after the date of grant,
      including without limitation, provisions in connection with the
      restrictions on transferring the Awards, which shall be binding upon the
      Grantees and other terms and conditions as the Committee shall deem
      appropriate.

            

    

     

     

    
      	
              7.

            	
              NONQUALIFIED
      STOCK OPTIONS.

            

    

     

     

    Options
granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject to the general terms
and conditions specified in Section 6 hereof and
other provisions of the Plan, except for any provisions of the Plan applying to
Options under different tax laws or regulations.

     

     

    
      	
              8.

            	
              INCENTIVE
      STOCK OPTIONS.

            

    

     

     

    Options
granted pursuant to this Section 8 are intended to
constitute Incentive Stock Options and shall be granted subject to the following
special terms and conditions, the general terms and conditions specified in
Section 6 hereof and other provisions of the Plan,
except for any provisions of the Plan applying to Options under different tax
laws or regulations:

     

     

    
      	
               
      

            	
              8.1.

            	
              Value of
      Shares. The aggregate Fair Market Value (determined as of the date
      the Incentive Stock Option is granted) of the Shares with respect to which
      all Incentive Stock Options granted under this Plan and all other option
      plans of any Subsidiary or Affiliate become exercisable for the first time
      by each Grantee during any calendar year shall not exceed one hundred
      thousand United States dollars ($100,000) with respect to such Grantee. To
      the extent that the aggregate Fair Market Value of Shares with respect to
      which the Incentive Stock Options are exercisable for the first time by
      any Grantee during any calendar years exceeds one hundred thousand United
      States dollars ($100,000), such Options shall be treated as Nonqualified
      Stock Options.  The foregoing shall be applied by taking options
      into account in the order in which they were granted, with the Fair Market
      Value of any Share to be determined at the time of the grant of the
      Option.  In the event the foregoing results in the portion of an
      Incentive Stock Option exceeding the one hundred thousand United States
      dollars ($100,000) limitation, only such excess shall be treated as a
      Nonqualified Stock Option.

            

    

     

     

    
      	
               
      

            	
              8.2.

            	
              Ten Percent
      Shareholder. In the case of an Incentive Stock Option granted to a
      Ten Percent Shareholder, (i) the Exercise Price shall not be less than one
      hundred and ten percent (110%) of the Fair Market Value of the Shares on
      the date of grant of such Incentive Stock Option, and (ii) the Exercise
      Period shall not exceed five (5) years from the date of grant of such
      Incentive Stock Option.

            

    

     

     

    
      	
               
      

            	
              8.3.

            	
              Incentive Stock Option
      Lock-Up Period. No disposition of
      Shares received pursuant to the exercise of Incentive Stock Options
      (“ISO Shares”),
      shall be made by the Grantee within 2 years from the date of grant, nor
      within 1 year after the transfer of such ISO Shares to him. To the extent
      that the Grantee violates the aforementioned limitations, the Incentive
      Stock Options shall be deemed to be Nonqualified Stock
      Options.

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              8.4.

            	
              Approval. The status of any
      ISO Shares shall be subject to approval of the Plan by the Company’s
      shareholders, such approval to be provided 12 months before or after the
      date of adoption of the Plan by the Board of
  Directors.

            

    

     

     

    
      	
               
      

            	
              8.5.

            	
              Exercise Following
      Termination. Notwithstanding
      anything else in this Plan to the contrary, Incentive Stock Options that
      are not exercised within ninety (90) days following termination of
      Grantee’s employment in the Company or its Affiliates and Subsidiaries, or
      within one year in case of termination of Grantee’s employment in the
      Company or its Affiliates and Subsidiaries due to a disability (within the
      meaning of section 22(e)(3) of the Code), shall be deemed to be
      Nonqualified Stock Options.

            

    

     

     

    
      	
               
      

            	
              8.6.

            	
              Adjustments to
      Incentive Stock Options. Any Option
      Agreement providing for the grant of Incentive Stock Options shall
      indicate that adjustments made pursuant to the Plan with respect to
      Incentive Stock Options could constitute a “modification” of such
      Incentive Stock Options (as that term is defined in Section 424(h) of the
      Code) or could cause adverse tax consequences for the holder of such
      Incentive Stock Options and that the holder should consult with his or her
      tax advisor regarding the consequences of
      such “modification” on his or her income tax treatment with respect to the
      Incentive Stock Option.

            

    

     

     

    
      	
               
      

            	
              8.7.

            	
              Notice to Company of
      Disqualifying Disposition. Each Grantee who
      receives an Incentive Stock Option must agree to notify the Company in
      writing immediately after the Grantee makes a Disqualifying Disposition of
      any ISO Shares. A “Disqualifying Disposition” is any disposition
      (including any sale) of such ISO Shares before the later of (i) two
      years after the date the Grantee was granted the Incentive Stock Option,
      or (ii) one year after the date the Grantee acquired Shares by
      exercising the Incentive Stock Option. If the Grantee dies before such ISO
      Shares are sold, these holding period requirements do not apply and no
      disposition of the ISO Shares will be deemed a Disqualifying
      Disposition.

            

    

     

     

    
      	
              9.

            	
              102
      OPTION AWARDS.

            

    

     

     

    
      	
               
      

            	
              9.1.

            	
              Options
      granted pursuant to this Section 9 are
      intended to be granted pursuant to Section 102 of the Ordinance pursuant
      to either (a) Section 102(b)(2) thereof as capital gains track options
      (“102 Capital Gains Track
      Options”), or (b) Section 102(b)(1) thereof as ordinary income
      track options (“102
      Ordinary Income Track Options”; together with 102 Capital Gains
      Track Options, “102
      Trustee Options”).  102 Trustee Options shall be granted
      subject to the following special terms and conditions contained in this
      Section 9, the general terms and conditions
      specified in Section 6 hereof and other
      provisions of the Plan, except for any provisions of the Plan applying to
      Options under different tax laws or
regulations.

            

    

     

     

    
      	
               
      

            	
              9.2.

            	
              The
      Company may grant only one type of 102 Trustee Option at any given time to
      all Grantees who are to be granted 102 Trustee Options pursuant to this
      Plan, and shall file an election with the ITA regarding the type of 102
      Trustee Option it elects to grant before the date of grant of any 102
      Trustee Options (the “Election”). Such
      Election shall also apply to any bonus shares received by any Grantee as a
      result of holding the 102 Trustee Options. The Company may change the type
      of 102 Trustee Option that it elects to grant only after the passage of at
      least 12 months from the end of the year in which the first grant was made
      in accordance with the previous Election, or as otherwise provided by
      Applicable Law. Any Election shall not prevent the Company from granting
      Options, pursuant to Section 102(c) of the Ordinance without a Trustee
      (“102 Non-Trustee
      Options”).

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              9.3.

            	
              Each
      102 Trustee Option will be deemed granted on the date stated in a written
      notice to be provided by the Company, provided that on or before such date
      (i) the Company has provided such notice to the Trustee and (ii) the
      Grantee has signed all documents required pursuant to Applicable Law and
      under the Plan.

            

    

     

    Each 102 Trustee Option, each Share
issued pursuant to the exercise of any 102 Trustee Option, and any rights
granted thereunder, including, without limitation, bonus shares, shall be
allotted and issued to and registered in the name of the Trustee and shall be
held in trust for the benefit of the Grantee for a period of not less than the
requisite period prescribed by the Ordinance and the Rules or such longer period
as set by the Committee (the “Required Holding
Period”)/ for a period of not less than two (2)
years (24 months) from the date of the grant of the Option. The Trustee may also
hold in trust any shares issued upon exercise of such
Options.

     

    
      	
               
      

            	
              9.4.

            	
              .
      In the event that the requirements under Section 102 to qualify an Option
      as a 102 Trustee Option are not met, then the Option may be treated as a
      102 Non-Trustee Option, all in accordance with the provisions of Section
      102 and the Rules.  After termination of the Required Holding
      Period, the Trustee may release such 102 Trustee Option and any such
      Shares, provided that (i) the Trustee has received an acknowledgment from
      the ITA that the Grantee has paid any applicable taxes due pursuant to the
      Ordinance or (ii) the Trustee and/or the Company and/or its Affiliate
      withholds any applicable taxes due pursuant to the Ordinance arising from
      the 102 Trustee Options and/or any Shares allotted or issued upon exercise
      of such 102 Trustee Options. The Trustee shall not release any 102 Trustee
      Options or Shares issued upon exercise thereof prior to the payment in
      full of the Grantee’s tax liabilities arising from such 102 Trustee
      Options and/or Shares or the withholding referred to in (ii)
      above.

            

    

     

     

    
      	
               
      

            	
              9.5.

            	
              Each
      102 Trustee Option shall be subject to the relevant terms of the Ordinance
      and the Rules, which shall be deemed an integral part of the 102 Trustee
      Option and shall prevail over any term contained in the Plan or Option
      Agreement which is not consistent therewith. Any provision of the
      Ordinance, the Rules and any approvals by the Income Tax Commissioner not
      expressly specified in this Plan or Option Agreement which, as determined
      by the Committee, are necessary to receive or maintain any tax benefit
      pursuant to Section 102 shall be binding on the Grantee. The Grantee
      granted a 102 Trustee Option shall comply with the Ordinance and the terms
      and conditions of the Trust Agreement entered into between the Company and
      the Trustee. The Grantee agrees to execute any and all documents, which
      the Company and/or its Affiliates and/or the Trustee may reasonably
      determine to be necessary in order to comply with the Ordinance and the
      Rules.

            

    

     

     

    
      	
               
      

            	
              9.6.

            	
              During
      the Required Holding Period, the Grantee shall not release from trust or
      sell, assign, transfer or give as collateral, the Shares issuable upon the
      exercise of a 102 Trustee Option and/or any securities issued or
      distributed with respect thereto, until the expiration of the Required
      Holding Period. Notwithstanding the above, if any such sale or release
      occurs during the Required Holding Period it will result in adverse tax
      consequences to the Grantee under Section 102 of the Ordinance and the
      Rules, which shall apply to and shall be borne solely by such Grantee.
      Subject to the foregoing, the Trustee may, pursuant to a written request
      from the Grantee, release and transfer such Shares to a designated third
      party, provided that both of the following conditions have been fulfilled
      prior to such release or transfer: (i) payment has been made to the ITA of
      all taxes required to be paid upon the release and transfer of the Shares,
      and confirmation of such payment has been received by the Trustee and (ii)
      the Trustee has received written confirmation from the Company that all
      requirements for such release and transfer have been fulfilled according
      to the terms of the Company’s corporate documents, the Plan, the Option
      Agreement and any Applicable Law.

            

    

     

     

    
      	
               
      

            	
              9.7.

            	
              If
      a 102 Trustee Option is exercised during the Required Holding Period, the
      Shares issued upon such exercise shall be issued in the name of the
      Trustee for the benefit of the Grantee. If such 102 Trustee Option is
      exercised after the expiration of the Required Holding Period, the Shares
      issued upon such exercise shall, at the election of the Grantee, either
      (i) be issued in the name of the Trustee, or (ii) be issued to the
      Grantee, provided that the Grantee first complies with all applicable
      provisions of the Plan and all taxes with respect thereto shall have been
      fully paid to the ITA.

            

    

     

     

    
      	
               
      

            	
              9.8.

            	
              The
      foregoing provisions of this Section 9
      relating to 102 Trustee Options shall not apply with respect to 102
      Non-Trustee Options, which shall, however, be subject to the relevant
      provisions of Section 102 and the
Rules.

            

    

     

     

    
      	
               
      

            	
              9.9.

            	
              Upon
      receipt of a 102 Trustee Option, the Grantee will sign an undertaking to
      release the Trustee from any liability with respect to any action or
      decision duly taken and executed in good faith by the Trustee in relation
      to the Plan, or any 102 Trustee Option or Share granted to such Grantee
      thereunder.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              3(9)
      OPTION AWARD.

            

    

     

     

    
      	
               
      

            	
              10.1.

            	
              Options
      granted pursuant to this Section 10 are
      intended to constitute a 3(9) Option Award and shall be granted subject to
      the general terms and conditions specified in Section 6 hereof and other provisions of the Plan,
      except for any provisions of the Plan applying to Options under different
      tax laws or regulations.

            

    

     

     

    
      	
               
      

            	
              10.2.

            	
              To
      the extent required by the Ordinance or the ITA or otherwise deemed by the
      Committee prudent or advisable, the 3(9) Option Awards granted pursuant to
      the Plan shall be issued to a Trustee nominated by the Committee in
      accordance with the provisions of the Ordinance.  In such event,
      the Trustee shall hold such Options in trust, until exercised by the
      Grantee, pursuant to the Company's instructions from time to time as set
      forth in a trust agreement, which will be entered into between the Company
      and the Trustee.  If determined by the Board of Directors or the
      Committee, and subject to such trust agreement the Trustee shall be
      responsible for withholding any taxes to which a Grantee may become liable
      upon the exercise of Options.

            

    

     

     

    
      	
              11.

            	
              RESTRICTED
      SHARES.

            

    

     

     

    The
Committee may award Restricted Shares to any eligible Grantee, including under
Section 102 of the Ordinance. Each Award of Restricted Shares under the Plan
shall be evidenced by a written agreement between the Company and the Grantee
(the “Restricted Share
Agreement”), in such form as the Committee shall from time to time
approve. The Restricted Share Agreement shall comply with and be subject to the
following terms and conditions, unless otherwise specifically provided in such
Agreement:

     

     

    
      	
               
      

            	
              11.1.

            	
              Number of
      Shares. Each Restricted Share Agreement shall state the number of
      Shares covered by an Award.

            

    

     

     

    
      	
               
      

            	
              11.2.

            	
              Purchase Price.
      Each Restricted Share Agreement may state an amount of purchase price to
      be paid by the Grantee in consideration for the issuance of the Restricted
      Shares and the terms of payment thereof, which may include, payment by
      issuance of promissory notes or other evidence of indebtedness on such
      terms and conditions as determined by the
  Committee.

            

    

     

     

    
      	
               
      

            	
              11.3.

            	
              Vesting. Each
      Restricted Share Agreement shall provide the vesting schedule for the
      Restricted Shares as determined by the Committee, provided that (to the
      extent permitted under Applicable Law) the Committee shall have the
      authority to determine the vesting schedule and accelerate the vesting of
      any outstanding Restricted Share at such time and under such circumstances
      as it, in its sole discretion, deems appropriate. Unless otherwise
      resolved by the Committee and stated in the Restricted Share Agreement,
      Restricted Shares shall vest in the same vesting schedule as set forth in
      Section 6.5
hereof.

            

    

     

     

    
      	
               
      

            	
              11.4.

            	
              Restrictions.
      Restricted Shares may not be sold, assigned, transferred, pledged,
      hypothecated or otherwise disposed of, except by will or the laws of
      descent and distribution, for such period as the Committee shall determine
      from the date on which the Award is granted (the “Restricted
      Period”).  The Committee may also impose such additional
      or alternative restrictions and conditions on the Restricted Shares, as it
      deems appropriate, including the satisfaction of performance criteria.
      Such performance criteria may include, but are not limited to, sales,
      earnings before interest and taxes, return on investment, earnings per
      share, any combination of the foregoing or rate of growth of any of the
      foregoing, as determined by the Committee. Certificates for shares issued
      pursuant to Restricted Share Awards shall bear an appropriate legend
      referring to such restrictions, and any attempt to dispose of any such
      shares in contravention of such restrictions shall be null and void and
      without effect.  Such certificates may, if so determined by the
      Committee, be held in escrow by an escrow agent appointed by the
      Committee, or, if a Restricted Share Award is made pursuant to Section
      102, by the Trustee. In determining the Restricted Period of an Award the
      Committee may provide that the foregoing restrictions shall lapse with
      respect to specified percentages of the awarded Restricted Shares on
      successive anniversaries of the date of such Award. To the extent required
      by the Ordinance or the ITA, the Restricted Shares issued pursuant to
      Section 102 of the Ordinance shall be issued to the Trustee in accordance
      with the provisions of the Ordinance and the Restricted Shares shall be
      held for the benefit of the Grantee for such period as may be required by
      the Ordinance.

            

    

     

     

    
      	
               
      

            	
              11.5.

            	
              Adjustment of
      Performance Goals. The Committee may adjust performance goals to
      take into account changes in law and accounting and tax rules and to make
      such adjustments as the Committee deems necessary or appropriate to
      reflect the inclusion or the exclusion of the impact of extraordinary or
      unusual items, events or circumstances.  The Committee also may
      adjust the performance goals by reducing the amount to be received by any
      Grantee pursuant to an Award if and to the extent that the Committee deems
      it appropriate.

            

    

     

     

    
      	
               
      

            	
              11.6.

            	
              Forfeiture.
      Subject to such exceptions as may be determined by the Committee, if the
      Grantee's continuous employment with the Company or any Subsidiary or
      Affiliate shall terminate for any reason prior to the expiration of the
      vesting date or Restricted Period of an Award or prior to the payment in
      full of the purchase price of any Restricted Shares with respect to which
      the vesting date or the Restricted Period has expired, any shares
      remaining subject to vesting or restrictions or with respect to which the
      purchase price has not been paid in full, shall thereupon be forfeited and
      shall be deemed transferred to, and reacquired by, or cancelled by, as the
      case may be, the Company or a Subsidiary at no cost to the Company or
      Subsidiary, subject to all Applicable Laws. Upon forfeiture of Restricted
      Shares, the Grantee shall have no further rights with respect to such
      Restricted Shares.

            

    

     

     

    
      	
               
      

            	
              11.7.

            	
              Ownership.
      During the Restricted Period the Grantee shall possess all incidents of
      ownership of such Restricted Shares, subject to Section 6.9 and Section 11.4, including the right to receive dividends
      with respect to such shares.  All distributions, if any,
      received by a Grantee with respect to Restricted Shares as a result of any
      stock split, stock dividend, combination of shares, or other similar
      transaction shall be subject to the restrictions applicable to the
      original Award.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.

            	
              RESTRICTED SHARE
      UNITS.

            

    

     

     

    
      	
               
      

            	
              12.1.

            	
              A
      Restricted Share Unit (an “RSU”) is an Award
      covering a number of Shares that is settled by issuance of those Shares.
      An RSU may be awarded to any eligible Grantee, including under Section 102
      of the Ordinance.  Each grant of RSUs under the Plan shall be
      evidenced by a written agreement between the Company and the Grantee (the
      “Restricted Share Unit
      Agreement”), in such form as the Committee shall from time to time
      approve. Such RSUs shall be subject to all applicable terms of the Plan
      and may be subject to any other terms that are not inconsistent with the
      Plan. The provisions of the various Restricted Share Unit Agreements
      entered into under the Plan need not be identical. RSUs may be granted in
      consideration of a reduction in the recipient’s other
      compensation.

            

    

     

     

    
      	
               
      

            	
              12.2.

            	
              Other
      than the par value of the Shares, no payment of cash shall be required as
      consideration for RSUs. RSUs may or may not be subject to vesting. Vesting
      shall occur, in full or in installments, upon satisfaction of the
      conditions specified in the Restricted Share Unit
    Agreement.

            

    

     

     

    
      	
               
      

            	
              12.3.

            	
              Without
      limitation of Section 6.9, no voting or
      dividend rights as a shareholder shall exist prior to the actual issuance
      of Shares in the name of the Grantee.  Notwithstanding anything
      else in this Plan (as may be amended from time to time) to the contrary,
      unless otherwise specified by the Committee, each RSU shall be for a term
      of seven (7) years. Each Restricted Share Unit Agreement shall specify its
      term and any conditions on the time or times for settlement, and provide
      for expiration prior to the end of its term in the event of termination of
      employment or service providing to the Company, and may provide for
      earlier settlement in the event of the Grantee’s death, Disability or
      other events.

            

    

     

     

    
      	
               
      

            	
              12.4.

            	
              Settlement
      of vested RSUs shall be made in the form of Shares. Distribution to a
      Grantee of an amount (or amounts) from settlement of vested RSUs can be
      deferred to a date after settlement as determined by the Committee. The
      amount of a deferred distribution may be increased by an interest factor
      or by dividend equivalents. Until the grant of RSUs is settled, the number
      of such RSUs shall be subject to adjustment pursuant
    hereto.

            

    

     

     

    
      	
              13.

            	
              OTHER
      SHARE OR SHARE-BASED AWARDS.

            

    

     

     

    The
Committee may grant other Awards under the Plan pursuant to which Shares (which
may, but need not, be Restricted Shares pursuant to Section 11 hereof), cash or a combination thereof, are or may
in the future be acquired or received, or Awards denominated in stock units,
including units valued on the basis of measures other than market value. The
Committee may also grant stock appreciation rights without the grant of an
accompanying option, which rights shall permit the Grantees to receive, at the
time of any exercise of such rights, cash equal to the amount by which the Fair
Market Value of all Shares in respect to which the right was granted exceeds the
exercise price thereof. The Committee may, and it is hereby deemed to be an
Award under the terms of the Plan, grant to Grantees (including employees) the
opportunity to purchase Shares of the Company in connection with any public
offerings of the Company’s securities. Such other Share based Awards may be
granted alone, in addition to, or in tandem with any Award of any type granted
under the plan and must be consistent with the purposes of the
Plan.

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
      	
              14.

            	
              EFFECT
      OF CERTAIN CHANGES.

            

    

     

     

    
      	
               
      

            	
              14.1.

            	
              General. In the
      event of a subdivision of the outstanding share capital of the Company,
      any payment of a stock dividend (distribution of bonus shares), a
      recapitalization, a reorganization (which may include a combination or
      exchange of shares), a consolidation, a stock split, a reverse stock
      split, a spin-off or other corporate divestiture or division, a
      reclassification or other similar occurrence, the Committee shall make
      such adjustments as determined by the Committee to be appropriate in order
      to adjust (i) the number of Shares available for grants of Awards, (ii)
      the number of Shares covered by outstanding Awards, and (iii) the exercise
      price per share covered by any Award; provided, however, that any
      fractional shares resulting from such adjustment shall be rounded down to
      the nearest whole share and that the Company shall have no obligation to
      make any cash or other payment with respect to such fractional
      shares.

            

    

     

     

    
      	
               
      

            	
              14.2.

            	
              Merger and Sale of
      Company.  In the event of (i) a sale of all or
      substantially all of the assets of the Company; or (ii) a sale (including
      an exchange) of all or substantially all of the shares of the Company;
      (iii) a merger, consolidation, amalgamation or like transaction of the
      Company with or into another corporation; (iv) a scheme of arrangement for
      the purpose of effecting such sale, merger or amalgamation; or (v) such
      other transaction that is determined by the Committee to be a transaction
      having a similar effect (all such transactions being herein referred to as
      a “Merger/Sale”),
      then, without the Grantee’s consent and
action:

            

    

     

     

    
      	
               
      

            	
              14.2.1.

            	
              The
      Committee in its sole and absolute discretion may cause that any Award
      then outstanding shall be assumed or an equivalent Award shall be
      substituted by such successor corporation of the Merger/Sale or any parent
      or Affiliate thereof as determined by the Board in its discretion (the
      “Successor
      Corporation”), under substantially the same terms as the Award;
      

            

    

     

     

    For the
purposes of this Section 14.2.1, the Award shall be
considered assumed if, following a Merger/Sale, the Award confers on the holder
thereof the right to purchase or receive, for each Share underlying an Award
immediately prior to the Merger/Sale, either (i) the consideration (whether
stock, cash, or other securities or property) distributed to or received by
holders of Shares in the Merger/Sale for each Share held on the effective date
of the Merger/Sale (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares), which may be subject to vesting  and other terms as
determined by the Committee in its discretion, or (ii) regardless of the
consideration received by the holders of Shares in the Merger/Sale, solely
shares (or their equivalent) of the Successor Corporation at a value to be
determined by the Committee in its discretion, which may be subject to
vesting  and other terms as determined by the Committee in its
discretion. The foregoing shall not limit the Committee authority to determine,
in its sole discretion, that in lieu of such assumption or substitution of
Awards for Awards of the Successor Corporation, such Award will be substituted
for any other type of asset or property, including under Section 14.2.2 hereunder.

     

     

    
      	
               
      

            	
              14.2.2.

            	
              In
      the event that the Awards are not assumed or substituted with an
      equivalent Award, then the Committee may (but shall not be obligated to),
      in lieu of such assumption or substitution of the Award and in its sole
      discretion, (i) provide for the Grantee to have the right to exercise the
      Award, or otherwise for the acceleration of vesting of such Award, as to
      all or part of the Shares, including Shares covered by the Award which
      would not otherwise be exercisable or vested, under such terms and
      conditions as the Committee shall determine, including the cancellation of
      all unexercised Awards upon closing of the Merger/Sale; and/or (ii)
      provide for the cancellation of each outstanding Award at the closing of
      such Merger/Sale, and payment to the Grantee of an amount in cash as
      determined by the Committee to be fair in the circumstances, subject to
      such terms and conditions as determined by the
  Committee.

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              14.2.3.

            	
              Notwithstanding
      the foregoing, in the event of a Merger/Sale, the Committee may determine,
      in its sole discretion, that upon completion of such Merger/Sale, the
      terms of any Award be otherwise amended, modified or terminated, as the
      Committee shall deem in good faith to be appropriate, and if an Option
      Award, that the Option Award shall confer the right to purchase or receive
      any other security or asset, or any combination thereof, or that its terms
      be otherwise amended, modified or terminated, as the Committee shall deem
      in good faith to be appropriate. Neither the authorities and powers of the
      Committee under this Section 14.2.2, nor the
      exercise or implementation thereof, shall (i) be restricted or limited in
      any way by any adverse consequences (tax or otherwise) that may result to
      any holder of an Award, and (ii) as, inter alia, being a
      feature of the Award upon its grant, be deemed to constitute a change or
      an amendment of the rights of such holder under this Plan, nor shall any
      such adverse consequences (as well as any adverse tax consequences that
      may result from any tax ruling or other approval or determination of any
      relevant tax authority) be deemed to constitute a change or an amendment
      of the rights of such holder under this
Plan.

            

    

     

     

    
      	
               
      

            	
              14.3.

            	
              Reservation of
      Rights. Except as expressly provided in this Section 14, the Grantee of an Award hereunder shall have
      no rights by reason of any subdivision or consolidation of shares of any
      class or the payment of any stock dividend (bonus shares), any other
      increase or decrease in the number of shares of any class or by reason of
      any dissolution, liquidation, Merger/Sale, or consolidation, divestiture
      or spin-off of assets or shares of another company. Any issue by the
      Company of shares of any class, or securities convertible into shares of
      stock of any class, shall not affect, and no adjustment by reason thereof
      shall be made with respect to, the number, type or price of shares subject
      to an Award.  The grant of an Award pursuant to the Plan shall
      not affect in any way the right of power of the Company to make
      adjustments, reclassifications, reorganizations or changes of its capital
      or business structures or to merge or to consolidate or to dissolve,
      liquidate or sell, or transfer all or part of its business or assets or
      engage in any similar transactions.

            

    

     

     

    
      	
              15.

            	
              NON-TRANSFERABILITY
      OF AWARDS; SURVIVING
BENEFICIARY.

            

    

     

     

    
      	
               
      

            	
              15.1.

            	
              All
      Awards granted under the Plan shall not be transferable otherwise than by
      will or by the laws of descent and distribution.  Awards may be
      exercised or otherwise realized, during the lifetime of the Grantee, only
      by the Grantee or by his guardian or legal representative, to the extent
      provided for herein. Any transfer of an Award not permitted hereunder
      (including transfers pursuant to any decree of divorce, dissolution or
      separate maintenance, any property settlement, any separation agreement or
      any other agreement with a spouse) and any grant of any interest in any
      Award to, or creation in any way of any interest in any Award by, any
      party other than the Grantee shall be null and void and shall not confer
      upon any party or person, other than the Grantee, any rights. A Grantee
      may file with the Committee a written designation of a beneficiary on such
      form as may be prescribed by the Committee and may, from time to time,
      amend or revoke such designation. If no designated beneficiary survives
      the Grantee, the executor or administrator of the Grantee's estate shall
      be deemed to be the Grantee's beneficiary. Notwithstanding the foregoing,
      upon the request of the Grantee and subject to Applicable Law the
      Committee, at its sole discretion, may permit to transfer the Award to a
      family trust.

            

    

     

     

    
      	
               
      

            	
              15.2.

            	
              As
      long as the Shares are held by the Trustee in favor of the Grantee, all
      rights possessed by the Grantee over the Shares are personal, and may not
      be transferred, assigned, pledged or mortgaged, other than by will or laws
      of descent and distribution.

            

    

     

     

    
      	
              16.

            	
              CONDITIONS
      UPON ISSUANCE OF SHARES

            

    

     

     

    
      	
               
      

            	
              16.1.

            	
              Legal
      Compliance.  Shares shall not be issued pursuant to the
      exercise of an Award, unless the exercise of such Award and the issuance
      and delivery of such Shares shall comply with Applicable Laws as
      determined by counsel to the Company. The inability of the Company to
      obtain authority from any regulatory body having jurisdiction, which
      authority is deemed by the Company’s counsel to be necessary to the lawful
      issuance and sale of any Shares hereunder, shall relieve the Company of
      any liability in respect of the failure to issue or sell such Shares as to
      which such requisite authority shall not have been
    obtained.

            

    

     

     

    
      	
               
      

            	
              16.2.

            	
              Investment
      Representations.  As a condition to the exercise of an
      Award, the Company may require the person exercising such Award to
      represent and warrant at the time of any such exercise that the Shares are
      being purchased only for investment and without any present intention to
      sell or distribute such Shares, and make other representations as may be
      required under applicable securities laws if, in the opinion of counsel
      for the Company, such representations are required, all in form and
      content specified by the Company.

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              17.

            	
              MARKET
      STAND-OFF

            

    

     

     

    
      	
               
      

            	
              17.1.

            	
              In
      connection with any underwritten public offering by the Company of its
      equity securities pursuant to an effective registration statement filed
      under the United States Securities Act of 1933, as amended or equivalent
      law in another jurisdiction, the Grantee shall not directly or indirectly,
      without the prior written consent of the Company or its underwriters,
      (i) lend, offer, pledge, sell, contract to sell, sell any option or
      contract to purchase, purchase any option or contract to sell, grant any
      option, right or warrant to purchase, or otherwise transfer or dispose of,
      directly or indirectly, any Shares acquired under this Plan or any
      securities of the Company (whether or not such Shares acquired under this
      Plan), or (ii) enter into any swap or other arrangement that
      transfers to another, in whole or in part, any of the economic
      consequences of ownership of the Shares acquired under this Plan, whether
      any such transaction described in clause (i) or (ii) above is to be
      settled by delivery of Shares acquired under this Plan or such other
      securities, in cash or otherwise. Such restriction (the “Market Stand-Off”) shall
      be in effect for such period of time following the effective date of the
      registration statement relating to such offering, as may be requested by
      the Company or such underwriters, however in any event, such period shall
      not exceed 180 days (in the case of the Company’s first underwritten
      offering of its Shares) following the effective date of such registration
      statement; or 90 days (in the case of a registration statement
      thereafter).

            

    

     

     

    
      	
               
      

            	
              17.2.

            	
              In
      the event of a subdivision of the outstanding share capital of the
      Company, the declaration and payment of a stock dividend (distribution of
      bonus shares), the declaration and payment of an extraordinary dividend
      payable in a form other than stock, a recapitalization, a reorganization
      (which may include a combination or exchange of shares or a similar
      transaction affecting the Company’s outstanding securities without receipt
      of consideration), a consolidation, a stock split, a spin-off or other
      corporate divestiture or division, a reclassification or other similar
      occurrence, an adjustment in conversion ratio, any new, substituted or
      additional securities which are by reason of such transaction distributed
      with respect to any Shares subject to the Market Stand-Off, or into which
      such Shares thereby become convertible, shall immediately be subject to
      the Market Stand-Off.

            

    

     

     

    
      	
               
      

            	
              17.3.

            	
              In
      order to enforce the Market Stand-Off, the Company may impose
      stop-transfer instructions with respect to the Shares acquired under this
      Plan until the end of the applicable stand-off
  period.

            

    

     

     

    
      	
               
      

            	
              17.4.

            	
              The
      underwriters in connection with a registration statement so filed are
      intended to be third party
      beneficiaries of this Section ‎17
      and shall have the right, power and authority to enforce the provisions
      hereof as though they were a party
hereto.

            

    

     

     

    
      	
              18.

            	
              AGREEMENT
      BY GRANTEE REGARDING TAXES.

            

    

     

     

    
      	
               
      

            	
              18.1.

            	
              If
      the Committee shall so require, as a condition of exercise of an Award,
      the release of Shares by the Trustee or the expiration of the Restricted
      Period, a Grantee shall agree that, no later than the date of such
      occurrence, he will pay to the Company or make arrangements satisfactory
      to the Committee and the Trustee (if applicable) regarding payment of any
      applicable taxes of any kind required by Applicable Law to be withheld or
      paid.

            

    

     

     

    
      	
               
      

            	
              18.2.

            	
              ALL
      TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT
      OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY
      SHARES GRANTED HEREUNDER OR ISSUED UPON EXERCISE OF ANY AWARD OR FROM ANY
      OTHER ACTION OF THE GRANTEE IN CONNECTION WITH THE FOREGOING SHALL BE
      BORNE AND PAID SOLELY BY THE GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE
      COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD
      THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PENALTY,
      INTEREST OR INDEXATION THEREON. EACH GRANTEE AGREES TO, AND UNDERTAKES TO
      COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR
      AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE
      FOREGOING WHICH IS APPROVED BY THE
COMPANY.

            

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

    THE
GRANTEE IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES OF RECEIVING OR EXERCISING AWARDS HEREUNDER. THE COMPANY DOES NOT
ASSUME ANY RESPONSIBILITY TO ADVISE THE GRANTEE ON SUCH MATTERS, WHICH SHALL
REMAIN SOLELY THE RESPONSIBILITY OF THE GRANTEE.

     

     

    
      	
               
      

            	
              18.3.

            	
              The
      Company or any Subsidiary or Affiliate may take such action as it may deem
      necessary or appropriate, in its discretion, for the purpose of or in
      connection with withholding of any taxes which the Company or any
      Subsidiary or Affiliate is required by any Applicable Law to withhold in
      connection with any Awards (collectively, “Withholding
      Obligations”). Such actions may include, without limitation, (i)
      requiring a Grantees to remit to the Company in cash an amount sufficient
      to satisfy such Withholding Obligations; (ii) subject to Applicable Law,
      allowing the Grantees to provide Shares to the Company, in an amount that
      at such time, reflects a value that the Committee determines to be
      sufficient to satisfy such Withholding Obligations; (iii) withholding
      Shares otherwise issuable upon the exercise of an Award at a value which
      is determined by the Committee to be sufficient to satisfy such
      Withholding Obligations; or (iv) any combination of the foregoing. The
      Company shall not be obligated to allow the exercise of any Award by or on
      behalf of a Grantee until all tax consequences arising from the exercise
      of such Award are resolved in a manner acceptable to the
      Company.

            

    

     

     

    
      	
               
      

            	
              18.4.

            	
              Each
      Grantee shall notify the Company in writing promptly and in any event
      within ten (10) days after the date on which such Grantee first obtains
      knowledge of any tax bureau inquiry, audit, assertion, determination,
      investigation, or question relating in any manner to the Awards granted or
      received hereunder or Shares issued thereunder and shall continuously
      inform the Company of any developments, proceedings, discussions and
      negotiations relating to such matter, and shall allow the Company and its
      representatives to participate in any proceedings and discussions
      concerning such matters.  Upon request, a Grantee shall provide
      to the Company any information or document relating to any matter
      described in the preceding sentence, which the Company, in its discretion,
      requires.

            

    

     

     

    
      	
               
      

            	
              18.5.

            	
              With
      respect to 102 Non-Trustee Options, if the Grantee ceases to be employed
      by the Company or any Affiliate, the Grantee shall extend to the Company
      and/or its Affiliate with whom the Grantee is employed a security or
      guarantee for the payment of taxes due at the time of sale of Shares, all
      in accordance with the provisions of Section 102 of the Ordinance and the
      Rules.

            

    

     

     

    
      	
              19.

            	
              RIGHTS
      AS A STOCKHOLDER; VOTING AND
DIVIDENDS.

            

    

     

     

    
      	
               
      

            	
              19.1.

            	
              Subject
      to Section 11.7, a Grantee shall have no
      rights as a shareholder of the Company with respect to any Shares covered
      by the Award until the date of the issuance of a share certificate to the
      Grantee for such Shares.  In the case of 102 Option Awards or
      3(9) Option Awards (if such Share Options are being held by a Trustee), a
      the Trustee shall have no rights as a shareholder of the Company with
      respect to any Shares covered by such Award until the date of the issuance
      of a share certificate to the Grantee for such Shares for the Grantee’s
      benefit, and the Grantee shall have no rights as a shareholder of the
      Company with respect to any Shares covered by the Award until the date of
      the release of such Shares from the Trustee to the Grantee and the
      issuance of a share certificate to the Grantee for such Shares. No
      adjustment shall be made for dividends (ordinary or extraordinary, whether
      in cash, securities or other property) or distribution of other rights for
      which the record date is prior to the date such share certificate is
      issued, except as provided in Section 14
      hereof.

            

    

     

     

    
      	
               
      

            	
              19.2.

            	
              With
      respect to all Shares issued in the form of Awards hereunder or upon the
      exercise of Awards hereunder, any and all voting rights attached to such
      Shares shall be subject to Section 6.9, and
      the Grantee shall be entitled to receive dividends distributed with
      respect to such Shares, subject to the provisions of the Company’s
      Articles of Association, as amended from time to time, and subject to any
      Applicable Law.

            

    

     

     

    
      	
               
      

            	
              19.3.

            	
              The
      Company may, but shall not be obligated to, register or qualify the sale
      of Shares under any applicable securities law or any other applicable
      law.

            

    

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
      	
              20.

            	
              NO
      REPRESENTATION BY COMPANY.

            

    

     

     

    By
granting the Awards, the Company is not, and shall not be deemed as, granting
any representation or warranties to the Grantee regarding the Company, its
business affairs, its prospects or the future value of its Shares.

     

     

    
      	
              21.

            	
              NO
      RETENTION RIGHTS.

            

    

     

     

    Nothing
in the Plan or in any Award granted or agreement entered into pursuant hereto
shall confer upon any Grantee the right to continue in the employ of, or be in a
consultant, advisor, director, officer or supplier relationship with, the
Company or any Subsidiary or Affiliate or to be entitled to any remuneration or
benefits not set forth in the Plan or such agreement or to interfere with or
limit in any way the right of the Company or any such Subsidiary or Affiliate to
terminate such Grantee's employment or service. Awards granted under the Plan
shall not be affected by any change in duties or position of a Grantee as long
as such Grantee continues to be employed by, or be in a consultant, advisor,
director, officer or supplier relationship with, the Company or any Subsidiary
or Affiliate.

     

     

    
      	
              22.

            	
              PERIOD
      DURING WHICH AWARDS MAY BE
GRANTED.

            

    

     

     

    Awards
may be granted pursuant to the Plan from time to time within a period of ten
(10) years from the Effective Date. From the tenth (10th)
anniversary of the Effective Date no grants of Awards may be made and the Plan
shall continue to be in full force and effect solely with respect to such Awards
that remain outstanding. The Plan shall terminate at such time at such time
after the tenth (10th)
anniversary of the Effective Date that no Awards remain
outstanding.

     

     

    
      	
              23.

            	
              TERM OF AWARD

            

    

     

     

    Anything
herein to the contrary notwithstanding, but without derogating from the
provisions of Sections 6.6, 6.7 or 8.2 hereof, if any Award, or any part
thereof, has not been exercised and the Shares covered thereby not paid for
within the term of the Award as determined by the Committee, which in any event
shall not exceed ten (10) years after the date on which the Award was granted,
as set forth in the Notice of Grant in the Grantee’s Award, such Award, or such
part thereof, and the right to acquire such Shares shall terminate, and all
interests and rights of the Grantee in and to the same shall expire. In the case
of Shares held by a Trustee, the Grantee shall elect whether to release such
Shares from trust or sell the Shares and upon such release or sale such trust
shall expire.

     

     

    
      	
              24.

            	
              AMENDMENT
      AND TERMINATION OF THE PLAN.

            

    

     

     

    The Board
at any time and from time to time may suspend, terminate, modify or amend the
Plan, whether retroactively or prospectively; provided, however, that, unless
otherwise determined by the Board, an amendment which requires shareholder
approval in order for the Plan to continue to comply with any Applicable Law
shall not be effective unless approved by the requisite vote of shareholders,
and provided further that except as provided herein, no suspension, termination,
modification or amendment of the Plan may adversely affect any Award previously
granted, unless the written consent of the respective Grantee is
obtained.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    
      	
              25.

            	
              APPROVAL.

            

    

     

     

    
      	
               
      

            	
              25.1.

            	
              The
      Plan shall take effect upon its adoption by the Board (the “Effective
      Date”).  

            

    

     

     

    
      	
               
      

            	
              25.2.

            	
              The
      102 Awards are subject to the approval, if required, of the ITA and
      receipt by the Company of all approvals
thereof.

            

    

     

     

    
      	
              26.

            	
              RULES
      PARTICULAR TO SPECIFIC
COUNTRIES

            

    

     

     

    Notwithstanding
anything herein to the contrary, the terms and conditions of the Plan may be
amended with respect to a particular country by means of an appendix to the
Plan, and to the extent that the terms and conditions set forth in any appendix
conflict with any provisions of the Plan, the provisions of the appendix shall
govern. Terms and conditions set forth in the Appendix shall apply only to Award
granted to a Grantee under the jurisdiction of the specific country that is the
subject of the appendix and shall not apply to Awards issued to a Grantee not
under the jurisdiction of such country. The adoption of any such appendix shall
be subject to the approval of the Board of Directors or Committee, and if
required in connection with the application of certain tax treatment, pursuant
to applicable stock exchange rules or regulations or otherwise, then also the
approval of the shareholders of the Company at the required
majority.

     

     

    
      	
               
      

            	
              27.

            	
              GOVERNING
      LAW; JURISDICTION.

            

    

     

     

    The Plan
and all determinations made and actions taken pursuant hereto shall be governed
by the laws of the United States and by the laws of the State of Delaware except
with respect to matters that are subject to tax laws, regulations and rules in
any specific jurisdiction, which shall be governed by the respective laws,
regulations and rules of such jurisdiction. Certain definitions, which refer to
laws other than the laws of such jurisdiction, shall be construed in accordance
with such other laws.

     

     

    
      	
               
      

            	
              28.

            	
              NON-EXCLUSIVITY
      OF THE PLAN.

            

    

     

     

    Neither
the adoption of the Plan by the Board nor the submission of the Plan to
shareholders of the Company for approval (to the extent required under
Applicable Law), shall be construed as creating any limitations on the power or
authority of the Board to adopt such other or additional incentive or other
compensation arrangements of whatever nature as the Board may deem necessary or
desirable or preclude or limit the continuation of any other plan, practice or
arrangement for the payment of compensation or fringe benefits to employees
generally, or to any class or group of employees, which the Company or any
Subsidiary now has lawfully put into effect, including, without limitation, any
retirement, pension, savings and stock purchase plan, insurance, death and
disability benefits and executive short-term or long-term incentive
plans.

     

     

    
      	
              29.

            	
              MISCELLANEOUS.

            

    

     

     

    
      	
               
      

            	
              29.1.

            	
              Additional
      Terms. Each Award awarded under the Plan may contain such other
      terms and conditions not inconsistent with the Plan as may be determined
      by the Committee, in its sole
discretion.

            

    

     

     

    
      	
               
      

            	
              29.2.

            	
              Severability.
      If any provision of the Plan or any Award Agreement shall be determined to
      be illegal or unenforceable by any court of law in any jurisdiction, the
      remaining provisions hereof and thereof shall be severable and enforceable
      in accordance with their terms, and all provisions shall remain
      enforceable in any other jurisdiction.  In addition, if any
      particular provision contained in this Agreement shall for any reason be
      held to be excessively broad as to duration, geographic scope, activity or
      subject, it shall be construed by limiting and reducing such provision as
      to such characteristic so that the provision is enforceable to fullest
      extent compatible with the applicable law as it shall then
      appear.

            

    

     

     

    
      	
               
      

            	
              29.3.

            	
              Captions and
      Titles. The use of captions and titles in this Plan or any Option
      Agreement, Restricted Share Agreement or other Award related agreement is
      for the convenience of reference only and shall not affect the meaning of
      any provision of the Plan or such
agreement.

            

    

     

     

     

     

     

     

     

    22

    
 

     

    *           *           *Unassociated Document

    
      
        NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

        

        Warrant
Certificate No. 1a

        

        PIMI
AGRO CLEANTECH, INC.

         

        AMENDED
AND RESTATED

        

        COMMON
STOCK PURCHASE WARRANT

        

        To
Purchase 145,985 Shares of Common Stock of

         

        This
Amended and Restated Warrant (the “Warrant”)  is
hereby issued on June 7, 2009 to amend, replace and supersede the original
warrant (Warrant Number 1) originally issued to Earthbound LLC on May 3,
2009.

         

        Pimi Agro
Cleantech, inc. certifies that, for value received, EARTHBOUND LLC (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial Exercise
Date”) and on or prior to the close of business on July 31, 2009 (the
“Termination
Date”) but not thereafter, to subscribe for and purchase from PIMI AGRO
CLEANTECH, INC., a Delaware corporation (the “Company”), up to
145,985 shares (the “Warrant Shares”) of
Common Stock, par value $.01 per share, of the Company (the “Common
Stock”).  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

         

        Section
1.                                Recitals.

         

        a)           On
January 20, 2009 the Company entered into an investment agreement with Holder,
pursuant to which Holder agreed to invest an aggregate of $300,000.00 in the
Company, payable in multiple traunches. As of the Initial Exercise Date, Holder
has invested $60,000 under the Investment Agreement.

         

        b)           The
Company is issuing this Warrant in furtherance of the Investment Agreement and
as further incentive to Holder to increase its investment in the
Company.

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

                        Section
2.             Exercise.

         

        a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise form annexed
hereto (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company); and, within three (3) Trading Days of
the date said Notice of Exercise is delivered to the Company, the Company shall
have received payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days of
the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise within two (2) Trading Days of receipt of such notice.  THE HOLDER AND ANY ASSIGNEE, BY
ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE THAT, BY REASON OF THE
PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE PURCHASE OF A PORTION OF THE WARRANT
SHARES HEREUNDER, THE NUMBER OF WARRANT SHARES AVAILABLE FOR PURCHASE HEREUNDER
AT ANY GIVEN TIME MAY BE LESS THAN THE AMOUNT STATED ON THE FACE
HEREOF.

         

        b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $1.37 (the “Exercise
Price”).

         

        c)           Mechanics of
Exercise.

         

        i.      Authorization of Warrant
Shares.  The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

         

        ii.    Delivery of Certificates
Upon Exercise.  Certificates for Warrant Shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its Deposit/Withdrawal at Custodian (“DWAC”) system if the
Company is a participant in such system, and otherwise by delivery to the
address specified by the Holder in the Notice of Exercise, within five (5)
Trading Days from the delivery to the Company of the Notice of Exercise form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price and all taxes required to be
paid by the Holder, if any, have been paid.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        iii.           Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

         

        iv.           Rescission
Rights.  If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 2 by the
Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise.

         

        v.          
Obligation
Absolute. The Corporation’s obligations to issue and deliver the
certificates representing the Warrant Shares upon exercise of the Warrant in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Corporation or any violation
or alleged violation of law by the Holder or any other person, and irrespective
of any other circumstance which might otherwise limit such obligation of the
Corporation to the Holder in connection with the issuance of such certificates
representing the Warrant Shares.  The Corporation shall issue the
certificates representing the Warrant Shares upon a properly noticed
exercise.

         

        vi.           No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall round up to the next whole share.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        vii.           Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder or other incidental expense in respect of the
issuance of such certificate, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
the assignment shall be subject to Section 4 below, and
the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto.

         

        viii.           Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

         

        Section
3.                                Certain
Adjustments.

         

        a)           Stock Dividends and
Splits.  If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), provided that this clause (i) subdivides outstanding
shares of Common Stock into a larger number of shares, (ii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iii) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted.  Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

         

        b)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula.  For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(b) and
insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

         

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        c)           Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least ten (10) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (X) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (Y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the ten (10) day period commencing on
the date of such notice to the effective date of the event triggering such
notice.

         

         

        Section
4.             Transfer of
Warrant.

         

        a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d)
hereof, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

         

        b)           New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

         

        c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

         

        d)           Transfer
Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall
not be registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities
Act and under applicable state securities or blue sky laws, (ii) that the holder
or transferee execute and deliver to the Company an investment letter in form
and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.

         

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        Section
5.             Transfer of
Securities.

         

        a)           This
Warrant and the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon, or otherwise, shall not be transferable
except upon compliance with the provisions of the Securities Act of 1933, as
amended (the “Securities Act”) and
applicable state securities laws with respect to the transfer of such
securities.  The Holder, by acceptance of this Warrant, agrees to be bound
by the provisions of Section 4 hereof and to indemnify and hold harmless
the Company against any loss or liability arising from the disposition of this
Warrant or the Warrant Shares issuable upon exercise hereof or any interest in
either thereof in violation of the provisions of this Warrant.

        

        b)           Each
certificate for the Warrant Shares and any shares of capital stock received in
respect thereof, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon or otherwise, and each certificate for any
such securities issued to subsequent transferees of any such certificate shall
(unless otherwise permitted by the provisions hereof) be stamped or otherwise
imprinted with a legend in substantially the following form:

         

        “NEITHER
THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW AND NEITHER MAY BE SOLD OR OTHERWISE TRANSFERRED UNTIL
(I) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(II) THE COMPANY SHALL HAVE RECEIVED A WRITTEN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES
ACT AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER.”

        

        Section
6.             Miscellaneous.

         

        a)           No Rights as Shareholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof as set forth in Section
2.

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        b)           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

         

        c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

         

        d)           Authorized
Shares.  The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant.  The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant.  The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be listed, if
applicable.

         

        Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction
thereof.

         

        e)           Jurisdiction. All
questions concerning the construction, validity, enforcement, venue,
jurisdiction, and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

         

        f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

         

        g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

        h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

         

        i)           Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

         

        j)           Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

         

        k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.

         

        l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived only with the
written consent of the Company and the Holder.

         

        m)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

         

        n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

         

        

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

         

         

        
 

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

         

        

        Dated:  June
7, 2009

        
 

        

        
          	
                  PIMI
      AGRO CLEANTECH, INC.

                   

                   

                
	
                  By:/s/ Youval Saly

                       Name:
      Youval Saly

                       Title:  Chief
      Executive Officer

                
	 
      

        

        

        

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        

        
 

        

        NOTICE
OF EXERCISE

        

        TO:           PIMI
AGRO CLEANTECH, INC. (THE “COMPANY”)

        

        (1)           The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if
any.

         

        (2)           Payment
will be made in lawful money of the United States.

         

        (3)           Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

         

        _______________________________

        

        

        The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

        

        _______________________________

        

        _______________________________

        

        _______________________________

        

        (4)  Accredited
Investor.  The undersigned certifies that it is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

        

        [SIGNATURE
OF HOLDER]

        

        Name of
Investing
Entity:                                                                                                                                          

        Signature of Authorized Signatory of
Investing
Entity:                                                                                                                                          

        Name of
Authorized
Signatory:                                                                                                                                          

        Title of
Authorized
Signatory:                                                                                                                                          

        Date:                                                                                                                                          

        

        

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        

        

         

        ASSIGNMENT
FORM

        

        (To
assign the foregoing warrant, execute

        this form
and supply required information.

        Do not
use this form to exercise the warrant.)

        

        

        

        FOR VALUE
RECEIVED, _________ shares of the foregoing Warrant and all rights evidenced
thereby are hereby assigned to _________________________________whose address is
____________________________________________________________________________________________________________________________.

        

        Dated:  ______________,
_______

        

        

        Holder’s
Signature:                                           _____________________________

        

        Holder’s
Address:                                           
_____________________________

        

                                   
_____________________________

        

        

        

        Signature
Guaranteed:  ___________________________________________

        

        

        NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

        

        

        

        

        

        11

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