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<SEC-DOCUMENT>0000950134-07-020440.txt : 20080225
<SEC-HEADER>0000950134-07-020440.hdr.sgml : 20080225
<ACCEPTANCE-DATETIME>20070925152950
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950134-07-020440
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20070925

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CEVA  INC
		CENTRAL INDEX KEY:			0001173489
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				770556376
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2033 GATEWAY PLACE, SUITE 150
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95110-1002
		BUSINESS PHONE:		4085142900

	MAIL ADDRESS:	
		STREET 1:		2033 GATEWAY PLACE, SUITE 150
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95110-1002

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARTHUSCEVA INC
		DATE OF NAME CHANGE:	20021101

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CEVA INC
		DATE OF NAME CHANGE:	20020515
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" rowspan="3"><DIV style="margin-left:0px; text-indent:-0px"><IMG src="f34016f3401601.gif" alt="(MORRISON FOERSTER LOGO)">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;425 MARKET STREET
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">morrison &#038; foerster llp</FONT></TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SAN FRANCISCO
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">new york, san francisco, </FONT></TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CALIFORNIA 94105-2482
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">los angeles, palo alto, </FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">san diego, washington, d.c.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TELEPHONE: 415.268.7000
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">denver, northern virginia,</font></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FACSIMILE: 415.268.7522
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">orange county, sacramento, </FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">walnut creek, century city</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">WWW.MOFO.COM
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">tokyo, london, beijing, </FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">shanghai, hong kong, </FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS">singapore, brussels</FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Writer&#146;s Direct Contact</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;415.268.6722</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">JLiu@mofo.com</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">September&nbsp;25, 2007<BR>
<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><u>By Edgar Transmission</u><BR>
<u>and Overnight Delivery</u>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
Division of Corporation Finances<BR>
100 F Street, N.E.<BR>
Washington, DC 20549-6010

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>CEVA, Inc.</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Commission File No.&nbsp;000-49842</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2006</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U><B>Form&nbsp;10-Q for the Quarterly Period Ended June&nbsp;30, 2007</B></U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Ms.&nbsp;Lochhead:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On behalf of CEVA, Inc., a Delaware corporation (the &#147;Company&#148;), we, as counsel to the
Company, are providing you with the following information and responses based upon information
provided to us by the Company in response to the letter dated August&nbsp;24, 2007 (the &#147;Comment
Letter&#148;), from the staff (the &#147;Staff&#148;) of the Securities and Exchange Commission (the &#147;Commission&#148;)
regarding the above-referenced periodic reports.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The relevant text of the Comment Letter has been included in this letter, and the numbering of
the Company&#146;s responses set forth below corresponds to the numbering in the Comment Letter.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 2<BR>
CONFIDENTIAL

</DIV>

<DIV align="LEFT" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s responses to the Staff&#146;s comments are as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2006</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operation,
page 26</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Liquidity and Capital Resources, page 39</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We see that you present the non-GAAP measures, &#147;net cash provided by operations excluding a
net investment in marketable securities&#148; for 2006 and &#147;net cash provided by operations
excluding disposal of marketable securities and restructuring and reorganization costs&#148; for
2005 and 2004. Item&nbsp;10(e)(1)(ii) of Regulation&nbsp;S-K prohibits excluding charges or liabilities
that required, or will require, cash settlement from a non-GAAP liquidity measure. As such,
please revise future filings to remove the non-GAAP measures or explain to us how you have
complied with Item 10(e) of Regulation&nbsp;S-K. You may continue to highlight for investors any
items included in cash flows from operations for the periods.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Staff&#146;s comments are noted for future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Item&nbsp;9A. Controls and procedures, page 41</I></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note your disclosure that management has concluded that your disclosure controls and
procedures are effective &#147;in timely alerting them to material information required to be
included in this report.&#148; The language that is currently included after the word &#147;effective&#148;
in your disclosure appears to be superfluous, since the meaning of &#147;disclosure controls and
procedures&#148; is established by Rule&nbsp;13a-15(e) of the Exchange Act. However, if you do not wish
to eliminate this language, please revise so that the language that appears after the word
&#147;effective&#148; is substantially similar in all material respects to the language that appears in
the entire two-sentence definition of &#147;disclosure controls and procedures&#148; set forth in Rule
13a-15(e). Please apply this guidance to future filings.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Staff&#146;s comments are noted for future filings.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 3<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Consolidated Financial Statements</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Report of Independent Registered Public Accounting Firm, page 43</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We see from Note 9 that the majority of your operations and properties are located in the
United States but that your financial statements are audited by an independent registered
public accounting firm located in Tel Aviv, Israel. The Staff interprets Article&nbsp;2 of
Regulation&nbsp;S-X to require the audit report on the financial statements of a registrant that is
not a foreign private issuer to be rendered ordinarily by an auditor licensed in the United
States. Please tell us how you have complied with Article&nbsp;2 to Regulation&nbsp;S-X in your
selection of an auditor and discuss the factors you considered relevant when evaluating the
appropriateness of that selection. Discuss each of the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The location of the majority of your assets, revenues, and operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage of your assets, revenues, and operations located in the country
where the auditor resides.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The members of your management and percentage of accounting records located in the
U.S. and in Israel.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whether the majority of the audit work is conducted inside or outside the U.S.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Also refer to Section&nbsp;V-K to the International Reporting and Disclosure Issues in the
Division of Corporation Finance document which is available on our website at
<U>www.sec.gov</U>.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: In response to the Commission&#146;s comment, the Company has assessed the instructions in
Regulation&nbsp;S-X 2-01 and Section&nbsp;V-K to the International Reporting and Disclosure Issues in the
Division of Corporation Finance document and has concluded that the use of an auditor located in
Israel is appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regulation&nbsp;S-X 2-01 does not address whether the state or country where the accountant is licensed
must coincide with the location of the registrant&#146;s corporate offices or place where the registrant
conducts its principal operations. Although the Staff interprets Regulation&nbsp;S-X 2-01 to require
the audit report on a domestic registrant&#146;s financial statements to be rendered ordinarily by an
auditor licensed in the U.S., the Staff has made exceptions for a domestic registrant where
substantially all of the registrant&#146;s
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 4<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">operations are foreign, and the audit report is rendered from the location of its principal
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In deriving the Company&#146;s determination on a facts and circumstances basis, the Company considered
the following factors:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Revenues, assets and operations &#150; The majority of the revenues and operations of the
Company are derived outside the U.S. (approximately 74%). Approximately 52% of the
revenues are generated in Israel, where the auditor resides. The intellectual property
rights belong to, and the research and development activities reside within, the Company&#146;s
wholly-owned Israeli and Irish subsidiaries. Although the majority of the total assets of
the Company (approximately 60%) are located in the U.S., these are not the Company&#146;s
operating assets and mainly are comprised of goodwill (30% of the total consolidated
assets) and cash and marketable securities (30% of the total consolidated assets).
Substantially all of the Company&#146;s tangible assets are located outside the United States
and are better subject to the audit review process in Israel than they would be in the
United States.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As of December&nbsp;31, 2006, the following ratios were noted:</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000">December 31, 2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Ireland</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Israel</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">USA</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">&#038; Others</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">18</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">60</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">26</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating expenses</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">48</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">21</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">31</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Management &#150; The Company&#146;s management is located in Israel, where the auditor resides.
The Chief Executive Officer, the Chief Financial Officer and the Director of Accounting,
who is in charge of the consolidation of the financial statements and Commission filings,
reside in Israel.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Employees &#150; 124 of 196 of the Company&#146;s employees (<I>i.e.</I>, 63%) are located in Israel.</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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</DIV>


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 5<BR>
CONFIDENTIAL

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Accounting records &#150; The accounting records of the Company&#146;s wholly-owned Israeli
subsidiary are located in Israel. The accounting records of the Company and the Company&#146;s
wholly-owned Irish subsidiaries are located outside the U.S. (in Ireland). The
consolidation of the financial statements is prepared in Ireland but reviewed and approved
in Israel.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Audit work &#150; All the audit work is conducted outside the U.S. Kost, Forer, Gabbay and
Kasierer, a member of Ernst &#038; Young Global (&#147;EY Israel&#148;), performs the audit of the
Company and all the subsidiaries. The audit of the Irish subsidiary, including Section&nbsp;404
procedures and testing, is performed by EY Israel in Ireland.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We note that the AICPA SEC Regulation&nbsp;Committee&#146;s Practices Task Force meeting in November&nbsp;2001
stated that the Staff likely would not question the use of a foreign auditor by an existing
registrant when a reasonable basis for the original selection exists. Thus, from the perspectives
of ease of auditability of tangible assets, access to Company personnel and accounting records,
cost to the Company of the audit process, and ability of the auditors to perform the attestation
required by PCAOB Auditing Standard No.&nbsp;5, performance of the audit by an auditor based in Israel
is consistent with the Staff&#146;s policy with respect to the use of foreign auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on all the factors and information set forth above, the Company believes it is appropriate to
have an audit report issued by an audit firm based in Israel. Should the circumstances on which
the Company&#146;s conclusion is based change, the Company&#146;s conclusion will be re-considered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Note 4. Investment in Other Company, Net, page F-19</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note that you transferred your GPS technology and business to GloNav in exchange for
equity ownership in GloNav. Please describe your level of continuing involvement in GloNav.
Tell us your reasons for concluding that recognition of the transaction as a divestiture for
accounting purposes is appropriate. Please refer to SAB Topic 5E.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company supplementally advises the Staff that it does not have any continuing
involvement in GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">According to SAB Topic 5E, the divestiture of a business operation should be applied when the risks
of the business have, in substance, been transferred to the new business operation. In assessing
whether the legal transfer of ownership of GloNav has resulted in a divestiture for accounting
purposes, the Company reviewed the principal
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 6<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">considerations of the transaction to assess whether the risks and other incidents of ownership have
been transferred to GloNav with sufficient certainty. Such considerations consist of the facts
that the Company does not have effective veto power over GloNav regarding contracts and customers
or other business dealings, and the Company does not have any board representation, or other
involvement in the continuing operations of the business entailing risks or managerial authority
similar to that of ownership. The Company basically does not have any ability to exercise
significant influence over GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the above facts, there is no continuing involvement in GloNav, and the Company is divorced
from the risks of ownership and the appropriate accounting treatment for the transaction is as a
divestiture.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Revise this note in future filings to disclose the existence of any commitments and
contingencies to GloNav. Additionally, please disclose the circumstances under which you
would recognize the gain deferred from the divestment. Please refer to SAB Topic 5U.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company supplementally advises the Staff that there are no commitments or other
contingencies related to the divestment of its GPS technology and related business to GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">According to SAB Topic 5U, the deferred gain should not be recognized until such time as cash flows
from operating activities are sufficient to fund debt service and dividend requirements (on a full
accrual basis) or the Company&#146;s investment in GloNav has been or could be readily converted to cash
(<I>e.g.</I>, active trading market develops in GloNav&#146;s securities, the Company is not restricted from
selling such securities, and the Company can sell the securities received on a non-recourse basis,
etc.) and the Company has no further obligations under any debt guarantees or other agreements that
would require it to make additional investments in GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since GloNav is a highly leveraged entity and according to the Company&#146;s forecast, additional
funding will be required by the end of the second anniversary of its incorporation in May&nbsp;2006, the
Company will not be able to recognize a gain from the transaction until GloNav has sufficient cash
flows as define above. Therefore, the Company recorded and presented the gain in the balance sheet
as a deduction from its investment in GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company will revise its future filings in accordance with the above discussion.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 7<BR>
CONFIDENTIAL

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tell us and revise future filings to disclose how you determined the $5.9&nbsp;million value
attributed to the equity investment in GloNav. In addition, please disclose how you
determined the amount of impairment recorded to goodwill and intangible assets for the GPS
technology and business.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company used an independent expert to evaluate the fair value of the shares issued
to the Company by GloNav, consisting of 10% voting Series&nbsp;A-1 Preferred Stock (&#147;Series&nbsp;A-1&#148;) on a
fully diluted basis at the time of completion of the divestment and 9.9% non-voting Series&nbsp;A-2
Preferred Stock (&#147;Series&nbsp;A-2&#148;) on a fully diluted basis at the time of completion of the
divestment. The Corporate Securities Valuation Model (&#147;CSVM&#148;) was used to estimate the relative
value of GloNav&#146;s total firm value on the valuation date, which was April&nbsp;1, 2006. The CSVM
provides a quantitative method to estimate the relative values of securities in a firm&#146;s capital
structure. After the individual equity classes were assigned a value, a lack of control discount
was applied to the Series&nbsp;A-1 and then an additional discount for the lack of voting rights was
applied to the Series&nbsp;A-2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The determination of the amount of impairment recorded for goodwill and intangible assets for the
GPS technology and business was calculated in accordance with paragraph 39 in Statement of
Financial Accounting Standard (&#147;SFAS&#148;) No.&nbsp;142, &#147;Goodwill and Other Intangible Assets.&#148; According
to this paragraph, when a portion of a reporting unit that constitutes a business is to be
disposed, goodwill associated with that business shall be included in the carrying amount of the
business in determining the gain or loss on disposal. The amount of goodwill included in that
carrying amount shall be based on the relative fair values of the business to be disposed and the
portion of the reporting unit that will be retained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the GPS assets purchased by GloNav was evaluated by the independent expert as
$6.0&nbsp;million. The fair value of the Company was determined to be $115&nbsp;million. Therefore,
approximately 5% of the goodwill recorded on the Company&#146;s books was attributed to the disposed GPS
assets. In addition, the Company disposed other intangible assets (patents, current technology and
customer backlog), which were directly attributed to the GPS technology and associated business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company will revise its future filings in accordance with the above discussion.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tell us and revise future filings to clarify whether you are accounting for the investment in
GloNav under the cost or equity method of accounting. Please discuss how you considered your
ability to exercise significant influence over</TD>
</TR>

</TABLE>
</DIV>
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</TABLE>
</DIV>

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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 8<BR>
CONFIDENTIAL

</DIV>

<DIV align="CENTER" style="font-size: 10pt; margin-top: 6pt">GloNav when concluding on the appropriate accounting treatment for the investment.</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company supplementally advises the Staff that the accounting for the investment in
GloNav is under the cost method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">According to Accounting Principles Board Opinion No.&nbsp;18 &#147;The Equity Method of Accounting for
Investment in Common Stock&#148; (&#147;APB 18&#148;), an investment of less than 20% of the voting stock of an
investee should lead to a presumption that an investor does not have the ability to exercise
significant influence, unless such ability can be demonstrated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some of the indicators that may demonstrate that there is an ability to exercise significant
influence according to Paragraph&nbsp;17 in APB 18 are: representation on the board of directors,
participation in policy making processes, material intercompany transactions, interchange of
managerial personnel or technological dependency and the extent of ownership by an investor in
relation to the concentration of other shareholdings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In situations where an investor holds 20% or more of the voting stock of an investee, APB 18 does
not require the investor to actively exercise its influence over the investee in order for
significant influence to exist. The Company holds 12.25% of the outstanding voting stock of GloNav
(10.00% on a fully-diluted basis in consideration of all outstanding capital stock) and therefore
does not have the ability to exercise significant influence over GloNav.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Staff has stated that the determination of whether an investor has significant influence over
an investee should not be limited to the voting powers conveyed by the voting common stock but
rather should consider all means through which the investor may influence the financial and
operating policies of the investee, however obtained. Examples of these circumstances include:
contractual board representation, veto rights or voting rights conveyed by a security other than
voting common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not have effective veto power over GloNav regarding contracts and customers or
other business dealings, and the Company does not have any board representation, or other
involvement in the continuing operations of the business entailing risks or managerial authority
similar to that of ownership.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since the investment in GloNav is less than 20% of the voting stock of the company and based on the
above indicators, the Company believes it is appropriate for the investment to be presented under
cost method and not under the equity method.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 9<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Note 12. Reorganization, Restructuring and Severance Charge, page F-32.</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We see that you recognized a charge in 2004 and 2005 related to under-utilized building
operating lease obligations. We see that the charge of approximately $3&nbsp;million is still
accrued at December&nbsp;31, 2006 related to the property in Dublin, Ireland. Please tell us how
you considered paragraphs 15 and 16 of SFAS 146 in determining the timing of the accrual for
contract termination and continuing lease charges for the Dublin property. It is unclear from
your disclosure whether the contract has been terminated and whether the company has ceased to
occupy the property and how this impacts the timing of the accrual. Please also clarify in
your response and in future filings the composition and nature of the charges included in the
provision for future operating lease charges on idle facilities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company followed the guidance of paragraphs 15 and 16 of SFAS 146 in determining the
timing of the accrual for contract termination and continuing lease charges for the Dublin property
and its disclosure in prior filings with the Commission relating to the accounting treatment for
the Dublin property reflects consideration of such guidance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company supplementally advises the Staff that the contract relating to the Dublin property has
not been terminated but the Company gradually vacated the building until it completely vacated the
building during the second quarter of 2006. Below is a brief summary of the significant events
associated with the Dublin property that impacted the timing and nature of the accruals for the
said property and the Company&#146;s consideration of paragraphs 15 and 16 of SFAS 146 in relation to
these events.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Fiscal Year 2004; Fiscal Year 2005; First Quarter of Fiscal Year 2006</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Prior to fiscal 2004, the Company disclosed in its filings with the Commission that it had
implemented various restructuring plans to re-align its business that resulted in the relocation of
certain corporate offices and the termination of employment of certain employees, both of which
resulted in the under-utilization of certain of the Company&#146;s leasehold properties. The Company&#146;s
Annual Report on Form 10-K/A for fiscal 2004 (the &#147;<B>2004 10-K</B>&#148;) stated that the reorganization,
restructuring and severance charges incurred during that fiscal year included a provision for
under-utilized building operating lease obligations, including the Dublin property.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 10<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In its audited financial statements for fiscal 2004, the Company stated that the provision for
under-utilized operating lease obligations was determined in accordance with paragraph 16 of SFAS
146.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company supplementally advises the Staff that it consulted a real estate agent in deriving its
estimates and assumptions for fiscal 2004 and subsequent periods. The agent provided the Company
with the relevant information about market conditions and the marketability of the Dublin property.
The accrual calculation for fiscal 2004 and subsequent periods was based in part on the information
received from the real estate agent and management&#146;s assumptions taking into consideration the guidance in paragraph 16 of SFAS 146.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As noted in the Quarterly Reports on Form 10-Q for the first and second quarters of fiscal 2005,
the Company continued to assess the accrual charges for the Dublin property in accordance with
paragraph 16 of SFAS 146. Based on the assumptions outlined in the 2004 10-K, as updated when
necessary, the Company determined that no revision to the accrual amount was necessary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the third quarter of fiscal 2005, the Company disclosed in the Quarterly Report on Form 10-Q
for the same period that contrary to prior periods its management were provided with an opportunity
to conduct negotiations with the Dublin property landlord to exit the property in consideration for
a surrender fee. Based on the status of the then negotiations and in consideration of paragraph 15
of SFAS 146, the Company subsequently updated its accrual for the Dublin property to reflect such
exit strategy, resulting in a net additional charge of $1.7&nbsp;million in the third quarter of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, by fiscal year end 2005, exit negotiations with the landlord stalled. Therefore, based on
the uncertainty of the exit negotiations, the Company disclosed in the Annual Report on Form 10-K
for fiscal 2005 (the &#147;<B>2005 10-K</B>&#148;) that it determined to update its accrual for the Dublin property
on a sub-let basis in accordance with paragraph 16 of SFAS 146. However, after assessing the
management&#146;s assumptions at December&nbsp;31, 2005 in respect of future vacancy rates and sublet rents
in light of then-current market conditions and their discount rate based on applicable projected
interest rates, all in accordance with paragraph 16 of SFAS 146 and consistent with prior
assumptions when the Company followed the guidance of paragraph 16 of SFAS 146, the Company
determined that no revision to the accrual amount was necessary. However, based on certain
representations made by the landlord during negotiations, the Company also noted in the 2005 10-K
that if it were successful in surrendering its long term lease relating to this property, it would
expect an associated cash outflow of approximately $3.2&nbsp;million in 2006. The 2005 10-K disclosed
the parameters for the Company&#146;s determination of the accrual amount for the Dublin property.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 11<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The status of negotiations with the landlord remained unchanged during the first quarter of fiscal
2006. After assessing the assumptions as of March&nbsp;31, 2006 consistent with prior assumptions and
in accordance with paragraph 16 of SFAS 146, the Company determined that no revision to the accrual
amount as of March&nbsp;31, 2006 was necessary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Second Quarter of 2006 to the End of the First Quarter of 2007</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Beginning in the second quarter of 2006, the Company re-initiated negotiations with the Dublin
property landlord to seek a surrender of the lease agreement. Based on discussions with the
landlord and drafts of the documents exchanged between the lawyers for the Company and the
landlord, the Company in good faith believed that an arrangement had concluded with the landlord
whereby the Company would pay a one time reverse premium payment of 2.5&nbsp;million Euro (translated
into approximately USD 3.3&nbsp;million per the relevant reporting period) in consideration for the
surrender and termination of the lease agreement. Based on this understanding of the Company, it
completely vacated the Dublin property during the latter part of the second quarter of 2006 as its
initial step to surrendering the property. From the second quarter of 2006 to the end of the first
quarter of 2007, the Company continued its exit negotiations with the landlord. The negotiations
progressed slowly with the landlord during this period due to the involvement of various parties
and the resultant scheduling constraints, extensive review of various tax considerations for the
deal structure at the request of the landlord and the unavailability of the landlord during certain
prolonged periods. During this period, drafts setting forth the mechanics for the surrender of the
lease were exchanged between the parties and attorneys and tax advisors from both sides were
heavily involved in structuring the deal. During this time the landlord did not renegotiate the
basic surrender fee amount of 2.5&nbsp;million Euro and gave no affirmative indication that it would not
proceed with the exit arrangement negotiated by the parties. The Company&#146;s Board of Directors also
approved the one-time payment of the surrender amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Therefore, the accrual balance for the Dublin property as reported in the Company&#146;s Quarterly
Reports on Form 10-Q for the quarters ended June&nbsp;30, 2006 and September&nbsp;30, 2006, March&nbsp;31, 2007
and in the Company&#146;s Annual Report on Form 10-K for fiscal 2006 (the &#147;<B>2006 10-K</B>&#148;) reflected this
status of the events in accordance with paragraph 15 of SFAS 146. The 2006 10-K disclosed that if
the Company was successful in surrendering its long term lease relating to the Dublin property, it
would expect an associated cash outflow of approximately $3.3&nbsp;million associated with the
restructuring charges. However, in consideration of the history of negotiations with the landlord,
the Company cautioned in the 2006 10-K that &#147;revisions to our estimates of this liability could
materially impact our operating results and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 12<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">financial position in future periods if anticipated events and assumptions either changes or do not
materialize.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Second Quarter of 2007 and Thereafter</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As reported in the Company&#146;s Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2007 (&#147;<B>Q2
2007 10-Q</B>&#148;), in July&nbsp;2007, the landlord of the Dublin property initiated legal proceedings for full
payment of rent for the period July&nbsp;2006 to September&nbsp;2007, including interest on the rent in
arrears, totaling 1,198,000 Euro. During the same time period, exit negotiations for the surrender
of the lease agreement also halted. As a result of these new and significant developments, the
Company once again began to evaluate the lease accrual as of June&nbsp;30, 2007 on a sublet basis in
accordance with paragraph 16 of SFAS 146. Similar to the assessments the Company made in fiscal
years 2004 and 2005 and through to the end of the first quarter of 2006, in determining the amount
of the accrual, the Company consulted a real estate agent and received advice for market conditions
and the marketability of the building. The accrual calculation was based in part on the information
received by the real estate agent and management&#146;s assumptions taking into consideration factors
like the estimated periods that the facilities would be empty before being sublet, an assessment of
the sublet rents that could be achieved based on current market conditions, vacancy rates and
future outlook and the application of a discount rate over the remaining period of the lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company further supplementally advises the Staff that subsequent to the filing of the Q2 2007
10-Q, the Company paid to the landlord the full payment of rent for the period July&nbsp;2006 to
September&nbsp;2007, including interest on the rent in arrears, totaling 1,222,011.63 Euro, as well as
certain legal fees in the sum of 31,141.54 Euro incurred by the landlord in connection with its
legal proceedings. The Company continues to seek an exit strategy with respect to the Dublin
property. However, in consideration of the history of negotiations with the landlord and the
general uncertainty of the landlord&#146;s intentions, the Company will continue to determine the timing
and amount of the accrual for the said property on a sublet basis in accordance with paragraph 16
of SFAS 146. If any significant developments later materialize, the Company will re-assess its
method of determination for the accrual.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company will clarify the current status of the Dublin property in its future filings consistent
with the discussions above.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As a related matter, we see from page 12 in the Form 10-Q for June&nbsp;30, 2007 that there is
outstanding litigation related the Dublin property. We note that the landlord is requesting
full payment of past rent in the amount of 1,198 Euro.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 13<BR>
CONFIDENTIAL

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please tell us whether this amount is included in the restructuring accrual or how this
demand is otherwise related to the amounts included in the accrual at December&nbsp;31, 2006 and
June&nbsp;30, 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The legal proceedings initiated by the landlord in July&nbsp;2007 (which proceedings have now
been settled) sought the full lease payment of the Dublin property for the period July&nbsp;2006 to
September&nbsp;2007 (the lease for the third quarter of 2007 was due on July&nbsp;1, 2007) and interest on the rent in arrears totaling 1,222,011.63 Euro. The
principal amount of the lease payment for the abovementioned periods for the Dublin property was
included in the restructuring accrual / other liabilities as of June&nbsp;30, 2007 and as of December
31, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Form&nbsp;10-Q for the quarterly period ended June&nbsp;30, 2007</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Condensed Consolidated Financial Statements</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Note 6. Common Stock and Stock-Based Compensation Plans, page 9</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note that you issued options to purchase 754,500 shares of common stock and recognized
stock based compensation expense of $1,150,000 during the six months ended June&nbsp;30, 2007. We
also see that you issued options to purchase 213,500 shares of common stock and recognized
stock based compensation of $984,000 during the six months ended June&nbsp;30, 2006. We note that
you changed the method for valuing stock based compensation awards from the Black-Scholes
method to the Monte-Carlo simulation model effective January&nbsp;1, 2007. Due to the significant
increase in options issued during the six months ended June&nbsp;30, 2007, please tell us why there
would not be a more significant increase in the amount of stock based compensation recognized
in 2007 compared to 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Company supplementally advises the Staff that the primary reason for the decrease in
the amount of stock-based compensation expense recognized during the six months ended June&nbsp;30, 2007
compared to the six months ended June&nbsp;30, 2006 is the decrease in the number of options granted by
the Company in 2006 and the first half of 2007 compared to prior periods as detailed in the table
below.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 14<BR>
CONFIDENTIAL

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>The compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>The compensation</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>expenses recorded</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>expenses recorded</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>during the first</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>during the first</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>half of 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>half of 2007</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>granted during the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>relating to these</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>relating to these</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #ffffff"><B>Grant period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><B>period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>grants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>grants</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #ffffff">in thousand $</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #ffffff">in thousand $</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,696,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2004-2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,950,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">321</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">335,000 (*</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">146</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jan &#151; June&nbsp;2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">754,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">282</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ESPP expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,150</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>984</B></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(*)</TD>
    <TD>&nbsp;</TD>
    <TD>213,500 options were granted during the six months ended June&nbsp;30, 2006.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2004-2005, the Company granted approximately 2.95&nbsp;million options and during 2006 and the first
half of 2007 it granted approximately 1.1&nbsp;million options. The Company recognizes the compensation
expense over the vesting period by using the accelerated attribution method, net of estimated
forfeiture. Therefore, the compensation expense recognized in the first year is significantly
higher than the expenses recognized in the years following the grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Due to the above explanation, there was a slight decrease in the compensation expense recorded
during the six months ended June&nbsp;30, 2007 as compared to the compensation expense recorded during
the six months ended June&nbsp;30, 2006, despite the significant increase in the number of options
granted during this period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Form&nbsp;8-K dated July&nbsp;24, 2007</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We see that you highlight &#147;pro forma non-GAAP net income&#148; in the headline to the press
release included as Exhibit&nbsp;99.1. Item&nbsp;10(e)(1)(i) of Regulation&nbsp;S-K requires that whenever
one or more non-GAAP financial measures are provided the registrant must include a
presentation, with equal or greater prominence, of the most directly comparable financial
measure or measures calculated and</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 15<BR>
CONFIDENTIAL

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>presented in accordance with Generally Accepted Accounting Principles (GAAP). Please
revise your discussions in all future filings to fully comply with the requirements of Item
10.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Staff&#146;s comments are noted for future filings.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We note that you refer to your non-GAAP information as &#147;pro forma&#148; results. The pro forma
terminology has very specific meaning in accounting literature, as indicated by Article&nbsp;11 of
Regulations S-X. Please revise your presentation to omit the pro forma terminology when
referring to your non-GAAP information.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Staff&#146;s comments are noted for future filings.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">13.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In future filings please provide a reconciliation of non-GAAP basic and diluted net income
per share to the most directly comparable GAAP measure, which includes a reconciliation of the
numerators, as well as the weighted average number of common shares used in computing non-GAAP
basic and diluted net income per share, to the amounts used when calculating the GAAP amounts.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Response</B>: The Staff&#146;s comments are noted for future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the Company&#146;s responses to the Commission&#146;s comments, the Company acknowledges
that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is responsible for the adequacy and accuracy of the disclosure in the
filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Staff comments or changes to disclosure in response to Staff comments do not foreclose
the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company may not assert Staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">****
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should you have any further questions or comments regarding the captioned filings and/or this
letter, please direct them to me at the telephone number provided above.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="f34016f3401602.gif" alt="(MORRISON &#038; FOERSTER LLP LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kristin Lochhead<BR>
Securities and Exchange Commission<BR>
September 25, 2007<BR>
Page 16<BR>
CONFIDENTIAL

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Very truly yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ Jaclyn Liu

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Jaclyn Liu

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">cc: Yaniv Arieli &#150; CEVA, Inc.

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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