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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001144204-05-013601.txt : 20050502
<SEC-HEADER>0001144204-05-013601.hdr.sgml : 20050502
<ACCEPTANCE-DATETIME>20050502155805
ACCESSION NUMBER:		0001144204-05-013601
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20041231
FILED AS OF DATE:		20050502
DATE AS OF CHANGE:		20050502

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DATA SYSTEMS & SOFTWARE INC
		CENTRAL INDEX KEY:			0000880984
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				222786081
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19771
		FILM NUMBER:		05790728

	BUSINESS ADDRESS:	
		STREET 1:		200 RTE 17
		CITY:			MAHWAH
		STATE:			NJ
		ZIP:			07430
		BUSINESS PHONE:		2015292026

	MAIL ADDRESS:	
		STREET 1:		200 ROUTE 17
		CITY:			MAHWAH
		STATE:			NJ
		ZIP:			07430

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DEFENSE SOFTWARE & SYSTEMS INC
		DATE OF NAME CHANGE:	19930328
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>v017274_10-ka.htm
<TEXT>
<HTML><HEAD>
<TITLE>
</TITLE>
</HEAD><BODY id=38 bgColor=#ffffff>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>
<DIV>
<HR align=left width="100%" color=#000000 noShade SIZE=3>
</DIV>SECURITIES AND EXCHANGE COMMISSION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>WASHINGTON,
D.C. 20549</STRONG></FONT><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV>
<HR align=center width="20%" color=#000000 noShade SIZE=1>
</DIV>
<DIV>&nbsp;</DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AMENDMENT
NO. 1 ON FORM 10-K/A TO</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><STRONG>FORM
10-K</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
EXCHANGE ACT OF 1934</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><BR></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=middle width="37%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>For
      the fiscal year ended December 31, 2004</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=left width="4%">&nbsp;</TD>
    <TD vAlign=top align=middle width="39%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Commission
      file number: 0-19771</STRONG></FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>DATA
SYSTEMS &amp; SOFTWARE INC.</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(Exact
name of registrant as specified in charter)</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><BR></DIV>
<DIV align=left>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="41%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Delaware</STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="29%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>22-2786081</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="41%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(State
      or other jurisdiction of</STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="29%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(I.R.S.
      Employer Identification No.)</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="41%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>incorporation
      or organization)</STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="29%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="41%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>200
      Route 17, Mahwah, New Jersey</STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="29%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>07430</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="41%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(Address
      of principal executive offices)</STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=middle
      width="29%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(Zip
      Code)</STRONG></FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(201)
529-2026</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Registrant&#8217;s
telephone number, including area code</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>
<DIV>
<HR align=center width="20%" color=#000000 noShade SIZE=1>
</DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Securities
registered pursuant to Section 12(b) of the Act: None</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Securities
registered pursuant to Section 12(g) of the Act:</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Common
Stock, par value $.01 per share</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Common
Stock Purchase Rights</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Title of
Class)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes&nbsp; <FONT face=Wingdings size=3>x</FONT></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;&nbsp;
No <FONT face=Wingdings size=3>o</FONT></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant&#8217;s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. <FONT face=Wingdings size=3>o</FONT></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Rule&nbsp;12b-2 of the Act).&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
Yes&nbsp; <FONT face=Wingdings size=3>o</FONT></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;
No&nbsp; <FONT face=Wingdings size=3>x</FONT></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
aggregate market value of the common stock held by non-affiliates of the
registrant at June 30, 2004 </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">was
approximately $13.3</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">million.
The aggregate market value was calculated by using the closing price of the
stock on that date on The Nasdaq SmallCap Market. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number of
shares outstanding of the registrant&#8217;s common stock, as of </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March 31,
2005: 8,116,691</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>DOCUMENTS
INCORPORATED BY REFERENCE:</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None.</FONT><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>DATA
SYSTEMS &amp; SOFTWARE INC.</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AMENDMENT
NO. 1 ON FORM 10-K/A</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>TO
ANNUAL REPORT ON FORM 10-K</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>TABLE
OF CONTENTS</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV align=left>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=top align=left
    width="72%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=top align=right
    width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Page
      </STRONG></FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left
    width="72%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right
    width="8%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PART
      III</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right
    width="8%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left
    width="72%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right
    width="8%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
      10. Directors and Executive Officers of the Registrant</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
      11. Executive and Director Compensation</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
      13. Certain Relationships and Related Transactions</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
      14. Principal Accounting Fees and Services</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="72%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Signatures</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-i-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%" align=left></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PART
III</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
10. </STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U>Directors
and Executive Officers of the Registrant</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Directors,
Executive Officers and Key Managers</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Set forth
below is certain information concerning our directors, executive officers and
key managers: </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=left>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=left
    width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=middle
    width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=top align=left
    width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Position</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top align=left width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">George
      Morgenstern</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">71</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
      Chairman of the Board, President and Chief Executive Officer; Chairman of
      the Board of our dsIT Technologies Ltd. subsidiary (&#8220;dsIT&#8221;); and director
      of Comverge, Inc. (&#8220;Comverge&#8221;)</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Samuel
      M. Zentman</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">59</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
      Member of Audit Committee</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Avi
      Kerbs</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">57</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Elihu
      Levine</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">72</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
      Member of Audit Committee</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shane
      Yurman</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">57</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
      Chairman of Audit Committee</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
      Morgenstern</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">42</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
      President-Operations, Chief Executive Officer and President of
      Databit</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jacob
      Neuwirth</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Executive Officer and President of dsIT</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top align=left width="15%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
      Kaufman</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47</FONT></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="60%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
      President and Chief Financial Officer; and Vice President and Chief
      Financial Officer of dsIT</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>George
Morgenstern</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
our Chairman of the Board since June 1993, and has been our President and Chief
Executive Officer since our incorporation in 1986. Mr. Morgenstern also serves
as Chairman of the Board of dsIT, and as a director of Comverge. Mr. Morgenstern
was the Chairman of the Board of Comverge from October 1997 to April 2003.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Samuel
M. Zentman</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
one of our directors since November 16, 2004. Since 1980 Dr. Zentman has been
the president and chief executive officer of a privately-held textile firm,
where he also served as vice president of finance and administration from 1978
to 1980. From 1973 to 1978, Dr. Zentman served in various capacities at American
Motors Corporation. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Avi
Kerbs</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
one of our directors since December 2002. Since 1991, Mr. Kerbs has been the
Chief Executive Officer and President of Teuza Management and Development 1991
Ltd., a company that manages an Israeli publicly-traded venture capital company.
Mr. Kerbs is a director of Nova Measuring Instruments Ltd.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Elihu
Levine</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
one of our directors and a member of our Audit Committee since April 2003. From
1992 to his retirement in January 1997, Mr. Levine was an officer and employed
in various executive capacities by International Data Operations, Inc., one of
our subsidiaries. Mr. Levine also served as a director of Tower Semiconductor
Ltd. from March 1997 to January 2000.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Shane
Yurman </STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">has been
one of our directors and Chairman of the Audit Committee since April 2003. Mr.
Yurman, a certified public accountant, has been engaged in public accounting
since 1971. Mr. Yurman is a member of the American Institute of Certified Public
Accountants and the New York State Society of Certified Public Accountants where
he previously served as a member of the Auditing Standards and Procedures
Committee. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Shlomie
Morgenstern</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
our Vice President-Operations since February 2000 and was one of our directors
from November 2001 until December 2002. Mr. Morgenstern also serves as President
and Chief Executive Officer of our Databit subsidiary. Since 1996, Mr.
Morgenstern has been employed by us in various administrative capacities. Mr.
Morgenstern is the son of George Morgenstern, our Chairman of the Board,
President and Chief Executive Officer.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-1-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Jacob
Neuwirth</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> has been
Chief Executive Officer and President of dsIT since December 2001. From 1994 to
2001, he was the President and the founder of Endan IT Solutions Ltd., an
Israeli IT solutions provider specializing in billing and healthcare IT
solutions, which was acquired by dsIT in December 2001. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Yacov
Kaufman </STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">has been
our Executive Vice President since December 2001 and our Chief Financial Officer
since February 1996. Mr. Kaufman has also served as a Vice President of dsIT
since 1992 and as Chief Financial Officer of dsIT since 1990, having served as
Controller of dsIT since 1986.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Audit
Committee</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We have
an Audit Committee that was established by our Board of Directors for the
purpose of overseeing our accounting and financial reporting processes and
audits of our financial statements by our independent auditors. The </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">members
of the Audit Committee are Messrs. Yurman (Chairman), Kerbs and Levine.
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each of
the members of the Audit Committee meets the independence and experience
requirements of Marketplace Rule 4350(d)(2) of The Nasdaq Stock Market,
Inc.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Audit
Committee Financial Expert</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our Board
has determined that Mr. Shane Yurman, the Chairman of our Audit Committee, is an
&#8220;audit committee financial expert&#8221; as defined in Item 401(h)(2) of Regulation
S-K. Mr. Yurman is independent in accordance with SEC and Nasdaq listing
standards applicable to our company.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Compliance
with Section 16(a) of the Securities Exchange Act of 1934</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
16(a) of the Securities Exchange Act of 1934 (the &#8220;Exchange Act&#8221;) requires our
executive officers and directors, and persons who own more than 10% of a
registered class of our equity securities to file reports of ownership and
changes in ownership with the SEC. These persons are also required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file. Based
solely on its review of such forms received by us or written representations
from certain reporting persons, except as described below we believe that during
2004 all applicable filing requirements were complied with by its executive
officers and directors.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dr.
Zentman&#8217;s Form 4 disclosing his receipt of options to purchase 7,500 shares of
common stock automatically granted to him on his election as a director on
November 16, 2004 was filed one day late due to delays in obtaining an EDGAR
identification number for Dr. Zentman.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Code
of Ethics</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We have
adopted a code of ethics that applies to our principal executive officer,
principal financial officer, and principal accounting officer or controller,
and/or persons performing similar functions. Our code of ethics is incorporated
by reference as an exhibit to this Annual Report.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-2-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
11.</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U>Executive
and Director Compensation</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Executive
Compensation</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 27pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following table sets forth for the periods indicated information concerning the
compensation of our Chief Executive Officer and the four other officers who
received in excess of $100,000 in salary and bonus during 2004 (the &#8220;named
executive officers&#8221;):</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<DIV>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=bottom align=middle
    width="99%" colSpan=19>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SUMMARY
      COMPENSATION TABLE </STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=middle
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="21%" colSpan=5>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Annual
      Compensation</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="21%" colSpan=5>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long
      Term</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
      Awards</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      Other</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name
      and</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Principal
      Position</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Salary
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bonus
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
      Stock </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Awards
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
      Underlying </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
      (#)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=middle
    width="10%" colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=middle width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=middle width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=middle width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="10%"
    colSpan=2>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">G</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">e</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">orge
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">241,396</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13,712</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">180,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(1)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">101,550</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(2)</SUP></FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Executive Officer</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">464,250</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">177,825</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2002</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">465,700</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">182,860</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
      Kaufman</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">183,839</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13,711</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">75,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(3)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">51,239</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(4)</SUP></FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">182,942</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">49,901</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2002</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">170,297</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37,899</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">258,432</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">181,035</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(5)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">67,450</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(6)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">305,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(7)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21,990</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(8)</SUP></FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
      President</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">210,800</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>--</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14,045</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2002</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">204,345</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>--</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7,440</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="32%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right
    width="9%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jacob
      Neuwirth</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">220,369</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,162</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35,572</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(4)</SUP></FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Executive Officer</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">154,963</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">83,694</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">44,290</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
      President&nbsp;of dsIT</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2002</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">174,512</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="9%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39,788</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="32%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="9%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR></TABLE></DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U></U></STRONG></FONT></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%"></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV>
<HR align=left width="20%" color=#000000 noShade SIZE=1>
</DIV></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      shares of common stock underlying options granted to George Morgenstern,
      and described in the table captioned &#8220;Option SAR Grants in 2004,&#8221; below.
      </FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) $59,888 in contributions to a non-qualified retirement fund, (ii)
      $30,675 in life insurance premiums, (iii) $6,000 in director&#8217;s fees and
      (iv) $4,987 imputed value of automobile fringe
benefits.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      shares of common stock underlying options granted to Yacov Kaufman as
      described below.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      primarily contributions to severance and pension funds and automobile
      fringe benefits. Contributions to severance and pension funds are made on
      substantially the same basis as those made on behalf of Israeli
      executives.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) $110,035 cash bonus earned with respect to 2004 under the terms of
      Shlomie Morgenstern&#8217;s employment agreement and (ii) $71,000 value (at
      $0.71 per share) of 100,000 shares of common stock, which were part of the
      August 2004 stock grant that vested immediately upon grant.
    </FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      the value (at $0.71 per share) of 95,000 shares of common stock granted to
      Mr. Shlomie Morgenstern in August 2004 that did not vest immediately.
      One-third of these shares will vest on each anniversary of the grant,
      </FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
      shares of common stock underlying options granted to Shlomie Morgenstern
      in August 2004 which vest over time as described in the table captioned
      &#8220;Option/SAR Grants in 2004,&#8221; below.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(8)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) $19,231for accrued vacation and (ii) $2,759 imputed value of
      automobile fringe benefits.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right>&nbsp;</TD>
    <TD>&nbsp;</TD></TR></TABLE></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-3-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following tables summarize (i) the options granted in 2004 to the executive
officers named in the Summary Compensation Table above, (ii) the potential value
of these options at the end of the option term assuming certain levels of
appreciation of our common stock, (iii) the number of shares acquired by such
named executive officers upon the exercise of options in 2004 and the value
realized thereon, and (iv) the number and value of all options held by such
executive officers at the end of 2004</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>OPTION/SAR
GRANTS IN 2004</STRONG></FONT></DIV>
<DIV>
<DIV>&nbsp;</DIV>
<DIV align=left>
<DIV>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="18%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=middle
    width="55%" colSpan=12><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Individual
      Grants</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(1)</SUP></FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=middle
    width="80%" colSpan=5><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Potential
      Realizable Value at Assumed Annual Rates of Stock Price
      Appreciation</FONT>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
      Option Terms</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(2)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="92%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
      of Securities Underlying Options</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Granted
      (#)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="105%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%
      of Total Options Granted to Employees in </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
      Year (%)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="111%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Base
      Price </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($/Share)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="123%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
      or </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expiration
      Date</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="135%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5%
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="147%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10%
      ($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="6%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="3%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">George
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">180,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(3)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</FONT></DIV></TD>
    <TD vAlign=bottom width="6%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0.91</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12/31/09</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">42,555</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100,002</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
      Kaufman</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">75,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(4)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</FONT></DIV></TD>
    <TD vAlign=bottom width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0.91</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12/31/09</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18,856</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">41,667</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">305,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(5)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39</FONT></DIV></TD>
    <TD vAlign=bottom width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0.71</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1/1/14</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">124,989</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">345,125</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="6%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="3%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR></TABLE></DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV>
<HR align=left width="20%" color=#000000 noShade SIZE=1>
</DIV></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      did not grant any stock appreciation rights (SARs) in
  2004.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      dollar amounts under these columns are the result of calculations at the
      5% and 10% compounded annual appreciation rates prescribed by the SEC and,
      therefore, are not intended to forecast possible future price
      appreciation, if any, of our common stock.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      options vest as follows: 60,000 on June 30, 2005; 60,000 on December 31,
      2005; and 60,000 on June 30, 2006.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      options vest as follows: 37,500 on December 31, 2005 and 37,500 on
      December 31, 2006.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      options vest as follows: 105,000 on August 18, 2006; 100,000 on February
      18, 2007; and 100,000 on February 18, 2008.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 36pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR></TABLE></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AGGREGATED
OPTION EXERCISES IN 2004</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AND
FISCAL YEAR END STOCK OPTION VALUES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<DIV align=left>
<DIV>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
      of Shares</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="23%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
      of Securities</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="23%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Value
      of Unexercised</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>Acquired Upon</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>Value <FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Realized</FONT></FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="23%" colSpan=4>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>Underlying Unexercised</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="23%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In-the-Money</FONT></DIV></TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="18%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="12%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>Exercise (#)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="12%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=center><FONT size=2>($)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="23%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
      At Year End (#)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="23%" colSpan=4>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
      ($) </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>(1)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="18%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=right
    width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=right
    width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercisable</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unexercisable</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercisable</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 thin solid" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unexercisable</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">George
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">297,250</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">180,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16,200</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
      Kaufman</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">185,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">75,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6,750</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="18%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47,500</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>
      </STRONG></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">305,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">88,450</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="12%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="10%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR></TABLE></DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV>
<HR align=left width="20%" color=#000000 noShade SIZE=1>
</DIV></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 27pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
      on the closing price for our common stock on December 31, 2004 of $1.00
      per share.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Compensation
of Directors</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><STRONG><FONT size=2></FONT></STRONG>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each of
our directors is generally paid $1,000 for each Board or committee meeting which
he attends (except if a committee meeting is held on the same day as a Board
meeting) and is reimbursed for associated out-of-pocket expenses. Mr. Kerbs, Dr.
Zentman and Mr. Levine are each paid $6,000 per annum plus meeting fees in
connection with their service on the Board (and in the case of Mr. Levine and
Dr. Zentman, on the Audit Committee). Mr. Yurman is paid $24,000 per annum plus
meeting fees for his service on the Board and as Chairman of the Audit
Committee. In 2004, Mr. Kerbs was paid a total of $11,000, Mr. Yurman was paid a
total of $39,500, Mr. Levine was paid a total of $12,000, Dr. Zentman was paid a
total of $2,500, and Mr. Morgenstern was paid a total of $6,000 in connection
with their respective service on the Board and the Audit Committee.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-4-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our 1994
Stock Option Plan for Outside Directors provides for awards of non-qualified
options to our directors who is not one of our employees or any of our
affiliates and who meet certain other eligibility criteria. Pursuant to the
plan, (i) upon first election or appointment to the Board of Directors, each
newly elected or appointed eligible director is granted an option to purchase
7,500 shares of our common stock and (ii) immediately following each of our
Annual Meeting of Stockholders, each eligible director will generally be granted
an option to purchase 7,500 shares of our common stock. Options granted under
the plan have an exercise price per share equal to the fair market value of our
common stock on the date of issuance and are exercisable beginning on the first
anniversary of the date of the grant until the earliest of (i) ten years from
the date of grant, (ii) one year from the date on which an optionee ceases to be
an eligible director and (iii) 90 days after the date on which the optionee
ceases to be a director. The maximum number of shares of our common stock in
respect of which awards may be granted under the plan is 400,000, of which
60,000 non-expired options are currently outstanding.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition to the directors&#8217; fees described above, in November 2004, Dr. Zentman
was granted options to purchase 7,500 shares of our common stock at an exercise
price equal to the fair market value of our common stock on the date of grant
(i.e., $0.88 per share). In December 2004, Mr. Yurman, Mr. Levine and Mr. Kerbs
were each granted options to purchase 7,500 shares of our common stock at an
exercise price equal to the fair market value of our common stock on the date of
grant (i.e., $1.15). These options were granted pursuant to our 1994 Stock
Option Plan for Outside Directors described above. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Compensation
Committee Interlocks and Insider Participation</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
matters related to the compensation of executive officers, including the Chief
Executive Officer, are acted upon by the full Board of Directors.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following person served both as a member of our Board of Directors and as an
officer or employee in 2004: George Morgenstern (Chairman of the Board,
President and Chief Executive Officer). During 2004, no member of the Board of
Directors who was also one of our officers participated in any deliberations of
the Board of Directors or any committee thereof relating to his own compensation
or to the compensation of any person to whom he is related. Except as described
above, each member of the Board of Directors participated in 2004 in
deliberations of the Board of Directors concerning executive officer
compensation. During 2004, George Morgenstern engaged in transactions with us in
which he was deemed to have an interest. For further information, see &#8220;Certain
Relationships and Related Transactions&#8221; below.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Employment
Arrangements</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">George
Morgenstern serves as our Chairman of the Board, President and Chief Executive
Officer pursuant to an employment agreement that commenced on January 1, 1997,
was amended in March 2002 to extend through December 31, 2003, and provides for
a period of consultancy thereafter as set forth below (the &#8220;CEO Employment
Agreement&#8221;). Through December 31, 2003, the Employment Agreement provided for a
base salary of $420,000 per annum (which was $470,000 due to cost of living
adjustments as of December 31, 2003), subject to annual review by the Board and
an annual cost of living adjustment, plus contributions to a nonqualified
retirement fund equal to 25% of his base salary. Mr. Morgenstern&#8217;s compensation
pursuant to the Employment Agreement also includes the use of two company
automobiles, premium payments on a life insurance policy owned by Mr.
Morgenstern and other fringe benefits.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the terms of the CEO Employment Agreement, on December 31, 2003, Mr.
Morgenstern elected to terminate his employment with us and thereafter to
continue to serve us as a consultant for a period (the &#8220;Consulting Period&#8221;)
ending on December 31, 2010. At the request of the Board, Mr. Morgenstern has
continued on as our Chairman of the Board, President and Chief Executive
Officer. During the Consulting Period, Mr. Morgenstern receives an annual
consulting fee plus contributions to a nonqualified retirement fund and fringe
benefits on the same basis as during the term of his employment as described
above. Mr. Morgenstern&#8217;s annual consulting fee during the Consulting Period is
equal to 50% of his annual salary in effect immediately prior to the Consulting
Period through the end of the fourth full calendar year of the Consulting
Period, and 25% of such annual salary for the remainder of the Consulting Period
(subject in all cases to an annual cost of living adjustment). On December 30,
2004, in recognition of his continued service, and to provide additional
incentive for such continued service at the pleasure of the Board, the Board of
Directors agreed to extend the consulting period by one year. Under the CEO
Employment Agreement as so amended, Mr. Morgenstern would continue to serve as a
consultant until the end of 2011, and would receive a consulting fee (plus
certain other benefits) through the end of 2008 at a rate equal to 50% of that
which he received during 2003 (his last year of employment) and at 25% of such
base rate for the last three years of the consulting period. At the time of the
December 2004 amendments, we granted to Mr. Morgenstern options to purchase
180,000 shares of common stock which vested over the 18 months from the date of
the grant, subject to his continuing to serve as CEO at the pleasure of the
Board.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-5-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under the
terms of the CEO Employment Agreement, the Company agrees to take appropriate
action to fund the payment of all consulting fees to become payable to Mr.
Morgenstern throughout the entire Consulting Period, by purchase of an annuity
from a reputable insurance company, deposit of funds or U.S. Treasury Securities
having maturities of less than one year in a bank acceptable to Mr. Morgenstern,
or other arrangements acceptable to Mr. Morgenstern. Mr. Morgenstern has agreed
to waive this obligation, except in the event of (i) his death or disability,
(ii) the Company entering into a definitive agreement(s) concerning a
transaction or series of transactions, the consummation of which will result in
the receipt by the Company of gross proceeds equal to or in excess of $1 million
or (iii) his termination as Chief Executive Officer of the Company for any
reason other than his voluntary resignation. Upon the occurrence of any of these
events, the Company would be obligated to fund all consulting fees as provided
in the CEO Employment Agreement. During the term of the CEO Employment Agreement
(including any Consulting Period), Mr. Morgenstern may not engage in a business
that is in substantial and direct competition with our business or the business
of any of our subsidiaries.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
Morgenstern serves as the Chief Executive Officer and President of our Databit
Inc. subsidiary and as our Vice President-Operations and, pursuant to an
employment agreement that was executed on August 19, 2004 and commenced as of
January 1, 2004 (the &#8220;SM Employment Agreement&#8221;). The SM Employment Agreement
provides for a four year initial term and subsequent one year renewal terms
(unless either party gives notice of non-renewal within 90 days prior to the end
of the initial term or a renewal term). Under the SM Employment Agreement, Mr.
Morgenstern receives a base salary of $250,000 per annum. Mr. Morgenstern&#8217;s
compensation pursuant to the SM Employment Agreement also includes a car
allowance and participation in fringe benefits maintained and sponsored by DSSI
and Databit. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the SM Employment Agreement, Mr. Morgenstern is entitled to an annual bonus
equal to 20% of the gross profit of Databit in excess of $2.8 million. The bonus
is capped at 50% of his base salary then in effect if Databit has net income for
the calendar year to which the bonus relates (36% of his base salary if Databit
does not have net income for the calendar year to which the bonus relates).
Under the SM Employment Agreement, on August 19, 2004, Mr. Morgenstern also
received stock options exercisable for the purchase of 305,000 shares of our
Common Stock at exercise price of $0.71 per share (the closing market price on
the date of grant) and a restricted stock grant of 195,000 shares of our Common
Stock. The stock option grant vests in installments of 105,000, 100,000 and
100,000 shares on August 18, 2006, February 18, 2007 and February 18, 2008,
respectively, and the restricted stock grant vests in installments of 100,000
upon issuance and 31,666, 31,667 and 31,667 shares on August 18, 2006, 2007 and
2008, respectively. The options and the restricted stock will fully vest if the
SM Employment Agreement, or if Mr. Morgenstern terminates his employment within
one year after a change in control or 10 days after notice to us of our breach
of a material provision of the SM Employment Agreement which breach remains
uncured.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If the SM
Employment Agreement is not renewed after the initial term or any renewal term,
Mr. Shlomie Morgenstern will be entitled to receive a lump sum payment equal to
one year&#8217;s salary and the bonus he would have earned for the calendar year in
which the non-renewal occurred (in a lump sum payment). If Mr. Morgenstern&#8217;s
employment is terminated by us other than for cause, Mr. Morgenstern terminates
his employment within one year after a change in control or after we breach a
material provision of the SM Employment Agreement and fail to cure that breach
in a timely matter, then Mr. Morgenstern will be entitled to 2.9 times both his
annual salary then in effect and the average bonus paid to Mr. Morgenstern
during the three preceding years (or such shorter period if the termination
occurred before the third year).</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-6-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
Kaufman serves as Vice President and Chief Financial Officer of the Company and
as Executive Vice President and Chief Financial Officer of dsIT pursuant to an
employment agreement entered into with the Company on January 1, 1999, and
amended in 2002, providing for a salary of $200,000. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We make
certain payments to fund in part our future severance obligations to Mr.
Kaufman. If Mr. Kaufman&#8217;s employment is voluntarily terminated or is terminated
by us for reasons other than for cause, we must pay him an amount equal to 150%
of his last month's salary multiplied by the number of years (including partial
years) that Mr. Kaufman worked for us. This severance obligation, which is
customary for executives of Israeli companies, would be reduced by the amount
contributed by us to certain Israeli pension and severance funds pursuant to Mr.
Kaufman&#8217;s employment agreement. In addition, the agreement with Mr. Kaufman
provides for an additional payment equal to six times his last month&#8217;s total
compensation, payable at the end of his employment with us, unless he is
terminated by us for cause. As of December 31, 2004, the unfunded portion of
these payments was $162,000.&nbsp;In December 2004 we granted&nbsp;&nbsp;Mr.
Kaufman&nbsp;options to purchase 75,000 shares of common stock which vest over
the two years from the date of the grant.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The stock
option agreements with our executive officers generally provide for accelerated
vesting in the event we have a change in control.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jacob
Neuwirth serves as President and Chief Executive Officer of dsIT pursuant to an
employment agreement that commenced on December 16, 2001. Mr. Neuwirth&#8217;s
employment agreement provides for a base salary which is denominated in linked
NIS equivalent to $195,000 </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">per
annum, linked to the Israeli Consumer Price Index (&#8220;Index&#8221;). Mr. Neuwirth&#8217;s
agreement provides for an increase in salary, provided dsIT achieves certain
performance targets. In addition to his base salary, Mr. Neuwirth receives 5% of
dsIT&#8217;s net profit before tax. In addition, the agreement with Mr. Neuwirth
provides for six months advance notice of termination of employment by either
side, and an additional payment equal to six times his last month&#8217;s total
compensation, payable upon any termination of his employment. As of December 31,
2004, the unfunded portion of these payments was $181,000. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under his
employment agreement, Mr. Neuwirth is entitled to a loan of up to $100,000 from
dsIT. As of December 31, 2003 the loan balance which is denominated in linked
NIS, bears interest at 4% and has no fixed maturity date plus accumulated
interest, had an outstanding balance of $112,000.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-7-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
12. <U>Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following table and the notes thereto set forth information, as of April 26,
2004 (except as otherwise noted), concerning beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of our common stock by (i)
each of our directors, (ii) each of the &#8220;named executive officers,&#8221; (iii) all of
our executive officers and directors as a group, and (iv) each holder of 5% or
more of our outstanding common stock:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=center>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="87%">
  <TR>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name
      and Address of</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beneficial
      Owner</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(1)(2)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="12%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
      of Shares of </FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
      Stock</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beneficially
      Owned</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(2)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="12%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Percentage
      of</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
      Stock</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(2)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">George
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">386,804</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(3)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.6</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Howard
      A. Gutzmer</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">
      <DIV style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5550
      Oberlin Drive </FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">San
      Diego, CA 92121</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 12.6pt">&nbsp;</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">676,291</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(4)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.6</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=bottom align=left width="51%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dimensional
      Fund Advisors Inc.</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD vAlign=bottom align=left width="51%">
      <DIV style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1299
      Ocean Avenue</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Santa
      Monica, CA 90401</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">402,200</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(5)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.0</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Avi
      Kerbs</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(6)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Elihu
      Levine</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58,470</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(7)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.0</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shane
      Yurman</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">
      <DIV style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">127
      Route 59</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Monsey,
      NY 10952</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8,500</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(8)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Samuel
      Zentman</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shlomie
      Morgenstern</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">243,500</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(9)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.0</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yacov
      Kaufman</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">185,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(6)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.2</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jacob
      Neuwirth</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">57,870</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=top align=left width="2%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>(10)</SUP></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      executive officers and directors of the Company as a group (8
      people)</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">955,144</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      id=TAB1 style="MARGIN-LEFT: 0px"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.0</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      id=TAB1 style="MARGIN-LEFT: 0px"></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt"
size=2><STRONG></STRONG></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>
<DIV>
<HR align=left width="20%" color=#000000 noShade SIZE=1>
</DIV></DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Denotes
      less than 1% of the issued and outstanding common
stock.</FONT></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
      otherwise indicated, business address is in care of the
      Company.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
      otherwise indicated, each person has sole investment and voting power with
      respect to the shares indicated. For purposes of this table, a person or
      group of persons is deemed to have &#8220;beneficial ownership&#8221; of any shares as
      of a given date which such person has the right to acquire within 60 days
      after such date. Percentage information is based on 8,116,691 shares,
      which is the number of shares outstanding as of April 20,
      2005.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) 40,115 shares held by Mr. Morgenstern, including 20,000 shares
      received by Mr. Morgenstern pursuant to a restricted stock grant which are
      not yet fully vested, (ii) 297,250 currently exercisable options held by
      Mr. Morgenstern, and (iii) 49,439 shares owned by Mr. Morgenstern&#8217;s
      wife.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of December 31, 2004, based on information in Amendment No. 2 to Schedule
      13G filed on January 27, 2003. Consists of (i) 60,340 shares owned by Mr.
      Gutzmer (including shares held in his IRA), (ii) 508,125 shares owned by
      the Gutzmer Family Trust, of which Mr. Gutzmer is a co-trustee, (iv)
      64,950 shares held in an IRA of Mr. Gutzmer&#8217;s wife, (v) 37,576 shares
      owned by a corporation of which Mr. Gutzmer is an executive officer,
      director and principal shareholder, and (vi) 5,300 shares owned by a
      limited partnership, the corporate general partner of which Mr. Gutzmer is
      the sole director.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<TABLE id=hangingindent cellSpacing=0 cellPadding=0 width="100%" align=center
border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</FONT></DIV></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of December 31, 2004, based on information in an amendment to Schedule 13G
      filed on February 9, 2005. The securities are owned by four investment
      company funds to which Dimensional Fund Advisors Inc. (&#8220;Dimensional&#8221;)
      furnishes investment advice and/or serves as investment manager. In its
      role as investment advisor or manager, Dimensional possesses voting and/or
      investment power over the securities. Dimensional disclaims beneficial
      ownership of these securities.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of currently exercisable options.</FONT></TD></TR></TABLE></DIV></DIV>
<DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) 40,000 shares owned by Mr. Levine and his wife in a joint account,
      (ii) 1,180 shares held in an IRA of Mr. Levine, (iii) 8,000 shares owned
      by Mr. Levine&#8217;s wife, (iv) 1,790 shares held in an IRA of Mr. Levine&#8217;s
      wife and (v) 7,500 currently exercisable options held by Mr.
    Levine.</FONT></TD></TR></TABLE></DIV></DIV>
<DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(8)</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) 1,000 shares owned by Mr. Yurman and (ii) 7,500 currently
      exercisable options held by Mr. Yurman.</FONT></TD></TR></TABLE></DIV></DIV>
<DIV>
<DIV>
<TABLE id=hangingindent
style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" cellSpacing=0
cellPadding=0 width="100%" align=center border=0>
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(9)</FONT></TD>
    <TD align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of (i) 196,000 shares, which includes 195,000 shares received as a
      restricted stock grant of which 95,000 shares are subject to vesting, and
      (ii) 47,500 currently exercisable options.</FONT></TD></TR></TABLE></DIV></DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 18pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(10)&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
      of 57,870 shares held by an entity controlled by Mr.
    Neuwirth.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-8-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV>
<DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
13. </STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U>Certain
Relationships and Related Transactions</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
2004, we paid approximately $479,000 for legal services rendered and
reimbursement of out-of-pocket expenses to Eilenberg &amp; Krause LLP, a law
firm in which Sheldon Krause, a former director and our Secretary and General
Counsel, is a member. Such fees related to services rendered by Mr. Krause and
other members and employees of his firm, as well as certain special and local
counsel retained and supervised by his firm who performed services on our
behalf. Mr. Krause is the son-in-law of George Morgenstern, our Chairman,
President and Chief Executive Officer.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
reported on the Summary Compensation Table above, Shlomie Morgenstern, the son
of George Morgenstern, our Chairman, President and Chief Executive Officer,
received compensation during 2004 in connection with his position as Vice
President-Operations.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
January 2000, Comverge extended loans of $9,925 each evidenced by a promissory
note to both our Chief Executive Officer and Chief Financial Officer to finance
the purchase of Comverge common stock. The loans had an initial maturity date of
January 3, 2002 and were extended at that time to mature on January 3, 2004. The
loans bear interest at 4.25% per annum, payable at maturity. In April 2004, the
Board approved a bonus to each of the Chief Executive Officer and Chief
Financial Officer in the amount of $13,712. In April 2004, the loans were paid
off in full by the Chief Executive Officer and Chief Financial
Officer.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">dsIT&#8217;s
Chief Executive Officer has a loan outstanding from dsIT based on a contract
from 2001. The loan balance and accrued interest at December 31, 2004 was
$112,000. The loan has no defined maturity date, is denominated in NIS, is
linked to the Israeli Consumer Price Index and bears interest at 4%.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
14. <U>Principal Accounting Fees and Services</U> </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Accounting
Fees </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Aggregate
fees billed by our principal accountant during the last two fiscal years are as
follows:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=center>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="87%">
  <TR>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="51%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="12%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=middle
    width="12%" colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit
      Fees</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">146,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">143,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audit-
      Related Fees</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tax
      Fees</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      Fees</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">--</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
    width="51%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=left
      width="1%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">211,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
      width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=left
      width="1%"><DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=right
    width="11%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">194,000</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=bottom align=left width="51%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Audit
Fees</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> were for
professional services rendered for the audits of the consolidated financial
statements of the Company, statutory and subsidiary audits, assistance with
review of documents filed with the SEC, consents, and other assistance required
to be performed by our independent accountants.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Audit
Related Fees</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> were for
assurance and related services, internal control reviews and attestation
services.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Tax
Fees</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> were for
services related to tax compliance, tax planning and tax advice for our dsIT
subsidiary.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Other
Fees </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">were for
services related to a strategic acquisition that was not
consummated.</FONT></DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Audit
Committee Pre-Approval Policies and Procedures</STRONG></FONT></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Audit
Committee&#8217;s current policy is to pre-approve all audit and non-audit services
that are to be performed and fees to be charged by our independent auditor to
assure that the provision of these services does not impair the independence of
the auditor. The Audit Committee was in compliance with the requirements of the
Sarbanes-Oxley Act of 2002 regarding the pre-approval of all audit and non-audit
services and fees by the mandated effective date of May 6, 2003.</FONT></DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-9-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>PART
IV</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(a)(1)</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>
List of Financial Statements of the Registrant</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Report of
Kesselman and Kesselman</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Report of
KPMG LLP</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Balance Sheets as of December 31, 2003 and 2004</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statements of Operations for the years ended December 31, 2002, 2003 and
2004</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statements of Changes in Shareholders&#8217; Equity for the years ended December 31,
2002, </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2003 and
2004</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statements of Cash Flows for the years ended December 31, 2002, 2003 and
2004</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes to
Consolidated Financial Statements</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(a)(2)
List of Financial Statement Schedules</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Separate
Financial Statements of 50 Percent or Less Owned Persons: </U></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Financial Statements of Comverge, Inc.:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Report of
PricewaterhouseCoopers LLP</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Balance Sheets as of December 31, 2004 and 2003</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statements of Operations for the years ended December 31, 2004 and
2003</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statement of Changes in Shareholders&#8217; Equity for the years ended December 31,
2004 </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
2003</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
Statements of Cash Flows for the years ended December 31, 2004 and
2003</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -18pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes to
Consolidated Financial Statements</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(a)(3)
List of Exhibits </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT size=2>Except as noted, all exhibits not incorporated by
reference were filed with the Registrant's Annual Report on Form 10-K as
originally filed on April 14, 2005.</FONT><BR></DIV>
<DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>No.
      </U></FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="90%">&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      of Incorporation of the Registrant, with amendments thereto (incorporated
      herein by reference to Exhibit 3.1 to the Registrant&#8217;s Registration
      Statement on Form S-1 (File No. 33-70482) (the &#8220;1993 Registration
      Statement&#8221;)).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By-laws
      of the Registrant (incorporated herein by reference to Exhibit 3.2 to the
      Registrant&#8217;s Registration Statement on Form S-1 (File No. 33-44027) (the
      &#8220;1992 Registration Statement&#8221;)).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.3</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendments
      to the By-laws of the Registrant adopted December 27, 1994 (incorporated
      herein by reference to Exhibit 3.3 of the Registrant&#8217;s Current Report on
      Form 8-K dated January 10, 1995).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Specimen
      certificate for the Common Stock (incorporated herein by reference to
      Exhibit 4.2 to the 1992 Registration Statement).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
      to Purchase Common Stock of the Registrant, dated October 12, 1999
      (incorporated herein by reference to Exhibit 4.4 to the Registrant&#8217;s
      Annual Report on Form 10-K for the year ended December 31, 2000 (the &#8220;2000
      10-K&#8221;)).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
      Purchase Agreement, dated as of June 11, 2002, by and among the
      Registrant, Databit, Inc. and Laurus Master Fund, Ltd. (&#8220;Laurus&#8221;)
      (including the forms of convertible note and warrant) (incorporated herein
      by reference to Exhibit 10.1 to the Registrant&#8217;s Current Report on Form
      8-K dated June 11, 2002).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.4</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
      and Security Agreement, dated as of December 4, 2002, made by and between
      Comverge (&#8220;Comverge&#8221;) and Laurus (incorporated herein by reference to
      Exhibit 10.1 to the Registrant&#8217;s Current Report on Form 8-K dated December
      5, 2002 (the &#8220;December 2002 8-K&#8221;)).</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt"
face="Times New Roman">-10-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.5</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Convertible
      Note, dated December 4, 2002, made by and among Comverge, Laurus and, as
      to Articles III and V only, the Registrant (incorporated herein by
      reference to Exhibit 10.2 to the December 2002 8-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.6</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
      Stock Purchase Warrant, dated December 5, 2002, issued by the Registrant
      to Laurus (incorporated herein by reference to Exhibit 10.3 to the
      December 2002 8-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.7</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
      Rights Agreement, dated as of December 4, 2002, by and between the
      Registrant and Laurus (incorporated herein by reference to Exhibit 10.4 to
      the December 2002 8-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
      Agreement between the Registrant and George Morgenstern, dated as of
      January 1, 1997 (incorporated herein by reference to Exhibit 10.1 to the
      Registrant&#8217;s Annual Report on Form 10-K for the year ended December 31,
      1997 (the &#8220;1997 10-K&#8221;)).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
      Agreement between the Registrant and Yacov Kaufman, dated as of January 1,
      1999 (incorporated herein by reference to Exhibit 10.22 of the Registrants
      Annual Report on Form 10-K for the year ended December 31, 1999 (the &#8220;1999
      10-K&#8221;)).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1991
      Stock Option Plan (incorporated herein by reference to Exhibit 10.4 to the
      1992 Registration Statement).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1994
      Stock Incentive Plan, as amended.* </FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1994
      Stock Option Plan for Outside Directors, as amended (incorporated herein
      by reference to Exhibit 10.5 to the Registrant&#8217;s Form 10-K for the year
      ended December 31, 1995 (the &#8220;1995 10-K&#8221;)).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.6</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1995
      Stock Option Plan for Non-management Employees, as amended.
    </FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.7</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement
      dated January 26, 2002, between the Registrant and Bounty Investors LLC
      (incorporated herein by reference to Exhibit 10.12 to the 2000
      10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.8</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease
      Agreement, dated February 5, 2002, between Duke-Weeks Realty Limited
      Partnership and Comverge, (incorporated herein by reference to Exhibit
      10.13 to the 2000 10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.9</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
      Option Agreements, dated as of October 1, 1999, between Powercom Control
      Systems Ltd. and George Morgernstern, Yacov Kaufman and Harvey E.
      Eisenberg (and related promissory notes) (incorporated herein by reference
      to Exhibit 10.14 to the 2000 10-K).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.10</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Share
      Purchase Agreement, dated as of November 29, 2001, by and among the
      Registrant, Decision Systems Israel Ltd., Endan IT Solutions Ltd., Kardan
      Communications Ltd., Neuwirth Inves</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">tm</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ents
      Ltd., Jacob Neuwirth (Noy) and Adv. Yossi Avraham, as Trustee for Meir
      Givon (incorporated </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">herein
      </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
      reference to Exhibit 10.1 to the Registrant&#8217;s Current Report on Form 8-K
      dated December 13, 2001).</FONT></DIV></TD></TR></TABLE></DIV></DIV>
<DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%"></TABLE></DIV>
<DIV style="LINE-HEIGHT: 0">&nbsp;</DIV>
<DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.11</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
      Rights Agreement, dated as of December 13, 2002, by and among the
      Registrant, Kardan Communications Ltd. and Adv. Yossi Avraham, as Trustee
      for Meir Givon (incorporated herein by reference to Exhibit 10.2 to the
      Registrant&#8217;s Current Report on Form 8-K dated December 13,
      2002).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.12</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
      Agreement, dated as of September 1, 2002, by and between Comverge and
      Robert M. Chiste (</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporated
      herein by reference to Exhibit 10.1 to the Registrant&#8217;s Quarterly Report
      on Form 10-Q for the quarter ended September 30,
2002).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.13</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
      Stock Purchase Agreement, dated as of September 1, 2002, by and between
      the Registrant and Robert M. Chiste (</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporated
      herein by reference to Exhibit 10.2 to the Registrant&#8217;s Quarterly Report
      on Form 10-Q for the quarter ended September 30,
2002).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.14</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Option
      Agreement, dated as of September 1, 2002, by and between Comverge and
      Robert M. Chiste (</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporated
      herein by reference to Exhibit 10.3 to the Registrant&#8217;s Quarterly Report
      on Form 10-Q for the quarter ended September 30,
2002).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.15</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contract
      for Asset Management Services between the Registrant and Malley Associates
      Capital Management, Inc. (incorporated herein by reference to Exhibit 10.1
      to the Registrant&#8217;s Quarterly Report on Form 10-Q for the quarter ended
      March 31, 2002).</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt"
face="Times New Roman">-11-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.16</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
      Agreement dated as of March 30, 2002 between Comverge and Joseph D.
      Esteves (</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporated
      herein by reference to Exhibit 10.1 to the Registrant&#8217;s Quarterly Report
      on Form 10-Q for the quarter ended June 30, 2002).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.17</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement,
      dated as of January 31, 2002, between Comverge and Bank Leumi USA
      (incorporated herein by reference to Exhibit 10.21 to the Registrant&#8217;s
      Annual Report on Form 10-K for the year ended December 31, 2001 (the &#8220;2001
      10-K&#8221;).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.18</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6,000,000
      Term Note of Comverge dated as of January 31, 2002, payable to Bank Leumi
      USA </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(incorporated
      herein by reference to Exhibit 10.22 to the 2001 10-K)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      </FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.19</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
      Amendment to Employment Agreement, dated as of May 17, 2002, by and
      between the Registrant and George Morgenstern </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(incorporated
      herein by reference to Exhibit 10.23 to the 2001 10-K)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.20</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement,
      dated as of January 31, 2003, between Comverge and Bank Leumi USA
      (including form of $6,000,000 Term Note </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
      Comverge dated as of January 31, 2003, payable to Bank Leumi
      USA)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      (incorporated herein by reference to Exhibit 10.24 to the Registrant&#8217;s
      Annual Report on Form 10-K for the year ended December 31, 2002 (the &#8220;2002
      10-K&#8221;)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.21</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement,
      dated as of February 25, 2003, between the Registrant and J.P. Turner
      &amp; Company, L.L.C. (incorporated herein by reference to Exhibit 10.25
      to the 2002 10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.22</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
      Amendment to Employment Agreement, dated as of March 12, 2002, between the
      Registrant and George Morgenstern (incorporated herein by reference to
      Exhibit 10.1 to the Registrant&#8217;s Quarterly Report on Form 10-Q for the
      quarter ended March 31, 2002).*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.23</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendment
      to Employment Agreement, dated as of June 1, 2002, between the Registrant
      and Yacov Kaufman (incorporated herein by reference to Exhibit 10.1 to the
      Registrant&#8217;s Quarterly Report on Form 10-Q for the quarter ended September
      30, 2002).*</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.24</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Guaranty,
      dated December 4, 2002, made by the Registrant in favor of Laurus
      (incorporated herein by reference to Exhibit 10.5 to the </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">December
      2002 8-K</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.25</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
      Stock Purchase Agreement, dated as of April 7, 2003, by and among
      Comverge, the Registrant and the other investors named therein
      (incorporated herein by reference to Exhibit 10.29 to the 2002
      10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.26</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investors&#8217;
      Rights Agreement, dated as of April 7, 2003, by and among Comverge, the
      Registrant and the investors and Comverge management named therein
      (incorporated herein by reference to Exhibit 10.30 to the 2002
      10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.27</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Co-Sale
      and First Refusal Agreement, dated as of April 7, 2003, by and among
      Comverge, the Registrant and the investors and stockholders named therein
      (incorporated herein by reference to Exhibit 10.31 to the 2002
      10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.28</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Voting
      Agreement, dated as of April 7, 2003, by and among Comverge, the
      Registrant and the other investors named therein (incorporated herein by
      reference to Exhibit 10.32 to the 2002 10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.29</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
      Agreement, dated as of April 1, 2003, by and between the Registrant and
      Laurus (incorporated herein by reference to Exhibit 10.33 to the 2002
      10-K).</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.30</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
      Agreement dated as of August 19, 2004 and effective as of January 1,
      2004</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> by
      and between the Registrant and Shlomie Morgenstern </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(incorporated
      herein by reference to Exhibit 10.1 to the Registrant&#8217;s Quarterly Report
      on Form 10-Q for the quarter ended September 30, 2004)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.31</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
      Stock Award Agreement dated as of August 19, 2004, by and between the
      Registrant and Shlomie Morgenstern (incorporated herein by reference to
      Exhibit 10.2 to the Registrant&#8217;s Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2004)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.32</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
      Option Agreement dated as of August 19, 2004, by and between Shlomie
      Morgenstern and the Registrant (incorporated herein by reference to
      Exhibit 10.3 to the Registrant&#8217;s Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2004)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.*</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt"
face="Times New Roman">-12-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><BR>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.33</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
      Amended and Restated Co-Sale And First Refusal Agreement dated as of
      October 26, 2004, by and among Comverge, Inc., the Registrant and other
      persons party thereto (incorporated herein by reference to Exhibit 10.4 to
      the Registrant&#8217;s Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2004)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.34</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Third
      Amendment to Employment Agreement, dated as of December 30, 2004, between
      the Registrant and George Morgenstern.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.35</FONT></DIV></TD>
    <TD width="2%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=right>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Stock Option Agreement to employees under the 1994 Stock Incentive
      Plan.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.36</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Stock Option Agreement under the 1994 Stock Option Plan for Outside
      Directors.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.37</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Stock Option Agreement under the 1995 Stock Option Plan for
      Nonmanagement Employees. </FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.38</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
      Option Agreement dated as of December 30, 2004 by and between George
      Morgenstern and the Registrant.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.39</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
      Option Agreement dated as of December 30, 2004 by and between Yacov
      Kaufman and the Registrant.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.40</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
      Option Agreement dated as of December 30, 2004 by and between Sheldon
      Krause and the Registrant.*</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.1</FONT></DIV></TD>
    <TD width="2%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=right>&nbsp;</DIV></TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Code
      of Ethics of the Registrant </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(incorporated
      herein by reference to Exhibit 14.1 to the Registrant&#8217;s Annual Report on
      Form 10-K for the year ended December 31, 2003)</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">List
      of subsidiaries.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consent
      of KPMG LLP.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consent
      of Kesselman &amp; Kesselman CPA.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.3</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consent
      of </FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PricewaterhouseCoopers
      LLP.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><SUP>#</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><SUP>#</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><SUP>#</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.1</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=right width="8%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><SUP>#</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.2</FONT></DIV></TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=top align=left width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________</FONT></DIV></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</FONT></DIV></TD>
    <TD vAlign=top width="69%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      exhibit includes a management contract, compensatory plan or arrangement
      in which one or more directors or executive officers of the Registrant
      participate. </FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top width="5%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>#</SUP></FONT></DIV></TD>
    <TD vAlign=top width="69%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Exhibit is filed or furnished herewith.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt"
face="Times New Roman">-13-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV>&nbsp;</DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SIGNATURE</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the Township of Mahwah, State
of New Jersey, on May 2, 2005.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT size=2></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center bgColor=#ffffff
border=0>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="50%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="49%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD colSpan=2><FONT face="Times New Roman" size=2><STRONG>DATA SYSTEMS
      &amp; SOFTWARE, INC.</STRONG></FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD><FONT face="Times New Roman" size=2>&nbsp;<BR>&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>&nbsp;<BR>&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>&nbsp;<BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD><FONT face="Times New Roman" size=2></FONT></TD>
    <TD><FONT face="Times New Roman" size=2>By:&nbsp;&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>/s/&nbsp;George
    Morgenstern</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=1>&nbsp;</FONT></TD>
    <TD align=left>
      <HR align=left width="80%" color=#000000 noShade SIZE=2>
    </TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD>
      <DIV><FONT face="Times New Roman" size=2>George Morgenstern,</FONT></DIV>
      <DIV><FONT size=2>Chief Executive Officer and
President</FONT></DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman">-14-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV></DIV></BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>v017274_ex31-1.htm
<TEXT>
<HTML><HEAD>
<TITLE>
</TITLE>
</HEAD><BODY id=38 bgColor=#ffffff>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
31.1</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I, George
Morgenstern, the Chief Executive Officer of Data Systems &amp; Software
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inc.,
certify that:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>1.</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT></TD>
    <TD vAlign=top width="95%"><FONT size=2>I have reviewed this annual
      report, as amended by Amendment No. 1 thereto on Form 10K/A, of Data
      Systems &amp; Software Inc.;</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>2.</FONT></TD>
    <TD vAlign=top width="95%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
      on my knowledge, this report does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements made, in light of the circumstances under which such statements
      were made, not misleading with respect to the period covered by this
      report;</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>3.</FONT></TD>
    <TD vAlign=top width="95%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
      on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the
      financial condition, results of operations and cash flows of the
      registrant as of, and for, the periods presented in this
      report;</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>4.</FONT></TD>
    <TD vAlign=top width="95%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      registrant's other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and have:</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(a) </FONT></TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(b)</FONT></TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[Paragraph
      omitted in accordance with SEC transition instructions contained in SEC
      Release 34-47986];</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(c)</FONT></TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Evaluated
      the effectiveness of the registrant&#8217;s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures, as of the end of the period
      covered by this report based on such evaluation; and</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(d)</FONT></TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Disclosed
      in this report any change in the registrant&#8217;s internal control over
      financial reporting that occurred during the registrant's most recent
      fiscal quarter (the registrant&#8217;s fourth fiscal quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant&#8217;s internal control over financial
      reporting; and</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>5.</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT></TD>
    <TD vAlign=top width="95%">
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><FONT
      size=2>The registrant's other certifying officer(s) and I have disclosed,
      based on our most recent evaluation of internal control over financial
      reporting, to the registrant's auditors and the audit committee of the
      registrant's board of directors (or persons performing the equivalent
      functions):</FONT></DIV></TD></TR></TABLE></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt"></FONT>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(a) </FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>All significant deficiencies and
      material weaknesses in the design or operation of internal control over
      financial reporting which are reasonably likely to adversely affect the
      registrant&#8217;s ability to record, process, summarize and report financial
      information; and</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(b)</FONT></TD>
    <TD width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant&#8217;s internal control
      over financial reporting.
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><BR></DIV></FONT></DIV></TD></TR></TABLE></DIV></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center bgColor=#ffffff
border=0>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT size=2>Dated: May 2, 2005 </FONT></TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT face="Times New Roman" size=2>/s/&nbsp;George
      Morgenstern</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT face="Times New Roman" size=2></FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD align=left width="40%">
      <HR align=left width="80%" color=#000000 noShade SIZE=2>
    </TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD align=left width="40%"></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT face="Times New Roman" size=2>George Morgenstern
      <BR>Chief Executive Officer</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2></FONT></TD></TR></TABLE></DIV></FONT></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>v017274_ex31-2.htm
<TEXT>
<HTML><HEAD>
<TITLE>
</TITLE>
</HEAD><BODY id=38 bgColor=#ffffff>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><BR>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
31.2</FONT></DIV></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I, Yacov
Kaufman, the Chief Financial Officer of Data Systems &amp; Software Inc.,
certify that:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify></FONT>&nbsp;</DIV></DIV>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>1.</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT></TD>
    <TD vAlign=top width="95%"><FONT size=2><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
      have reviewed this annual report</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      as amended by Amendment No. 1 thereto on Form 10K/A,</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> of
      Data Systems &amp; Software Inc.;</FONT></FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>2.</FONT></TD>
    <TD vAlign=top width="95%"><FONT size=2>Based on my knowledge, this report
      does not contain any untrue statement of a material fact or omit to state
      a material fact necessary to make the statements made, in light of the
      circumstances under which such statements were made, not misleading with
      respect to the period covered by this report;</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>3.</FONT></TD>
    <TD vAlign=top width="95%"><FONT size=2>Based on my knowledge, the
      financial statements, and other financial information included in this
      report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"></TD>
    <TD vAlign=top width="95%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>4.</FONT></TD>
    <TD vAlign=top width="95%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      registrant's other certifying officer(s) and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and have:</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(a) </FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>Designed such disclosure controls
      and procedures, or caused such disclosure controls and procedures to be
      designed under our supervision, to ensure that material information
      relating to the registrant, including its consolidated subsidiaries, is
      made known to us by others within those entities, particularly during the
      period in which this report is being prepared;</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(b)</FONT></TD>
    <TD vAlign=top width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[Paragraph
      omitted in accordance with SEC transition instructions contained in SEC
      Release 34-47986];</FONT></DIV></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(c)</FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>Evaluated the effectiveness of the
      registrant&#8217;s disclosure controls and procedures and presented in this
      report our conclusions about the effectiveness of the disclosure controls
      and procedures, as of the end of the period covered by this report based
      on such evaluation; and</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(d)</FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>Disclosed in this report any
      change in the registrant&#8217;s internal control over financial reporting that
      occurred during the registrant's most recent fiscal quarter (the
      registrant&#8217;s fourth fiscal quarter in the case of an annual report) that
      has materially affected, or is reasonably likely to materially affect, the
      registrant&#8217;s internal control over financial reporting;
and</FONT></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%"><FONT size=2>5.</FONT><FONT id=TAB2
      style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT></TD>
    <TD vAlign=top width="95%"><FONT size=2>The registrant's other certifying
      officer(s) and I have disclosed, based on our most recent evaluation of
      internal control over financial reporting, to the registrant's auditors
      and the audit committee of the registrant's board of directors (or persons
      performing the equivalent functions):</FONT></TD></TR></TABLE></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt"></FONT>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(a) </FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>All significant deficiencies and
      material weaknesses in the design or operation of internal control over
      financial reporting which are reasonably likely to adversely affect the
      registrant&#8217;s ability to record, process, summarize and report financial
      information; and</FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(b)</FONT></TD>
    <TD width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>Any fraud, whether or not material, that involves management
      or other employees who have a significant role in the registrant&#8217;s
      internal control over financial
reporting.</DIV></FONT></DIV></TD></TR></TABLE></DIV></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center bgColor=#ffffff
border=0>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT size=2>Dated: May 2, 2005 </FONT></TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%"><FONT face="Times New Roman" size=2>/s/&nbsp;Yacov
      Kaufman</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT face="Times New Roman" size=2></FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD align=left width="40%">
      <HR align=left width="80%" color=#000000 noShade SIZE=2>
    </TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD align=left width="40%"></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="40%">
      <DIV><FONT face="Times New Roman" size=2>Yacov Kaufman </FONT></DIV>
      <DIV><FONT face="Times New Roman" size=2>Chief Financial
      Officer</FONT></DIV></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2></FONT></TD></TR></TABLE></DIV></FONT></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>v017274_ex32-1.htm
<TEXT>
<HTML><HEAD>
<TITLE>
</TITLE>
</HEAD><BODY id=38 bgColor=#ffffff>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
32.1</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>PRINCIPAL
EXECUTIVE OFFICER CERTIFICATION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
connection with the Annual Report on Form 10-K , as amended by Amendment No. 1
thereto on Form 10K/A (the &#8220;Report&#8221;), of Data Systems &amp; Software Inc. (the
"Company") for the period ended December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof, the undersigned, George Morgenstern,
Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C.
Section 1350, that:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV></DIV>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>1. </FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      Report fully complies with the requirements of Section 13(a) or 15(d) of
      the Securities Exchange Act of 1934; and</FONT></DIV></FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>2. </FONT></TD>
    <TD width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.</FONT></DIV></DIV></FONT></DIV></TD></TR></TABLE></DIV></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center bgColor=#ffffff
border=0>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="50%"><FONT size=2>Dated: May 2, 2005</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="50%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="49%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD><FONT face="Times New Roman" size=2></FONT></TD>
    <TD><FONT face="Times New Roman" size=2>By:&nbsp;&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>/s/&nbsp;George
    Morgenstern</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=1>&nbsp;</FONT></TD>
    <TD align=left>
      <HR align=left width="80%" color=#000000 noShade SIZE=2>
      <FONT size=2>George Morgenstern, Chief Executive Officer</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>(Principal Executive
      Officer)</FONT></TD></TR></TABLE></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></BODY>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>v017274_ex32-2.htm
<TEXT>
<HTML><HEAD>
<TITLE>
</TITLE>
</HEAD><BODY id=38 bgColor=#ffffff>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
32.2</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><BR>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>PRINCIPAL
FINANCIAL OFFICER CERTIFICATION</STRONG></FONT></DIV></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
connection with the Annual Report on Form 10-K , as amended by Amendment
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No. 1
thereto on Form 10K/A (the &#8220;Report&#8221;) of Data Systems &amp; Software Inc. (the
"Company") for the period ended December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned,
Yacov Kaufman, Chief Financial Officer of the Company, hereby certifies,
pursuant to 18 U.S.C. Section 1350, that:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV></DIV></DIV>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#ffffff>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>1. </FONT></TD>
    <TD vAlign=top width="90%"><FONT size=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      Report fully complies with the requirements of Section 13(a) or 15(d) of
      the Securities Exchange Act of 1934; and</FONT></DIV></FONT></TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="90%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>2. </FONT></TD>
    <TD width="90%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the
      Company.</FONT></DIV></DIV></FONT></DIV></TD></TR></TABLE></DIV></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
align=justify>
<TABLE cellSpacing=0 cellPadding=0 width="100%" align=center bgColor=#ffffff
border=0>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="50%"><FONT size=2>Dated: May 2, 2005</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD width="50%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD width="49%"><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD><FONT face="Times New Roman" size=2></FONT></TD>
    <TD><FONT face="Times New Roman" size=2>By:&nbsp;&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>/s/&nbsp;Yacov
Kaufman</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=1>&nbsp;</FONT></TD>
    <TD align=left>
      <HR align=left width="80%" color=#000000 noShade SIZE=2>
      <FONT size=2>Yacov Kaufman, Chief Financial Officer</FONT></TD></TR>
  <TR vAlign=top bgColor=#ffffff>
    <TD colSpan=2><FONT face="Times New Roman" size=2>&nbsp;</FONT></TD>
    <TD><FONT face="Times New Roman" size=2>(Principal Financial
      Officer)</FONT></TD></TR></TABLE></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV></BODY></HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
