<SEC-DOCUMENT>0001299933-11-003421.txt : 20111123
<SEC-HEADER>0001299933-11-003421.hdr.sgml : 20111123
<ACCEPTANCE-DATETIME>20111123160632
ACCESSION NUMBER:		0001299933-11-003421
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20111123
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20111123
DATE AS OF CHANGE:		20111123

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHS INC
		CENTRAL INDEX KEY:			0000823277
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-FARM PRODUCT RAW MATERIALS [5150]
		IRS NUMBER:				410251095
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-50150
		FILM NUMBER:		111225438

	BUSINESS ADDRESS:	
		STREET 1:		5500 CENEX DRIVE
		CITY:			INVER GROVE HEIGHTS
		STATE:			MN
		ZIP:			55077
		BUSINESS PHONE:		651-355-6000

	MAIL ADDRESS:	
		STREET 1:		5500 CENEX DRIVE
		CITY:			INVER GROVE HEIGHTS
		STATE:			MN
		ZIP:			55077

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CENEX HARVEST STATES COOPERATIVES
		DATE OF NAME CHANGE:	19980611

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HARVEST STATES COOPERATIVES
		DATE OF NAME CHANGE:	19961212
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_43599.htm
<DESCRIPTION>LIVE FILING
<TEXT>
<!-- CoverPageHeader start -->
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> CHS Inc. (Form: 8-K) </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">
<!-- Comment1 -->
<A NAME="DOCUMENT_TOP">&nbsp;</A>
<P>
<!-- CoverPageHeader end --><!-- CoverPageTitle START -->
<A NAME="DOCUMENT_TOP">&nbsp;</A>
<HR NOSHADE>
<P>
<P ALIGN="CENTER">
<FONT SIZE="4">
		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
</FONT>
<BR>
<FONT SIZE="2">
	WASHINGTON, D.C. 20549
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="5">
	FORM 8-K
</FONT>
<FONT SIZE="2">

</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="3">
	CURRENT REPORT
</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
</FONT>
</P>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="51%">
	&nbsp;
</TD>
<TD WIDTH="5%">
	&nbsp;
</TD>
<TD WIDTH="44%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Date of Report (Date of Earliest Event Reported):
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	November 23, 2011
</FONT>
</TD>
</TR>
</TABLE>
<BR>
</CENTER>
<!-- CoverPageTitle END --><!-- CoverPageRegistrant START -->
<P ALIGN="CENTER"><!-- -->
<FONT SIZE="6">
	CHS Inc.
</FONT>
<FONT SIZE="2">
<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="33%">
	&nbsp;
</TD>
<TD WIDTH="34%">
	&nbsp;
</TD>
<TD WIDTH="33%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Minnesota
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	0-50150
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	41-0251095
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________________<BR>
	(State or other jurisdiction
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________<BR>
	(Commission
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
______________<BR>
	(I.R.S. Employer
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	of incorporation)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	File Number)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Identification No.)
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	5500 Cenex Drive, Inver Grove Heights, Minnesota
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	55077
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_________________________________<BR>
	(Address of principal executive offices)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
___________<BR>
	(Zip Code)
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
<TD WIDTH="51%">
	&nbsp;
</TD>
<TD WIDTH="5%">
	&nbsp;
</TD>
<TD WIDTH="44%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Registrant&#146;s telephone number, including area code:
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	651-355-6000
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="2">
	&nbsp;
</FONT>
<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
</P>
<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
</P></FONT><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 1.01 Entry into a Material Definitive Agreement.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
On November 23, 2011, CHS Inc., a Minnesota corporation ("CHS"), entered into an Agreement and Plan of Merger (the "Merger Agreement") among CHS, Science Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of CHS ("Merger Sub"), and Solbar Industries Ltd., an Israeli company ("Solbar").  The Merger Agreement provides for the merger of Merger Sub with and into Solbar (the "Merger"), with Solbar continuing as the surviving corporation in the Merger.<br><br>Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each ordinary share of Solbar issued and outstanding at the effective time would be converted into the right to receive from CHS $4.00 in cash, without interest, which reflects an equity value of approximately $133,000,000.  Solbar stock options would be terminated in exchange for a cash payment in an amount per share equal to the difference between the applicable exercise price per share and $4.00.<br><br>The Merger Agreement contains customary representations, warranties and covenants of both CHS and Solbar.  These covenants include, among others, (i) an obligation on behalf of Solbar to operate its business consistent with past practices until the Merger is consummated, (ii) limitations on Solbar&#x2019;s right to solicit or engage in negotiations regarding alternative business combinations or change-in-control transactions or to withdraw the support of its Board of Directors for the Merger, (iii) an obligation on behalf of Solbar to take necessary and advisable actions to promptly call and hold a meeting of its shareholders to consider and approve the Merger, and (iv) an obligation that the parties use their respective commercially reasonable efforts to obtain any necessary governmental, regulatory and third party approvals.<br><br>The consummation of the Merger is subject to the satisfaction or waiver of closing conditions applicable to both CHS and Solbar, including, among others, (i) the receipt of required regulatory approvals, and (ii) the adoption of the Merger Agreement and approval of the Merger by the shareholders of Solbar.<br><br>The Merger Agreement provides for termination rights on behalf of both CHS and Solbar, and provides that under specified circumstances Solbar may be required to (i) pay CHS a termination fee equal to $4% of aggregate consideration to be paid under the Merger Agreement to the shareholders and optionholders of Solbar, and (ii) reimburse CHS for its expenses incurred in connection with the Merger Agreement and proposed merger (up to a maximum of $1,500,000).<br><br>Provided all conditions set forth in the Merger Agreement are met, the parties anticipate that the Merger will be consummated in the first quarter of calendar year 2012.<br><br>The Merger Agreement has been included as an exhibit to this Current Report on Form 8-K to provide investors and security holders with information regarding its terms.  It is not intended to provide any other factual information about CHS, Merger Sub or Solbar.  The Merger Agreement contains representations and warranties that the parties made to each other as of a specific date.  The assertions embodied in the representations and warranties in the Merger Agreement were made solely for purposes of the Merger Agreement and the transactions and agreements contemplated thereby among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement.  Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may apply contractual standards of materiality in a way that is different from what may be viewed as material by investors or that is different from standards of materiality generally applicable under the United States federal securities laws or may not be intended as statements of fact, but rather as a way of allocating risk among the parties to the Merger Agreement.<br><br>The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.<br><br>Cautionary Statements Regarding Forward-Looking Information<br><br>This communication contains a statement regarding the expected timing of the completion of the Merger, which is a forward-looking statement as that term is defined in the Private Securities Litigation Reform Act of 1995.  This statement is based on the current expectations of management of CHS and speaks only as of the date of this communication.  There are a number of risks and uncertainties that could cause actual results to differ materially from this forward-looking statement.  These risks and uncertainties include: (i) the risk that the stockholders of Solbar may not adopt the Merger Agreement; (ii) the risk that the companies may be unable to obtain regulatory approvals required for the merger, or that required regulatory approvals may delay the Merger; (iii) the risk that the conditions to the closing of the Merger may not be satisfied; and (iv) the risk that an unsolicited offer by another company to acquire shares or assets of Solbar could interfere with or prevent the Merger.  CHS does not undertake, and expressly disclaims, any duty to update this forward-looking statement whether as a result of new information, future events or changes in its expectations, except as required by law.<br>
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 8.01 Other Events.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
On November 23, 2011, CHS issued the press release attached to this Current Report as Exhibit 99.1.
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 9.01 Financial Statements and Exhibits.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
(d) Exhibits<br><br>2.1 Agreement and Plan of Merger, dated as of November 23, 2011, among CHS Inc., Science Merger Sub Ltd. and Solbar Industries Ltd.<br><br>99.1 Press Release dated November 23, 2011.<br>
</FONT>
</P>
<!-- Item END -->
<BR><BR><BR><BR><P ALIGN="LEFT" STYLE="FONT-SIZE: 10PT"></P><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- SignatureHeader START -->
<P ALIGN="CENTER">
<FONT SIZE="2">
<B>
	SIGNATURES
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
</FONT>
</P>
<!-- SignatureHeader END --><!-- Signature START -->
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="19%">
	&nbsp;
</TD>
<TD WIDTH="34%">
	&nbsp;
</TD>
<TD WIDTH="3%">
	&nbsp;
</TD>
<TD WIDTH="1%">
	&nbsp;
</TD>
<TD WIDTH="43%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD COLSPAN="3" VALIGN="TOP" ALIGN="LEFT">
<FONT SIZE="2">
	CHS Inc.
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
<I>
	November 23, 2011
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	By:
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	/s/ David A. Kastelic
</I>
<BR>
</FONT>
</TD>
</TR>
<TR>
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<HR SIZE="1" NOSHADE>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Name: David A. Kastelic
</I>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Title: Executive Vice President and Chief Financial Officer
</I>
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<!-- Signature END --><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><P ALIGN="CENTER">
<FONT SIZE="2">
	Exhibit&nbsp;Index
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM">
<TD WIDTH="8%">
	&nbsp;
</TD>
<TD WIDTH="15%">
	&nbsp;
</TD>
<TD WIDTH="77%">
	&nbsp;
</TD>
</TR>

<BR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Exhibit No.
</B>
</FONT>
</TD>
<TD>
<FONT SIZE="1">
	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Description
</B>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="CENTER">
<HR SIZE="1" NOSHADE>
</TD>
<TD>
<FONT SIZE="1">
	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="CENTER">
<HR ALIGN="LEFT" SIZE="1" WIDTH="88%" NOSHADE>
</TD>
</TR>





<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	2.1
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Merger Agreement
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	99.1
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Press Release
</FONT>
</TD>
</TR></TABLE></CENTER><!-- HTMLFooter START -->
</BODY>
</HTML>
<!-- HTMLFooter END -->
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-2.1
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-2.1 </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

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


<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt">AGREEMENT AND PLAN OF MERGER</FONT>



<P align="center" style="font-size: 12pt">Dated as of November&nbsp;23, 2011



<P align="center" style="font-size: 12pt">by and among



<P align="center" style="font-size: 12pt">SOLBAR INDUSTRIES LTD.,



<P align="center" style="font-size: 12pt">CHS, INC.,



<P align="center" style="font-size: 12pt">and



<P align="center" style="font-size: 12pt">SCIENCE MERGER SUB LTD.


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">ARTICLE&nbsp;ITHE MERGER</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">The Merger</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Closing</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Effective Time</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Effects of the Merger</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.5.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Articles of Association of the Surviving Company</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.6.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Directors and Officers of the Surviving Company</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 1.7.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Approval Procedures</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="9" align="left">ARTICLE&nbsp;IIEFFECT OF THE MERGER ON SHARE CAPITAL OF CONSTITUTENT COMPANIES; EXCHANGE<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">OF CERTIFICATES; OPTIONS
SECTION 2.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Effect on Share capital</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 2.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Surrender and Payment Procedures</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 2.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Options</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 2.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Adjustments to Merger Consideration</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 2.5.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Payment Currency</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">ARTICLE&nbsp;IIIREPRESENTATIONS AND WARRANTIES OF THE COMPANY<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 3.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Organization, Standing and Corporate Power</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 3.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Capitalization</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 3.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Authority; Noncontravention; Voting Requirements</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:20px; text-indent:-10px">SECTION 3.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Governmental Approvals</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>SECTION 3.5. Company Israeli Documents; Internal Controls; Financial Statements;
Undisclosed Liabilities 10</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.6.Absence of Certain Changes or Events<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.7.Legal Proceedings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.8.Compliance With Laws; Permits<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.9.Information in Immediate Reports<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.10.Tax Matters</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.11.Employee Benefits and Labor Matters<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.12.Environmental Matters<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.13.Contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.14.Real Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.15.Intellectual Property<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.16.Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.17.Brokers and Other Advisors; Transaction Expenses<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.18.Takeover Statutes and Rights Plans<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.19.Tangible Personal Property<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.20.Indebtedness</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.21.Transactions with Affiliates<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.22.Product Defect; Product Warranties<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.23.Customers and Suppliers<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.24.Accounts Receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.25.No Consents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 3.26.Anticorruption</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 3.27.No Other Representations and Warranties<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">ARTICLE&nbsp;IV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.1.Organization, Standing and Corporate Power<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.2.Authority; Noncontravention<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.3.Governmental Approvals<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.4.Ownership and Operations of Merger Sub<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.5.Brokers and Other Advisors<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 4.6.Litigation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 4.7.Available Funds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">SECTION 4.8.No Other Representations and Warranties<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">ARTICLE&nbsp;V</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">ADDITIONAL COVENANTS AND AGREEMENTS</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>SECTION 5.1. Preparation of Immediate Reports; Company Shareholder Meeting 38</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Conduct of Business by Company</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">No Solicitation by the Company; Etc</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Commercially Reasonable Efforts</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.5.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Merger Proposal</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.6.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Public Announcements</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.7.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Access to Information; Confidentiality</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.8.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Notice of Certain Matters</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD>SECTION 5.9.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left">Directors&#146; and Officers&#146; Insurance; Indemnification Agreements48</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.10.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Merger Sub Obligations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.11.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Employee Matters</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.12.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Israeli Approvals</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.13.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Transaction Expenses</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 5.14.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Non-Solicitation of Employees, Consultants and Advisors</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">ARTICLE&nbsp;VICONDITIONS PRECEDENT<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 6.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Conditions to Each Party&#146;s Obligation to Effect the Merger</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 6.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Conditions to Obligations of Parent and Merger Sub</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 6.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Conditions to Obligation of the Company</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 6.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Frustration of Closing Conditions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">ARTICLE&nbsp;VIITERMINATION<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 7.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Termination</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 7.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Effect of Termination</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 7.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Expense Reimbursement and Termination Fee</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="5" align="left">ARTICLE&nbsp;VIIIMISCELLANEOUS<BR></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">No Survival, Etc</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Amendment or Supplement</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Extension of Time, Waiver, Etc</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Assignment</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.5.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Counterparts</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries; Fees and Expenses 59</TD>
    <TD width="4%" style="background: transparent">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.7.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Governing Law; Jurisdiction; Specific Enforcement</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.8.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Notices</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.9.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Severability</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.10.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Definitions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SECTION 8.11.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left">Interpretation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 12pt"><B>LIST OF EXHIBITS</B>


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Exhibit&nbsp;A
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Merger Proposal</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 12pt"><B>AGREEMENT AND PLAN OF MERGER</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">This AGREEMENT AND PLAN OF MERGER, dated as of November&nbsp;23, 2011 (this &#147;<B>Agreement</B>&#148;), is by and
among CHS, Inc., a Minnesota corporation (&#147;<B>Parent</B>&#148;), Science Merger Sub Ltd., an Israeli company
and a wholly owned Subsidiary of Parent (&#147;<B>Merger Sub</B>&#148;), and Solbar Industries Ltd., an Israeli
company (the &#147;<B>Company</B>&#148;). Certain terms used in this Agreement are defined in <U>Section&nbsp;8.10</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, upon the terms and subject to the conditions of this Agreement, and in accordance
with Sections&nbsp;314-327 of the Israeli Companies Law, 5759-1999 (the &#147;<B>Israeli Companies Law</B>&#148;),
Parent, Merger Sub and the Company intend to effect the merger of Merger Sub with and into the
Company (the &#147;<B>Merger</B>&#148;), pursuant to which Merger Sub shall cease to exist, the Company shall become
a wholly-owned subsidiary of Parent or any Subsidiary of Parent to which Parent assigns all of its
shares of the Merger Sub prior to the Effective Time, and the Company Ordinary Shares issued and
outstanding immediately prior to the Effective Time will be converted into the right to receive the
Merger Consideration;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Board of Directors of Parent and the Board of Directors and shareholders of
Merger Sub have each approved this Agreement, the Merger and the other Transactions, on the terms
and subject to the conditions in this Agreement;


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Board of Directors of the Company has approved and declared advisable and in the
best interests of the Company and its shareholders this Agreement, the Merger and the other
Transactions, on the terms and subject to the conditions in this Agreement; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Board of Directors of the Company has resolved to recommend that the shareholders
of the Company vote &#147;For&#148; approval of this Agreement and the Merger at the Company Shareholder
Meeting.


<P align="left" style="font-size: 12pt; text-indent: 4%">NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, Parent, Merger Sub and the
Company hereby agree as follows:


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;I<BR>
<U><B>The Merger</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.1. <U>The Merger</U>. Upon the terms and subject to the conditions in this
Agreement and the applicable provisions of the Israeli Companies Law, at the Effective Time Merger
Sub shall be merged with and into the Company in accordance with Section&nbsp;323 of the Israeli
Companies Law, the separate corporate existence of Merger Sub shall thereupon cease, and the
Company shall be the company surviving the Merger and become a wholly-owned subsidiary of Parent
(the &#147;<B>Surviving Company</B>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.2. <U>Closing</U>. The closing of the Merger (the &#147;<B>Closing</B>&#148;) shall take place as
promptly as reasonably practicable (but no later than the fifth business day) after satisfaction or
waiver of the conditions set forth in <U>Article&nbsp;VI</U> (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions at such time), at the offices of Naschitz, Brandes & Co., 5 Tuval Street, Tel Aviv,
Israel, unless another time, date or place is agreed to in writing by the parties hereto. The date
of the Closing is referred to in this Agreement as the &#147;<B>Closing Date</B>.&#148;


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.3. <U>Effective Time</U>. Immediately following the Closing, Merger Sub and the
Company shall deliver to the Registrar of Companies of the State of Israel (the &#147;<B>Companies
Registrar</B>&#148;) a notice informing the Companies Registrar of the Merger and requesting the Companies
Registrar to issue a certificate evidencing the completion of the Merger in accordance with
Section&nbsp;323(5) of the Israeli Companies Law (the &#147;<B>Certificate of Merger</B>&#148;). The parties hereto shall
use their commercially reasonable efforts to obtain the Certificate of Merger on, or as soon as
possible after, the Closing Date. The Merger shall become effective upon the issuance and delivery
by the Companies Registrar of the Certificate of Merger in accordance with the Israeli Companies
Law. The time at which the Merger becomes effective is referred to in this Agreement as the
&#147;<B>Effective Time</B>.&#148;


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.4. <U>Effects of the Merger</U>. The Merger shall have the effects set forth in
the Israeli Companies Law and this Agreement. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, (a)&nbsp;all properties, rights, privileges, immunities,
powers and franchises of the Company and Merger Sub shall vest in the Surviving Company, (b)&nbsp;all
debts, liabilities, obligations and duties of the Company and Merger Sub shall become the debts,
liabilities, obligations and duties of the Surviving Company and (c)&nbsp;all properties, rights,
privileges, immunities, powers and franchises of the Surviving Company shall continue unaffected by
the Merger in accordance with the Israeli Companies Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.5. <U>Articles of Association of the Surviving Company</U>. The articles of
association of the Company, as in effect immediately prior to the Effective Time, shall be the
articles of association of the Surviving Company, until thereafter amended as provided therein or
by applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.6. <U>Directors and Officers of the Surviving Company and its Subsidiaries</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Effective as of the Effective Time, each member of the respective Boards of Directors (or
equivalent governing bodies) of the Company&#146;s Subsidiaries (to the extent entitled to be appointed
or removed by the Company) shall resign or be removed and replaced with successors selected by
Parent; provided that Parent may request that any acting director of a Subsidiary remain in office
after the Effective Time to the extent and for the period reasonably necessary for Company to
designate replacement directors under relevant Law and the parties shall then not take any action
to cause the removal or resignation of such director. Effective as of the Effective Time, each
member of the Board of Directors (or equivalent governing bodies) of the Company shall resign or be
removed and the directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Company immediately following the Effective Time, until their respective
successors are duly elected or appointed or their earlier death, resignation or removal in
accordance with the articles of association of the Surviving Company.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The parties hereto shall take all reasonable actions necessary so that from and after the
Effective Time, the individuals designated by Parent not later than ten days prior to the Closing
Date shall be the officers of the Surviving Company, until their respective successors are duly
appointed or their earlier death, resignation or removal in accordance with the articles of
association of the Surviving Company.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 1.7. <U>Approval Procedures</U>. The parties acknowledge and agree that the Merger
and the other Transactions will be consummated in accordance with Section&nbsp;314 through Section&nbsp;327
of the Israeli Companies Law.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;II



<P align="center" style="font-size: 12pt"><U><B>Effect of the Merger on Share Capital of Constituent Companies; Exchange of Certificates;<BR>
Options</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 2.1. <U>Effect on Share Capital</U>. At the Effective Time, by virtue of the Merger
and without any action on the part of any holder of ordinary shares, par value NIS&nbsp;1 per share, of
the Company (&#147;<B>Company Ordinary Shares</B>&#148;) or any share capital of Merger Sub:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Share Capital of Merger Sub</U>. Each issued and outstanding share of Merger Sub
shall be converted into and become one validly issued, fully paid and nonassessable ordinary share
of the Surviving Company and the shares of the Surviving Company into which the shares of Merger
Sub ordinary shares are so converted shall be the only shares of the Surviving Company that are
issued and outstanding immediately after the Effective Time. From and after the Effective Time,
all certificates representing the shares of Merger Sub shall be deemed for all purposes to
represent the number of ordinary shares of the Surviving Company into which they were converted in
accordance with the immediately preceding sentence.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Treasury/Dormant Shares</U>. Any Company Ordinary Shares that are owned by the
Company or a Subsidiary thereof shall be cancelled and retired without any conversion or
consideration paid in respect thereof, and shall cease to exist.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Company Ordinary Shares</U>. Each issued and outstanding Company Ordinary Share
(other than those referenced in Section&nbsp;2.1(b)) shall cease to be outstanding, shall be cancelled
and be converted into the right to receive from Parent $4.00 in cash without interest per Company
Ordinary Share (the amount payable to a holder of Company Ordinary Shares as a result of the
Merger, the &#147;<B>Merger Consideration</B>&#148;, and in the aggregate, the &#147;<B>Aggregate Merger Consideration</B>&#148;). As
of the Effective Time, each holder of a certificate which immediately prior to the Effective Time
represented outstanding Company Ordinary Shares (each, a &#147;<B>Certificate</B>&#148;), and each owner of any
Book-Entry Company Shares, shall cease to have any rights with respect to such Certificate or the
Company Ordinary Shares formerly represented thereby or to such Book-Entry Company Shares, as
applicable, except the right to receive the Merger Consideration to be paid in consideration
therefor upon surrender of such Certificate in accordance with <U>Section&nbsp;2.2(b)</U>. If, at any
time after the Effective Time, Certificates are presented to the Surviving Company for any reason,
they shall be marked cancelled.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 2.2. <U>Surrender and Payment Procedures</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Paying Agent</U>. Prior to the Effective Time, Parent shall appoint a bank or trust
company that maintains an office in Israel to act as paying agent for the holders of Company
Ordinary Shares in connection with the Merger (the &#147;<B>Paying Agent</B>&#148;). The Paying Agent shall
receive, and hold in trust for the benefit of holders of Company Ordinary Shares, the Aggregate
Merger Consideration. Parent shall deposit the Aggregate Merger Consideration with the Paying
Agent at or prior to the Effective Time. Pending its disbursement to such holders, the Paying
Agent shall invest the Merger Consideration deposited with it as directed by Parent or, after the
Effective Time, the Surviving Company; <U>provided</U>, that, (i)&nbsp;no such investment shall relieve
Parent or the Paying Agent from making the payments required by this <U>Article&nbsp;II</U>, and
(ii)&nbsp;no such investment shall have maturities that could prevent or delay payments to be made to
the former Company shareholders pursuant to this <U>Article&nbsp;II</U>. Any net profit resulting
from, or interest or income produced by, the Merger Consideration deposited with the Paying Agent
shall be payable to Parent or as Parent otherwise directs.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Paying Agent Payment Procedures</U>. Parent and the Surviving Company shall instruct
the Paying Agent to, as promptly as reasonably practicable (but not later than the second business
day) after the Effective Time:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;release to the Company&#146;s registration company (the &#147;<B>Registration Company</B>&#148;), for the
benefit of the beneficial owners of Company Ordinary Shares outstanding immediately prior to the
Effective Time that are registered in the name of the Registration Company for the benefit of TASE
members (&#147;<B>Book Entry Company Shares</B>&#148;), cash in an amount equal to the product of (A)&nbsp;the Merger
Consideration payable per Company Ordinary Share, <U>multiplied</U> by (B)&nbsp;the number of Book
Entry Company Shares (the product of (A)&nbsp;and (B), the &#147;<B>Book-Entry Fund</B>&#148;). The Registration Company
shall promptly deliver the Book-Entry Fund to the TASE Clearinghouse, which shall deliver the
respective and appropriate portion of the Book-Entry Fund to each of the beneficial owners of Book
Entry Company Shares in accordance with applicable customary stock surrender and payment procedures
and regulations of TASE; and


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;mail to each holder of record of a Certificate, excluding any Certificate representing
Company Ordinary Shares held of record by the Registration Company, a letter which shall
specify&nbsp;instructions for use in effecting the surrender of the Certificates in exchange for payment
of the Merger Consideration for the Company Ordinary Shares formerly represented thereby. Upon
surrender of a Certificate for cancellation to the Paying Agent, together with such properly
completed and validly executed documents as may reasonably be required by the Paying Agent, the
surrendered Certificate shall forthwith be cancelled in the Company&#146;s books and the surrendering
holder shall be promptly paid the Merger Consideration (less any required withholding for Tax) for
the Company Ordinary Shares formerly represented by such Certificate. Notwithstanding the
surrender and payment procedure described in this <U>Section&nbsp;2.2</U>, each Certificate shall be
deemed at all times after the Effective Time to represent only the right to receive the Merger
Consideration for the Company Ordinary Shares formerly represented thereby as contemplated by this
<U>Article&nbsp;II</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Shareholder Register</U>. The Merger Consideration paid in respect of Company
Ordinary Shares (whether in the form of Book Entry Company Shares or represented by a Certificate)
pursuant to this <U>Article&nbsp;II</U> shall be deemed to have been paid in full satisfaction of all
rights pertaining to such Company Ordinary Shares, and at the Effective Time, the shareholder
register of the Company shall be closed and thereafter there shall be no further registration of
transfers on the shareholder register of the Surviving Company.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;<U>Lost, Stolen or Destroyed Certificates</U>. The Paying Agent shall pay the applicable
Merger Consideration in exchange for any Company Ordinary Shares formerly represented by a
purportedly lost, stolen or destroyed Certificate, subject to the Person claiming such Certificate
to be lost, stolen or destroyed delivering an affidavit of loss, in a form reasonably acceptable to
Parent, which affidavit shall set forth such claim and shall include an indemnity against any claim
that may be made against Parent or the Surviving Company with respect to such Certificate. Any
reference made in this Agreement to a &#147;Certificate&#148; shall include an affidavit of loss in lieu
thereof that complies with the foregoing requirements.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;<U>Termination of Payment Funds</U>. At any time following the first anniversary of the
Closing Date, the Surviving Company may require the Paying Agent to deliver to it any funds
(including the proceeds of any investments with respect thereto) deposited with the Paying Agent
which have not been disbursed to the former holders of Company Ordinary Shares, and the Surviving
Company shall be entitled to require the Registration Company to return any portion of the
Book-Entry Fund not distributed to the beneficial owners of the Book Entry Company Shares, and
thereafter such former holders shall be entitled to look only to the Surviving Company (subject to
abandoned property, escheat or other similar Laws) as general creditors thereof under applicable
law with respect to the payment of any Merger Consideration that may be payable with respect to
Company Ordinary Shares.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;<U>No Liability</U>. Notwithstanding any provision of this Agreement to the contrary,
none of the parties hereto, nor the Surviving Company or the Paying Agent shall be liable to any
Person for any amount properly delivered to a Governmental Authority pursuant to any applicable
abandoned property, escheat or similar Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;<U>Withholding Taxes</U>. Notwithstanding anything in this Agreement to the contrary,
each of Parent, the Surviving Company, the Registration Company, the TASE members, the Paying Agent
and the 102 Trustee shall be entitled to deduct and withhold from the consideration otherwise
payable directly or indirectly to any former holder of Company Ordinary Shares and/or Options (as
the case may be) pursuant to this Agreement, any amounts required to be deducted and withheld from
such payments under the Israeli Income Tax Ordinance &#091;New Version&#093;, 1961, as amended, and the rules
and regulations promulgated thereunder (the &#147;<B>Ordinance</B>&#148;), or under any other applicable state,
local, domestic or foreign Law; <U>provided</U>, <U>however</U>, that at least three (3)&nbsp;business
days prior to any payment payable if a valid certificate or ruling from the ITA, which provides a
withholding tax exemption or a reduced Tax rate, is provided to the Parent, the TASE member, the
Surviving Company, the Registration Company, the Paying Agent or the 102 Trustee, as applicable, in
form and substance acceptable thereto, as the case may be, the deduction and withholding of any
amounts under the Ordinance or any other provision of Israeli law or requirement, if any, from the
aggregate Merger Consideration or Option Consideration, as the case may be, payable pursuant to
this Agreement shall be made in accordance with the provisions of such ruling or certificate. To
the extent that amounts are so withheld and paid over to the appropriate Governmental Authority by
or on behalf of Parent or the Surviving Company (such as, by a TASE member, the Registration
Company, the Paying Agent or the 102 Trustee), Parent or the Surviving Company, as the case may be,
shall be treated as though it withheld an appropriate amount of consideration otherwise payable
pursuant to this Agreement to any former holder of Company Ordinary Shares and/or Options (as the
case may be) and paid an appropriate amount to such Governmental Authority. Any amounts so
withheld and paid over to the appropriate Governmental Authority shall be treated for all purposes
as having been paid directly to the Person in respect of which such deduction and withholding was
made.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 2.3. <U>Options</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Options</U>. Prior to the Effective Time, the Company shall take all actions
necessary to provide that each option to acquire Company Ordinary Shares (each, an &#147;<B>Option</B>&#148;) issued
and outstanding immediately prior to the Effective Time shall be cancelled, terminated and
converted at the Effective Time into the right to receive only the Option Consideration for each
Company Ordinary Share then subject to such Options. In each case, the Option Consideration each
holder of Options is entitled to receive for such Options shall be rounded to the nearest cent and
computed after aggregating the cash amounts payable for all Options held by such holder. Upon the
Effective Time, all Options shall no longer be outstanding and shall automatically cease to exist,
and each holder of an Option shall cease to have any rights with respect thereto, except the rights
to receive any cash payments, as expressly set forth herein. For purposes of the foregoing, the
applicable exercise price of each Option shall be calculated in U.S. Dollars in accordance with the
representative rate of the U.S. Dollar in NIS, as published by the Bank of Israel on the third
business day prior to the Closing Date.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Option Consideration; Payment Timing</U>. As promptly as reasonably practicable
following the Effective Time, and in any event not later than the second business day thereafter,
Parent shall transfer, or cause to be transferred, to the account designated by the 102 Trustee, in
cooperation with the Company, the aggregate Option Consideration that holders of Options are
entitled to receive pursuant to <U>Section&nbsp;2.3(a)</U>; <U>provided</U>, that in lieu of making
such deposit, Parent may elect to pay such Option Consideration directly to such holders through
the Surviving Company&#146;s or its applicable Subsidiaries&#146; ordinary payroll mechanisms or through some
other payment procedure, unless such payment mechanism will result in the loss of a Tax benefit
otherwise available to the applicable Option holder or is prohibited by the terms of the applicable
Company Share Plan or applicable Law. All payments with respect to Options, as set forth on
<U>Section&nbsp;3.2(a)</U> of the Company Disclosure Schedule&nbsp;(the &#147;<B>Option Schedule</B>&#148;), shall be
delivered, or caused to be delivered, by Parent to the 102 Trustee, as soon as reasonably
practicable after the Effective Time (but not later than the second business day thereafter), to be
held and distributed pursuant to the agreement with the 102 Trustee, the terms governing the
applicable Option and applicable Laws (including the provisions of Section&nbsp;102 of the Ordinance and
the rules and regulations promulgated thereunder) and the Options Tax Ruling is obtained. The 102
Trustee shall comply with any applicable Israeli Tax withholding requirements with respect to
payments in respect of Company 102 Securities and with any procedures required by the Options Tax
Ruling, if obtained.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Company Share Plans</U>. Prior to the Effective Time, the Company shall take all
actions and make any amendments to the terms of the Company Share Plans and related award
agreements, to the extent required to effect the treatment provided in th<U>is Section&nbsp;2.3</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 2.4. <U>Adjustments to Merger Consideration</U><I>. </I>The Merger Consideration shall be
adjusted to reflect appropriately the effect of any forward or reverse stock split, stock dividend
(including any dividend or distribution of securities exercisable or exchangeable for or
convertible into shares of the Company), cash dividends, stock issuance or sale, reorganization,
recapitalization, reclassification, combination, exchange of shares or other like change with
respect to shares of the Company occurring on or after the date hereof and prior to the Effective
Time.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 2.5. <U>Payment Currency</U>. All payments of the Total Consideration shall be made,
at Parent&#146;s election, in United States Dollars or in NIS calculated in accordance with the
representative rate of the U.S. Dollar in NIS, as published by the Bank of Israel on the third
business day prior to the Closing Date.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;III



<P align="center" style="font-size: 12pt"><U><B>Representations and Warranties of the Company</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">The Company represents and warrants to Parent and Merger Sub that, except as set forth in the
disclosure schedules delivered by the Company to Parent simultaneously with the execution of this
Agreement (the &#147;<B>Company Disclosure Schedule</B>&#148;)(it being understood that any information disclosed in
a specific section or subsection of the Company Disclosure Schedule shall be deemed to be disclosed
and incorporated into any other section or subsection of the Company Disclosure Schedule to which
it is reasonably apparent that such disclosed information is responsive):


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.1. <U>Organization, Standing and Corporate Power</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The Company and each of its Subsidiaries is a corporation or other organization duly
organized, validly existing and in good standing (to the extent such status is recognized in such
jurisdictions) under the Laws of the jurisdiction of its incorporation or organization, as the case
may be, and has all requisite power and authority necessary to own, lease and operate all of its
properties and assets and to carry on its business as it is now being conducted. The Company and
each of its Subsidiaries is duly licensed or qualified to do business and is in good standing in
each jurisdiction in which the nature of the business conducted or the character or location of the
properties and assets owned or leased makes such licensing or qualification necessary, except where
the failure to be so licensed, qualified and/or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Section&nbsp;3.1(b)</U> of the Company Disclosure Schedule&nbsp;lists all Subsidiaries of the
Company together with the jurisdiction of incorporation or organization of each such Subsidiary.
All the outstanding shares of capital stock of, or other equity interests in, each Subsidiary of
the Company held by the Company have been duly authorized and validly issued and are fully paid and
nonassessable and, except as set forth in <U>Section&nbsp;3.1(b)</U> of the Company Disclosure
Schedule, are owned, directly or indirectly, by the Company. Except as set forth in
<U>Section&nbsp;3.1(b)</U> of the Company Disclosure Schedule, all such shares that are owned by the
Company or its Subsidiaries are owned free and clear of all Liens. Neither the Company nor any
Subsidiary of the Company is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any capital stock or other ownership interest of the Company or any
Subsidiary or any convertible securities or rights, warrants or options of the type described in
the preceding sentence. Except as set forth in <U>Section&nbsp;3.1(b)</U> of the Company Disclosure
Schedule, neither the Company nor any Subsidiary of the Company is party to any agreement
restricting the voting or transfer of any share capital or other ownership interest of the Company
or any Subsidiary. Except as set forth in <U>Section&nbsp;3.1(b)</U> of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns, directly or indirectly, any capital
stock, voting securities or equity or other ownership interests in any Person.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Company has delivered to Parent correct and complete copies of its articles of
association (the &#147;<B>Company Charter Documents</B>&#148;) and correct and complete copies of the memorandum of
association, articles of association, certificates of incorporation and bylaws (or comparable
organizational and governing documents) of each of its Subsidiaries (the &#147;<B>Subsidiary Documents</B>&#148;),
in each case as amended. All such Company Charter Documents and Subsidiary Documents are in full
force and effect. The Company has made available to Parent and its representatives correct and
complete copies of the minutes (or, in the case of minutes that have not yet been finalized, drafts
thereof) of all meetings of shareholders, the Board of Directors and each committee of the Board of
Directors of the Company and each of its Subsidiaries held since January&nbsp;1, 2009.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.2. <U>Capitalization</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The authorized share capital of the Company is NIS 40,000,000 divided into 40,000,000
ordinary shares, with a par value of NIS 1 per share, of which (i)&nbsp;32,047,972 Company Ordinary
Shares are issued and outstanding, (ii)&nbsp;300,000 Company Ordinary Shares are dormant shares that are
issued and held by a Subsidiary of the Company, (iii)&nbsp;1,200,000 Company Ordinary Shares are subject
to outstanding Options granted under the Company Share Plans and (iv)&nbsp;1,000,000 Company Ordinary
Shares are subject to issuance upon conversion of Convertible Debt outstanding as of the date
hereof and 750,000 Company Ordinary Shares are subject to issuance upon conversion of Convertible
Debt if the Company shall make the payment scheduled for December&nbsp;25, 2011. All outstanding
Company Ordinary Shares have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. All outstanding Options are 102 Securities and shall
be vested and exercisable as of immediately prior to the Effective Time.<U> Section&nbsp;3.2(a)</U> of
the Company Disclosure Schedule&nbsp;sets forth a correct and complete list of all outstanding Options
and other rights to purchase or receive Company Ordinary Shares (or other equity interests) granted
under the Company Share Plans or otherwise, and, for each such Option or other right, to the extent
applicable, the number of Company Ordinary Shares subject thereto, the terms of vesting, the
Company Share Plan pursuant to which it was granted, the grant and expiration dates, the exercise
price thereof (and applicable currency), the amount of Option Consideration payable therefor at the
Effective Time, the name of the holder thereof, and whether the vesting of such Option shall be
accelerated in connection with the Merger, and the applicable subsection&nbsp;of Section&nbsp;102 of the
Ordinance pursuant to which the Option was granted. The Company did not declare, set aside for
payment or pay any dividend on any shares in 2011.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Section&nbsp;3.2(b)</U> of the Company Disclosure Schedule&nbsp;sets forth a complete and
correct list of the authorized and outstanding share capital or capital stock of each respective
Subsidiary of the Company, the number and percentage of the outstanding share capital or capital
stock held by the Company, number and percentage of the outstanding share capital or capital stock
held by each shareholder thereof other than the Company and, to the Knowledge of the Company, the
name of each such shareholder. Except as set forth on <U>Section&nbsp;3.2(a)</U> and
<U>Section&nbsp;3.2(b)</U> of the Company Disclosure Schedule, there are not and as of the Effective
Time there shall not be, any share capital, shares of capital stock, voting securities or equity or
other ownership interests of the Company or any of its Subsidiaries issued and outstanding or any
subscriptions, options, restricted stock units, phantom equity awards, warrants, calls, convertible
or exchangeable securities, rights, commitments or agreements of any character providing for the
issuance or disposition of any share capital, shares of capital stock, voting securities or equity
or other ownership interests of the Company or any of its Subsidiaries, including any rights or
instruments representing the right to purchase, acquire or otherwise receive any shares of capital
stock of the Company or any of its Subsidiaries or any other securities convertible into,
exercisable or exchangeable for or evidencing the rights to subscribe for any such capital stock.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.3. <U>Authority; Noncontravention; Voting Requirements</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The Company has all necessary corporate power and authority to execute and deliver this
Agreement and, subject only to obtaining the Company Shareholder Approval and any Required
Regulatory Consents or Other Approvals, to perform its obligations hereunder and to consummate the
Merger. The execution, delivery and performance of the Company&#146;s obligations under this Agreement,
and the consummation of the Merger by the Company, have been duly authorized and approved by the
Company&#146;s Board of Directors and, except for obtaining the Company Shareholder Approval, no other
corporate or shareholder action required to be taken by or on the part of the Company is necessary
to authorize the execution, delivery and performance of the Company&#146;s obligations under this
Agreement and the consummation of the Transactions by the Company. This Agreement has been duly
and validly executed and delivered by the Company and, assuming due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except as such
enforceability (i)&nbsp;may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general application affecting or relating to the enforcement
of creditors&#146; rights generally and (ii)&nbsp;is subject to general principles of equity, whether
considered in a proceeding at law or in equity (the &#147;<B>Bankruptcy and Equity Exception</B>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The Company&#146;s Board of Directors, at a meeting duly called and held, has unanimously
(i)&nbsp;approved and declared advisable and in the best interests of the Company and its shareholders
this Agreement and the Transactions, including the Merger, (ii)&nbsp;resolved to recommend that the
shareholders of the Company vote to adopt this Agreement and (iii)&nbsp;made all other affirmative
determinations required to be made by the Company in connection with this Agreement and the Merger
under the Israeli Companies Law and any other applicable Laws. The Company has furnished to Parent
a copy of resolutions of the Board of Directors of the Company approving and adopting this
Agreement, the Merger and the other transactions contemplated hereby.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Neither the execution and delivery of this Agreement by the Company nor the consummation
by the Company of the Merger or the other Transactions, nor compliance by the Company with its
obligations hereunder (i)&nbsp;conflicts with or violates any provision of the Company Charter Documents
or Subsidiary Documents or (ii)&nbsp;assuming that the Company Shareholder Approval, the Required
Regulatory Consents and the Other Approvals are obtained, made or given (in the case of filing or
notice only requirements) and any waiting periods thereunder have terminated or expired,
(x)&nbsp;violate any Law, or any Order of any Governmental Authority applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets or (y)&nbsp;violate, conflict with,
result in the loss of any material benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in the termination of
or a right of termination or cancellation under, accelerate the performance required by, trigger
any payment or penalty under, or give rise to any obligation to purchase, sell or issue (or offer
to purchase, sell or issue) any shares of capital stock or other ownership interests of the Company
or any of its Subsidiaries, or result in the creation of any Lien upon any of the respective
properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions
or provisions of any Company Charter Document or any of the Subsidiary Documents or under any loan
or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, license, lease,
contract, arrangement or other agreement, instrument or obligation (each, a &#147;<B>Contract</B>&#148;) or any
Permit to which the Company or any of its Subsidiaries is a party or by which they or any of their
respective properties or assets is bound, except, with respect to any violations, breaches,
conflicts, defaults, terminations, cancellations under a Contract, that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Under the Israeli Companies Law, and assuming the accuracy of Parent&#146;s representation in
<U>Section&nbsp;4.2(c)</U> hereof, the affirmative vote of a majority of the Company Ordinary Shares
present and voting at the Company Shareholder Meeting (not including abstentions) (the &#147;<B>Company
Shareholder Approval</B>&#148;), is the only vote or approval of the holders of any class or series of share
capital of the Company or any of its Subsidiaries which is necessary to adopt this Agreement and
approve the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.4. <U>Governmental Approvals</U>. Except for (i)&nbsp;the Required Regulatory Consents,
and (ii)&nbsp;the filing of the Merger Notice with the Companies Registrar and the issuance of the
Certificate of Merger by the Companies Registrar, no consents or approvals of, or notices to or
filings, declarations or registrations with, any Governmental Authority are necessary for the
execution, delivery and performance of the Company&#146;s obligations under this Agreement, including
consummation of the Merger.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.5. <U>Company Israeli Documents; Internal Controls; Financial Statements;
Undisclosed Liabilities</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The Company has filed since January&nbsp;1, 2008 all reports, schedules, forms, statements and
other documents required to be filed with the Israeli Securities Authority (the &#147;<B>ISA</B>&#148;) pursuant to
the reporting requirements of the Securities Law, 5728-1968, and the regulations promulgated
thereunder (the &#147;<B>Company Israeli Documents</B>&#148;). As of their respective effective dates, (i)&nbsp;the
Company Israeli Documents complied in all material respects with the requirements of the Israeli
Securities Law, 5728-1968, and the rules and regulations promulgated thereunder (&#147;<B>Israeli
Securities Law</B>&#148;); and (ii)&nbsp;none of the Company Israeli Documents contained any untrue statement of
a material fact or omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The Company is in compliance in all material respects with (i)&nbsp;all applicable listing and
corporate governance rules, regulations and requirements of TASE and (ii)&nbsp;the corporate
governance and other requirements of the Israeli Companies Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Company and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i)&nbsp;all transactions are recorded as necessary to
permit timely preparation of accurate financial statements in conformity with IFRS and to maintain
asset accountability and (ii)&nbsp;the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any material
differences. As of December&nbsp;31, 2010, the internal control of financial reporting and disclosure
of the Company and its Subsidiaries was effective (subject to the qualifications set forth in the
opinion of the Company&#146;s auditor dated March&nbsp;29, 2011 with respect thereto).


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;The Company&#146;s principal executive officer and its principal financial officer have
disclosed, based on their most recent evaluation, to the Company&#146;s auditors and the audit committee
of the Board of Directors of the Company (i)&nbsp;all significant deficiencies in the design or
operation of any internal controls which could adversely affect the Company&#146;s ability to record,
process, summarize and report financial data and have identified for the Company&#146;s auditors any
material weaknesses in internal controls and (ii)&nbsp;any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company&#146;s internal controls. The
Company has made available to Parent (x)&nbsp;a summary of all such disclosures or confirmation of the
absence of the matters described in (i)&nbsp;and (ii)&nbsp;made by the Company&#146;s principal executive officer
and its principal financial officer to the Company&#146;s auditors and audit committee and (y)&nbsp;any
material communication made by management or the Company&#146;s auditors to the audit committee required
or contemplated by applicable listing standards, professional accounting standards or applicable
Laws. No material complaints from any source (whether internal or external) regarding accounting,
internal accounting controls or auditing matters, and, except as set forth in
<U>Section&nbsp;3.5(d)</U> of the Company Disclosure Schedule,&nbsp;no material concerns from the Company&#146;s
or any of its Subsidiaries&#146; employees regarding questionable accounting, auditing or ethical or
legal matters, have been received by the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;With respect to the following financial statements (the &#147;<B>Financial Statements</B>&#148;):


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;the audited consolidated balance sheet of the Company and its Subsidiaries as of
December&nbsp;31, 2009 and December&nbsp;31, 2010 (December&nbsp;31, 2010 being the &#147;<B>Balance Sheet Date</B>&#148;), and the
related audited consolidated statements of income for the annual periods then ended (the &#147;<B>Audited
Financial Statements</B>&#148;); and


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;the consolidated unaudited balance sheet of the Company and its Subsidiaries as of June
30, 2011 (the &#147;<B>Latest Balance Sheet</B>&#148;), and the related unaudited consolidated statement of income
for the six-month period then ended; the consolidated unaudited balance sheet of the Company and
its Subsidiaries as of September&nbsp;30, 2011, and the related unaudited consolidated statement of
income for the nine-month period then ended which are attached as <U>Section&nbsp;3.5(e)(ii) </U>of the
Company Disclosure Schedule; and the Working Capital Statement as of September&nbsp;30, 2011, which is
attached as <U>Section&nbsp;3.5(e)(ii) </U>of the Company Disclosure Schedule (the &#147;<B>Interim
Statements</B>&#148;).


<P align="left" style="font-size: 12pt">The Company has delivered, or caused to be delivered, to Parent correct and complete copies of the
Financial Statements.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;The Audited Financial Statements, the Interim Statements and any quarterly consolidated
financial statements regularly prepared in the ordinary course of business and filed by the Company
with the ISA between the date hereof and the Closing Date, present fairly in all material respects
the financial condition as of the date thereof, or, as applicable, the results of operations of the
Company and its Subsidiaries throughout the periods covered thereby, in each case determined in
accordance with IFRS consistently applied throughout the periods indicated; <U>provided</U>, that
the Latest Balance Sheet and the Interim Statements and any unaudited quarterly consolidated
financial statements prepared after the date hereof may lack footnote disclosure and other
presentation items as is customary for unaudited financial statements, and may not include certain
IFRS adjustments normally booked in conjunction with the year-end audit.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;All books, records and accounts of the Company and its Subsidiaries are complete in all
material respects and are maintained in all material respects in accordance with good business
practice and comply in all material respects with applicable accounting requirements and Laws.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any
nature (whether liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or
otherwise) that are required to be reflected or reserved against on a consolidated balance sheet of
the Company prepared in accordance with IFRS or the notes thereto, except liabilities (i)&nbsp;as and to
the extent reflected or reserved against on the Audited Financial Statements as included in the
Company Israeli Documents filed by the Company with the ISA and publicly available prior to the
date of this Agreement (th<B>e &#147;Filed Company ISA Documents</B>&#148;) or (ii)&nbsp;incurred after the Balance Sheet
Date in the ordinary course of business consistent with past practice.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.6. <U>Absence of Certain Changes or Events</U>. Since the date of the Balance
Sheet Date, there have not been any events, changes, occurrences or state of facts that,
individually or in the aggregate, have had or could reasonably be expected to have a Company
Material Adverse Effect. Except as set forth in <U>Section&nbsp;3.6</U> of the Company Disclosure
Schedule, since the Balance Sheet Date, the Company and its Subsidiaries have carried on and
operated their respective businesses in all material respects in the ordinary course of business
consistent with past practice. Without limiting the foregoing, since the Balance Sheet Date there
has not occurred any material damage to, or destruction or loss of, any material asset of the
Company or any of its Subsidiaries (whether or not covered by insurance).


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.7. <U>Legal Proceedings</U>. <U>Section&nbsp;3.7</U> of the Company Disclosure
Schedule&nbsp;lists each Action currently pending (subject, in the case of investigations, to the
Knowledge of the Company) that involves the Company or any of its Subsidiaries or its or their
respective businesses, properties or assets or that, to the Knowledge of the Company, is threatened
against the Company or any of its Subsidiaries or any of its or their respective businesses,
properties or assets. Except as set forth in <U>Section&nbsp;3.7</U> of the Company Disclosure
Schedule, there is no Action (subject, in the case of investigations, to the Knowledge of the
Company) pending or, to the Knowledge of the Company, threatened against the Company or any
Subsidiary or any of its or their respective businesses, properties or assets, which, individually
or in the aggregate, reasonably could be expected to be material to the Company and its
Subsidiaries taken as a whole. Except as set forth in <U>Section&nbsp;3.7</U> of the Company
Disclosure Schedule, the Company has not received, and does not otherwise have Knowledge of, any
outstanding Orders against, involving or binding upon the Company or any of its Subsidiaries (or
their respective businesses, properties or assets) or any officers or directors of the Company or
any of its Subsidiaries in their capacities as such.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.8. <U>Compliance With Laws; Permits</U>. The Company and its Subsidiaries are, and
at all times since January&nbsp;1, 2008 have been, in compliance in all material respects with all
material Laws applicable to the Company or any of its Subsidiaries, or any of their respective
businesses, properties or assets. No Person employed or acting at the direction or on behalf of
the Company or any of its Subsidiaries has made or offered or promised, directly or indirectly, any
contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment, regardless
of form, whether in money, property or services, to any Person, private or public, in violation of
any Law applicable to the Company or any of its Subsidiaries. Except as set forth on
<U>Section&nbsp;3.8</U> of the Company Disclosure Schedule, all Products manufactured, tested,
developed, distributed or marketed by or on behalf of the Company or any of its Subsidiaries are
and at all times have been manufactured, tested, developed, distributed, and marketed in compliance
with all applicable registration, licensing, notification and other material requirements of all
applicable Laws, in all material respects. Except as set forth on <U>Section&nbsp;3.8</U> of the
Company Disclosure Schedule, the Company and each of its Subsidiaries holds all licenses,
franchises, permits, certificates, approvals and authorizations necessary for the conduct of its
respective business and operations and the ownership and operation of its respective properties and
assets, including without limitation any Food Production Permit and Food Export Sanitation
Registration Certificate required under PRC Laws (collectively, &#147;<B>Permits</B>&#148;), and all such Permits
are in full force and effect, except where the failure to obtain and/or maintain in full force and
effect any such Permit has not and would not, individually or in the aggregate, be reasonably
likely to have a Company Material Adverse Effect. The Company and its Subsidiaries are, and at all
times have been, in compliance in all material respects with the terms of all such Permits. Except
as set forth on <U>Section&nbsp;3.8</U> of the Company Disclosure Schedule, since January&nbsp;1, 2008,
neither the Company nor any of its Subsidiaries has received written notice from any Governmental
Authority (a)&nbsp;claiming or alleging that the Company or any of its Subsidiaries was or is not in
compliance with any Laws or Permits applicable to the Company or any of its Subsidiaries, any of
their properties or other assets or any of their businesses or operations or (b)&nbsp;stating that such
Governmental Authority intends to amend, terminate, revoke, cancel or not renew any Permit.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.9. <U>Information in Immediate Reports</U>. The Signing Immediate Report, the
Shareholders Meeting Immediate Report and any other document (or any amendment thereof or
supplement thereto) required to be mailed to the shareholders of the Company or filed with or
furnished to ISA or TASE in connection with the Merger shall not, at the time of the Company
Shareholder Meeting and at the time mailed to the Company&#146;s shareholders or filed with or furnished
to ISA or TASE, contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; <U>provided</U>, <U>however</U>, that no
representation is made by the Company with respect to any statements made in the Signing Immediate
Report or the Shareholders Meeting Immediate Report based on information supplied in writing by
Parent or Merger Sub specifically for inclusion in such document. The Signing Immediate Report,
the Shareholders Meeting Immediate Report and any documents mailed to the shareholders of the
Company or filed with or furnished to ISA or TASE in connection with the Merger shall comply in all
material respects with all applicable Laws.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.10. <U>Tax Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Except as set forth on <U>Section&nbsp;3.10(a)</U> of the Company Disclosure Schedule, each of
the Company and its Subsidiaries has timely filed, or has caused to be filed on its behalf all Tax
Returns required to be filed in all jurisdictions, and all such filed Tax Returns are correct and
complete in all material respects. All Taxes (whether or not shown on the applicable Tax Returns)
required to be paid by the Company or any of its Subsidiaries have been timely and fully paid.
Except as set forth on <U>Section&nbsp;3.10(a)</U> of the Company Disclosure Schedule, no written claim
has been made by a Tax authority or other Governmental Authority in a jurisdiction where the
Company or any of its Subsidiaries does not or did not file Tax Returns that the Company or any
such Subsidiary was, is or may be subject to Tax or required to file Tax Returns in such
jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The most recent financial statements contained in the Filed Company ISA Documents reflect
an adequate reserve for all Taxes payable by the Company and its Subsidiaries for all taxable
periods and portion thereof through the date of such financial statements, and the Taxes payable by
the Company and its Subsidiaries do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past practice of the Company and its Subsidiaries.
No material deficiency with respect to Taxes has been asserted or assessed against the Company or
any of its Subsidiaries by any Governmental Authority.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;All Tax Returns of the Company and its Subsidiaries have been settled with the Israeli Tax
Authority (the &#147;<B>ITA</B>&#148;) or relevant Governmental Authority (or the applicable statute of limitations
has expired) through the respective years set forth in <U>Section&nbsp;3.10(c)</U> of the Company
Disclosure Schedule. All assessments for Taxes due with respect to such completed and settled
examinations or any concluded litigation have been fully paid. Except as set forth on
<U>Section&nbsp;3.10(c)</U> of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received written notice of any pending or threatened audits, assessments or other
actions for any liability in respect of Taxes of or relating to the Company or any of its
Subsidiaries. Except as set forth on <U>Section&nbsp;3.10(c)</U> of the Company Disclosure Schedule,
there are no matters under discussion with any Governmental Authority, or to the Knowledge of the
Company, threatened, with respect to Taxes that are likely to result in any additional material
liability for Taxes with respect to the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;No notice has been received as to any audit or other administrative or court proceedings
that is pending with any Governmental Authority with respect to Taxes of the Company or any of its
Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Neither the Company nor any of its Subsidiaries will be required to include in a taxable
period ending after the Closing Date taxable income attributable to income that accrued in a prior
taxable period but was not recognized in any prior taxable period, as a result of the installment
method of accounting, the completed contract method of accounting, the long-term contract method of
accounting or the cash method of accounting, change in method of accounting for a previous tax
period, closing agreements executed on or before Closing.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Except as set forth in <U>Section&nbsp;3.10(f)</U> of the Company Disclosure Schedule, the
Company has made available to Parent correct and complete copies of (i)&nbsp;all Tax Returns of the
Company and its Subsidiaries for the preceding three taxable years and (ii)&nbsp;any audit report issued
within the last three years (or otherwise with respect to any audit or proceeding in progress)
relating to Taxes of the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;Except as set forth in <U>Section&nbsp;3.10(g)</U> of the Company Disclosure Schedule, no
Action has been made or taken by any Governmental Authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns such that it is or may be subject to taxation by
that jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;There are no Liens as a result of any unpaid Taxes upon any of the assets of the Company
or its Subsidiaries


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;<U>Section&nbsp;3.10(i)</U> of the Company Disclosure Schedule&nbsp;lists all unpaid grants,
incentives, qualifications and subsidies from the government of the State of Israel or any other
Governmental Authority, or judicial or arbitral body thereof, and any outstanding application to
receive the same filed by the Company or any of its Subsidiaries, including, any material Tax or
other incentive granted to or enjoyed by the Company and its Subsidiaries under the Laws of the
State of Israel or of any other jurisdiction applicable to the Company or any of its Subsidiaries
(collectively, &#147;<B>Government Grants</B>&#148;). The Company has provided to Parent copies of all pending
applications for Government Grants and of all letters of approval and rulings issued as well as
supplements thereto. <U>Section&nbsp;3.10(i)</U> of the Company Disclosure Schedule&nbsp;details all
undertakings of the Company or any of its Subsidiaries given in connection with the Government
Grants, other than those prescribed by Law. The Company and its Subsidiaries have complied in all
material respects with all requirements of applicable Law and any Tax ruling issued to the Company
or any of its Subsidiaries by any Governmental Authority (the &#147;<B>Government Grants Rulings</B>&#148;) to be
entitled to claim all of the Government Grants. The Company and each of its Subsidiaries, as
applicable, is in compliance, in all material respects, with the terms and conditions of the
Government Grants and the Government Grants Rulings, and has fulfilled, in all material respects,
all undertakings relating thereto. The Company is not aware of any event or other set of
circumstances (including with respect to the Transactions) that might lead to the revocation or
material modification of any of the Government Grants.


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;Except as set forth in <U>Section&nbsp;3.10(j)</U> of the Company Disclosure Schedule, no
closing agreements, private letter rulings, tax decision or ruling issued by the ITA, technical
advice memoranda or similar agreements or rulings relating to Taxes have been entered into or
issued by any Governmental Authority with or in respect of the Company or any of its Subsidiaries
or any of their respective businesses, properties or assets. Except as set forth in
<U>Section&nbsp;3.10(j)</U> of the Company Disclosure Schedule, neither the Company nor any Subsidiary
has requested (whether or not granted) or received a closing agreement, private letter ruling, tax
decision or similar agreements or other Tax ruling from any Governmental Authority. The Company
has made available to Parent accurate and complete copies of any Tax ruling obtained by the Company
or any of its Subsidiaries from the ITA or other Governmental Authority and all applications
therefor, including with respect to Options. Each of the Company and its Subsidiaries has not
waived any statute of limitations with respect to Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;The Company and each of its Subsidiaries has duly collected all amounts on account of any
sales transfer Taxes or VAT, including goods and services, harmonized sales and provincial or
territorial sales Taxes, required by Law to be collected by it, and has duly and timely remitted to
the appropriate Governmental Authority any such amounts required by Law to be remitted by it.


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;Neither the Company nor any of its Subsidiaries has refunded or deducted any amount of VAT
that it was not entitled to deduct or refund.


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;There are no Liens (other than Permitted Exceptions) for Taxes (other than Taxes not yet
due or payable or for Taxes that are both (i)&nbsp;being contested in good faith by appropriate
proceedings; and (ii)&nbsp;for which sufficient reserves have been made on the Company&#146;s Financial
Statements) upon the assets of the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(n)&nbsp;Neither the Company nor any of its Subsidiaries is subject to any restrictions or
limitations pursuant to Part&nbsp;E2 of the Ordinance or pursuant to any tax ruling made in connection
with the provisions of Part&nbsp;E2 of the Ordinance.


<P align="left" style="font-size: 12pt; text-indent: 8%">(o)&nbsp;Neither the Company nor any of its Subsidiaries has requested or received a ruling from
any Tax authority or signed a closing or other agreement with any Tax Authority other than the
rulings requested or received in connection with the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 8%">(p)&nbsp;The Company and each of its Subsidiaries has withheld and paid all material Taxes required
to have been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other Person.


<P align="left" style="font-size: 12pt; text-indent: 8%">(q)&nbsp;Except as set forth in <U>Section&nbsp;3.10(q)</U> of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries is a party to or bound by any Tax indemnity, Tax sharing or
Tax allocation agreement or arrangement. Neither the Company nor any of its Subsidiaries, or any
predecessor thereof, has been a member of a group (including an Affiliated Group) with which it has
filed or been included in a combined, consolidated or unitary income Tax Return.


<P align="left" style="font-size: 12pt; text-indent: 8%">(r)&nbsp;All books and records which the Company or any Subsidiary is required to keep under
applicable Tax Laws have been duly kept in accordance with all applicable requirements of Law and
are available for inspection at the premises of the Company or relevant Subsidiary or at outside
archives used by the Company.


<P align="left" style="font-size: 12pt; text-indent: 8%">(s)&nbsp;Neither the Company nor any of its Subsidiaries has undertaken any transaction which
requires special reporting in accordance with Section&nbsp;131(g) of the Israeli Income Tax Ordinance
and the Israeli Income Tax Regulations (Tax Planning Requiring Reporting), 2006.


<P align="left" style="font-size: 12pt; text-indent: 8%">(t)&nbsp;Neither the Company nor any of its Subsidiaries has engaged in any &#147;listed transaction&#148;
within the meaning of Treasury Regulations section 1.6011-4(b)(2) or any predecessor regulation
under the Code, and each of the Company and its Subsidiaries has properly disclosed in its Tax
Returns all &#147;reportable transactions&#148; within the meaning of Treasury Regulations section
1.6011-4(b)(1), any predecessor regulation or any similar provision of any applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(u)&nbsp;Neither the Company nor any of its Subsidiaries is or has ever been a United States real
property holding corporation (as defined in section 897(c)(2) of the Code).


<P align="left" style="font-size: 12pt; text-indent: 8%">(v)&nbsp;There is no agreement, plan, arrangement or other contract covering any current or former
employee or independent contractor of the Company or any of its Subsidiaries that, considered
individually or considered collectively with any other such contract, will, or could reasonably be
expected to, give rise directly or indirectly to the payment of any amount that would not be
deductible pursuant to section 280G of the Code.


<P align="left" style="font-size: 12pt; text-indent: 8%">(w)&nbsp;Neither the Company nor any Subsidiary is or ever has been a party to a transaction or
agreement that is in conflict with the Tax rules on transfer pricing in any relevant jurisdiction.
The Company and each Subsidiary has maintained documentation (including any applicable transfer
pricing studies) in connection with any related party transactions in accordance with Section&nbsp;85 of
the Israeli Tax Ordinance and any comparable provisions of any other applicable Tax Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(x)&nbsp;Neither the Company nor any of its Subsidiaries is, nor at any time has ever been, treated
as resident in or having a permanent establishment or otherwise being deemed to be doing business
in any manner (including, but not limited to, activities of or through employees, independent
contractors, licensees, resellers, or any other services or representative relationship or by or
through any entities, facilities, offices, or places of business) in any jurisdiction other than
their country of incorporation or formation for purposes of any Taxes (including but not limited to
the application or potential application of any double taxation arrangement or Tax treaty).


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.11. <U>Employee Benefits and Labor Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Section&nbsp;3.11(a)(i)</U> of the Company Disclosure Schedule&nbsp;sets forth a correct and
complete list of each Company Plan, other than employment agreements, and identifies whether such
Company Plan applies to employees of the Company or only a specific Subsidiary thereof.
<U>Section&nbsp;3.11(a)(ii)</U> of the Company Disclosure Schedule&nbsp;sets forth a correct and complete
list of all current consultants, sales agents and other independent contractors who spend (or since
January&nbsp;1, 2008 spent) fifty percent or more of their working time on the business of the Company
or any of its Subsidiaries, other than persons who worked less than six months cumulatively for the
Company or its Subsidiaries and no longer work for the Company or its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Correct and complete copies of the following documents with respect to each of the Company
Plans have been delivered to Parent by the Company to the extent applicable: (i)&nbsp;the plan document
(other than employment agreements), and related trust documents, custodial, or insurance contracts
or other funding arrangements (or if such Company Plan is not written, an accurate description of
the material terms thereof), and all amendments thereto; (ii)&nbsp;summary plan descriptions,&nbsp;employee
manuals and handbooks; (iii)&nbsp;any written policies or procedures used in Company Plan
administration; (iv)&nbsp;any service agreements; (v)&nbsp;a summary of any dues the Company or its
Subsidiaries pays to any employer organization (vi)&nbsp;any current regulatory approvals regarding the
tax favored status of any Company Plan (including, but not limited to, any Internal Revenue Service
determination, opinion, or advisory letter); and (vii)&nbsp;any compliance or corrective filing made
with an applicable regulatory authority regarding a Company Plan for the past three years
(including, but not limited to, the Form&nbsp;5500 filings for any Company Plan subject to such filing
requirements).


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Company Plans have been established and maintained in compliance in all material
respects with their terms and with the requirements prescribed (whether as a matter of substantive
law or as necessary to secure favorable tax treatment) by all applicable provisions of the
Ordinance and other Laws. No event has occurred with respect to the operation of the Company Plans
and no circumstance exists that could cause the loss of such qualification or exemption, or the
imposition of any liability, penalty, Lien or Tax under the Ordinance or any other applicable Laws.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;The Company has not employed or retained any employees whose employment would require
special licenses, approvals or permits (such as foreign employees). There are no unwritten Company
policies which, by extension, could entitle employees to benefits in addition to what they are
entitled by Law or Contract. Except as set forth on <U>Section&nbsp;3.11(d)</U> of the Company
Disclosure Schedule, there are no compensation increments or components that are wrongly classified
(or not accounted for) as such with respect to applicable Tax Laws and are required to be
reclassified as salary components. The Company has properly implemented and has applied, as of the
commencement date of employment, all terms relating to the terms of its employees&#146; employment in
all material respects.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;With respect to each Company Plan for which a separate fund of assets is required to be
maintained, full and timely payment has been made or, to the extent permitted by applicable Law,
reserved in the Financial Statements in accordance with IFRS of all amounts required of the
Company, under the terms of each such Company Plan or applicable Law (determined without regard to
any waiver of legally applicable funding requirements). Except as set forth on
<U>Section&nbsp;3.11(e)</U> of the Company Disclosure Schedule, none of the assets of any Company Plan
include any share capital or other securities issued by the Company. To the extent any
contribution or payment by the Company has accrued but is not required under applicable Laws to be
made with respect to any Company Plan on or prior to June&nbsp;30, 2011, such contribution or payment
has been reflected on the Latest Balance Sheet. All amounts due or accrued for all salary, wages,
bonuses, commissions, vacation and sick days have been remitted and paid (or reserved for in the
Company&#146;s books in accordance with IFRS) in accordance with all applicable Laws and the material
terms of any applicable Company Plan, and no taxes, penalties or fees are owing under or in respect
of any Company Plan other than in the ordinary course. The Company and its Subsidiaries have paid
all outstanding material liabilities, fees, expenses and obligations due and payable with respect
to any Company Plan to its employees, consultants, independent contractors, agents, directors,
officers and any other Person who provides or has provided services to the Company or any of its
Subsidiaries with respect to any Company Plan.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;With respect to each Company Plan and fiduciary or service provider thereof: (i)&nbsp;no
Action by or before any Governmental Authority is pending or, to the Knowledge of the Company,
threatened and (ii)&nbsp;no other Action is pending, or to the Knowledge of the Company, threatened, by
any participant or beneficiary of any Company Plan, other than routine claims for benefits in the
ordinary course. To the Knowledge of the Company, there are no facts that could form a reasonable
basis for any material Action with respect to any Company Plan and fiduciary or service provider
thereof. All amounts that the Company or any of its Subsidiaries is legally or contractually
required, pursuant to Israeli Law, (A)&nbsp;to deduct from employees&#146; salaries, (B)&nbsp;to transfer to
employees&#146; pension arrangements, provident funds and Insurances, (C)&nbsp;to withhold from employees&#146;
salaries and benefits and (D)&nbsp;to pay to any Governmental Authority as required by the Ordinance,
the National Insurance Law and the National Health Insurance Law of Israel or otherwise, have, in
each case, been duly deducted, transferred, withheld and paid, and neither the Company nor any of
its Subsidiaries has any outstanding obligations to make any such deduction, transfer, withholding
or payment other than with respect to those which have accrued but are not yet due and payable in
the ordinary course of business.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;None of the Company Plans provide for post-employment welfare benefits for any participant
or beneficiary. The Company has complied with the notice and continuation-coverage requirements of
Code Section&nbsp;4980B and the regulations thereunder with respect to each Company Plan that is subject
to ERISA and also a group health plan (within the meaning of Code Section&nbsp;5000(b)(1)).


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Except as set forth on <U>Section&nbsp;3.11(h)</U> of the Company Disclosure Schedule, neither
the execution and delivery of this Agreement nor the consummation of the Transactions shall
(i)&nbsp;result in any payment (whether of severance pay or otherwise) or benefit becoming due to any
current or former employee, director, sales agent, consultant, independent contractor or any other
Person, (ii)&nbsp;increase any benefits otherwise payable (or the number of individuals entitled to
benefits) under any Company Plan, (iii)&nbsp;accelerate the time of payment, funding or vesting of any
benefits under any Company Plan, except as may be required by Law, (iv)&nbsp;require any contributions
or payments to fund any obligations under any Company Plan, or (v)&nbsp;limit the right to merge, amend
or terminate any Company Plan.


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;Except as set forth on <U>Section&nbsp;3.11(i)</U> of the Company Disclosure Schedule, no
employees of the Company or its Subsidiaries are or have been represented by any labor union, labor
organization or any other type of employee representative or representative body. Neither the
Company nor any of its Subsidiaries has recognized any labor union or labor organization, nor has
any labor union or labor organization been elected as the collective bargaining agent of any
employees. Except as set forth on <U>Section&nbsp;3.11(i)</U> of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is a party to, otherwise bound by, negotiating or
is subject to any liability under any collective bargaining agreement, collective labor, works
council, or similar agreement or arrangement or union contract recognizing any labor organization
as the bargaining agent of any employees, other than Extension Orders applicable to employees
generally or to the employees employed in the industries in which the Company and its Subsidiaries
operate. To the Knowledge of the Company and except as set forth on <U>Section&nbsp;3.11(i</U>) of the
Company Disclosure Schedule, there has not been since January&nbsp;1, 2008 any union organization or
collective bargaining activity involving any employees of the Company or any of its Subsidiaries.
Except as set forth on <U>Section&nbsp;3.11(i)</U> of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a member in any employers&#146; association or organization that
represents employers or bargains on behalf of employers in setting the terms or conditions of
employment for employees, and no such association or organization has made or, to the Knowledge of
the Company, intends to make, any demand for payment of any kind from the Company. There are and,
since January&nbsp;1, 2008, there have not been any picketing, strikes, slowdowns, work stoppages, other
job actions, lockouts, arbitrations, grievances, unfair labor practice charges or complaints, or
other labor disputes involving any of the employees of the Company or any of its Subsidiaries or,
to the Knowledge of the Company, threatened.


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;Except as set forth on <U>Section&nbsp;3.11(j</U>) of the Company Disclosure Schedule, the
Company and its Subsidiaries are in compliance with and have complied in all material respects with
all Laws relating to labor and employment and Taxes, and all Contracts, termination notices, and
obligations, collective bargaining agreements or arrangements, whether contractual or otherwise
legally required relating to the terms of the employees&#146; employment therewith, all obligations
imposed by Contract and all Laws relating to wage and hour, vacation, severance, employment of
women, collective agreements and arrangements, collective bargaining, discrimination, civil rights,
fair employment practices, the proper classification of employees and independent contractors,
employees of manpower contractors, immigration, pay equity, safety and health, privacy, workers&#146;
compensation and the collection and payment of withholding and/or social security Taxes and any
similar Tax, and the keeping of records in relation to the foregoing. Except as set forth in
<U>Section&nbsp;3.11(j)</U> of the Company Disclosure Schedule, there has been no collective
redundancy, mass layoff, plant closing or similar action with respect to the Company or any of its
Subsidiaries. Except as set forth in <U>Section&nbsp;3.11(j)</U> of the Company Disclosure Schedule,
no (i)&nbsp;officer, or (ii)&nbsp;executive has been dismissed in the 24&nbsp;months immediately prior to the date
of this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;Except as set forth on <U>Section&nbsp;3.11(k)</U> of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries engages or employs manpower employees, leased employees,
contract workers or other temporary workers or any minors.


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;All Options and Company Share Plans have been appropriately authorized by the Board of
Directors of the Company (or an appropriate committee thereof) and the shareholders of the Company,
to the extent required under applicable Law. Without limiting any other representation in this
Agreement, the Options treated as Company 102 Securities are in compliance with Section&nbsp;102 of the
Ordinance and the regulations promulgated thereunder.


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;Except as provided in <U>Section&nbsp;3.11(m)</U> of the Company Disclosure Schedule, since
January&nbsp;1, 2008, there has not been, nor are there currently, any investigations, inquiries, audits
or other proceedings conducted by or on behalf of the Company or any of its Subsidiaries, the Board
of Directors or any committee of the Board of Directors of the Company or any of its Subsidiaries
(or any Person at the request of any of the foregoing) concerning any financial, accounting, Tax,
conflict of interest, illegal activity, fraudulent or deceptive conduct, discrimination or
harassment, or wage and hour practices with respect to any current or former director, officer,
advisor, consultant or employee of the Company or any of its Subsidiaries which, if determined
adversely, would reasonably be expected to result in material liability (including as a result of
adverse impact to reputation) to the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(n)&nbsp;<U>Section&nbsp;3.11(n)</U> of the Company Disclosure Schedule&nbsp;sets forth a correct and
complete list as of June&nbsp;30, 2011 of all employees of the Company or any of its Subsidiaries, and
all consultants and independent contractors who spend fifty percent or more of their working time
on the business of the Company or any of its Subsidiaries, other than persons who worked less than
six months cumulatively for the Company or its Subsidiaries and no longer work for the Company or
its Subsidiaries, each identified by specific location, employer of record, exempt or non-exempt
status, specific exemption for exempt employees and their respective current benefits (including
salary, share options, pension, vacation entitlement, prior notice to terminate, fringe benefits,
car maintenance or car entitlements, bonuses, commissions and incentive compensation), job title,
length of time remaining on employment term, termination benefits, and date of hire, entitlement to
pension arrangement and any other provident fund (including manager&#146;s insurance, pension fund and
education fund), respective contribution rates and the salary basis for such contributions, and
whether there are any confidentiality, assignment of intellectual property, non-competition or
non-solicitation covenants applicable to such employees, consultants and independent contractors.


<P align="left" style="font-size: 12pt; text-indent: 8%">(o)&nbsp;Except as set forth in <U>Section&nbsp;3.11(o)</U> of the Company Disclosure Schedule, since
January&nbsp;1, 2008, neither the Company nor any of its Subsidiaries has received written notice of any
pending or threatened complaints, charges, claims, investigations, audits or agency proceedings
against the Company or any of its Subsidiaries or involving any former or current employee or
independent contractor of the Company before any Governmental Authority, and there are no
complaints, charges, claims, disputes, investigations, audits or agency proceedings filed, pending
or, to the Company&#146;s Knowledge, threatened before any Governmental Authority based on, arising out
of, in connection with or otherwise relating to the labor and employment practices of the Company,
including all obligations imposed by Contract and all applicable Laws relating to wage and hour,
vacation, collective bargaining, discrimination, civil rights, fair employment practices, the
proper classification of employees or independent contractors, immigration, pay equity, safety and
health, workers&#146; compensation and the collection and payment of withholding and/or social security
Taxes or any similar Tax, or the keeping of records in relation to the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 8%">(p)&nbsp;Except as set forth on <U>Section&nbsp;3.11(p)</U> of the Company Disclosure Schedule,
(i)&nbsp;each employee&#146;s employment is terminable for convenience at any time, without any amounts being
owed to such individual other than entitlements required by Law, (ii)&nbsp;no employee of the Company or
any of its Subsidiaries is on disability or other extended leave of absence, and (iii)&nbsp;each
consulting or independent contractor agreement with the Company or any of its Subsidiaries can be
terminated immediately and without penalty, with no more than 30 calendar days prior notice period.


<P align="left" style="font-size: 12pt; text-indent: 8%">(q)&nbsp;Each Company Plan (i)&nbsp;if intended to qualify for special tax treatment, meets all
requirements for such treatment; (ii)&nbsp;with respect to all contributions required to be made by the
Company or a Subsidiary, is fully funded or has been properly accrued for on the Financial
Statements; and (iii)&nbsp;if required to be registered or filed, has been registered or filed with the
appropriate regulatory authorities and has been maintained in good standing with the appropriate
regulatory authorities.


<P align="left" style="font-size: 12pt; text-indent: 8%">(r)&nbsp;The Company&#146;s liability and each of its Subsidiaries&#146; liability with respect to any
severance payment obligation is fully funded or properly accrued in its books in accordance with
IFRS.


<P align="left" style="font-size: 12pt; text-indent: 8%">(s)&nbsp;To the Company&#146;s Knowledge, no employee, consultant, director or officer of the Company or
any of its Subsidiaries is in material violation of any term of any employment contract,
confidentiality, non-competition, non-solicitation or proprietary rights agreement or other
agreement relating to the right of such individual to be employed by, or provide services to, the
Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(t)&nbsp;<U>Section&nbsp;3.11(t)</U> of the Company Disclosure Schedule&nbsp;sets forth a list of all
employees of the Company and its Subsidiaries whose employment terms are not reduced to writing and
are based primarily or exclusively on action taken by the Board of Directors (or applicable
governing body) of the Company or its Subsidiaries, as applicable. Except as set forth on
<U>Section&nbsp;3.11(t)</U> of the Company Disclosure Schedule, no such employee is entitled to any
material right, benefit or compensation as a result of their employment by the Company or its
Subsidiaries or the termination thereof.


<P align="left" style="font-size: 12pt; text-indent: 8%">(u)&nbsp;At no time in the past has the Company or its Subsidiaries (or any trade or business that
is in a controlled group of corporations or under common control with the Company or its
Subsidiaries within the meaning of Code section 414) (i)&nbsp;maintained or made any contributions to
any employee pension benefit plan that is subject to Title IV of the ERISA, or (ii)&nbsp;maintained or
had any obligation to contribute to a &#147;multiemployer plan&#148; within the meaning of Section&nbsp;3(37) of
ERISA that is subject to ERISA. No Company Plan that is subject to ERISA is a &#147;multiple employer
welfare arrangement&#148; within the meaning of Section&nbsp;3(40) of ERISA.


<P align="left" style="font-size: 12pt; text-indent: 8%">(v)&nbsp;Any Company Plan covering U.S employees that is a nonqualified deferred compensation plan
subject to the requirements of Code Section&nbsp;409A complies in form with the requirements of Code
Section&nbsp;409A and has been operated in compliance with such requirements.


<P align="left" style="font-size: 12pt; text-indent: 8%">(w)&nbsp;For each Employee of the PRC Sub (each a &#147;PRC Employee&#148;), the PRC Sub has entered into a
written employment contract with such employee starting from the first day when such employee
commenced work with the PRC Sub, which contract is in form and substance fully complying with the
PRC Laws relating to employment and labor practices, and there is no PRC Employee who may claim
monetary damages or other penalties against the PRC Sub for failure to enter into employment
contract within applicable statutory timeframe. The employment agreement for each PRC Employee is
valid for a fixed term as indicated in Section&nbsp;3.11(n) of the Company Disclosure Schedule and there
is no open term employment contract existing between the PRC Sub and any PRC Employee nor is there
any PRC Employee who may claim that he or she is eligible to require an open term contract by
operation of PRC Law. All expatriates working with the PRC Sub have completed all required
procedures and secured necessary work visa and work permits for working mandated by the PRC
Governmental Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.12. <U>Environmental Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Each of the Company and its Subsidiaries has been in compliance, in all material respects,
with all applicable Environmental Laws. Except as set forth on <U>Section&nbsp;3.12(a)</U> of the
Company Disclosure Schedule, there is no Action relating to or arising under Environmental Laws or
relating to a Release or threatened Release of or exposure to Hazardous Materials or potentially
contaminating materials that is pending or, to the Knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any real property owned, occupied, operated, or
leased by the Company or any of its Subsidiaries at any time since January&nbsp;1, 2008, that
reasonably could result in Environmental Liabilities in excess of $50,000 for any such Action or
$150,000 for all such Actions in the aggregate. Except as set forth on <U>Section&nbsp;3.12(a)</U> of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has received any
notice of or entered into or assumed by Contract or operation of Law or otherwise, any obligation,
indemnification, liability, order, settlement, judgment, injunction or decree relating to or
arising under Environmental Laws, except for customary representations and undertakings under
Company Contracts that the Company does not and will not violate Environmental Laws. Neither the
Company nor any of its Subsidiaries has caused or allowed the Release of or exposure to any Person
of any Hazardous Materials in such manner so as to create any Environmental Liabilities to the
Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Except as set forth on <U>Section&nbsp;3.12(b)</U> of the Company Disclosure Schedule, none of
the properties currently owned, occupied, operated or leased by the Company or any of its
Subsidiaries, to the Knowledge of the Company, contain or have ever contained any underground
storage tanks, landfills, dumps, surface impoundments, wastewater lagoons, underground injection
wells, waste disposal areas, asbestos or asbestos-containing materials, polychlorinated biphenyls
or other Hazardous Materials. Except as set forth in<U> Section&nbsp;3.12(b)</U>, no facts,
circumstances or conditions exist with respect to the Company or any of its Subsidiaries or any
property owned, occupied, operated or leased by the Company or any of its Subsidiaries at any time
since January&nbsp;1, 2008 (including any property to or at which the Company or any of its Subsidiaries
held, handled, transported or arranged for the disposal or treatment of Hazardous Materials) that
could reasonably be expected to result in the Company or any of its Subsidiaries incurring
Environmental Liabilities or that reasonably could prevent, hinder or limit the Company&#146;s operation
in any material manner and/or could require expenditures of more than $250,000 to ensure continued
compliance with Environmental Laws.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Company has provided or made available to Parent copies of all reports,
correspondences, studies and all data and records in its possession or reasonable control which
describe or relate to Hazardous Materials present at, in or around any property owned, occupied,
operated, leased or used by the Company or any of its Subsidiaries at any time since January&nbsp;1,
2008 (including their respective successors), including, but not limited to, any Phase I, Phase II
or Phase III Environmental Site Assessment or similar assessments of environmental conditions at,
in or around such property. Except as set forth on <U>Section&nbsp;3.12(c)</U> of the Company
Disclosure Schedule, the Company has not received any reports or studies indicating the presence of
Hazardous Materials at, in or around any property owned, occupied, operated, leased or used by the
Company or any of its Subsidiaries at any time since January&nbsp;1, 2008 as a result of which the
Company or its Subsidiaries may be liable for any material Environmental Liabilities.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.13. <U>Contracts</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Set forth in <U>Section&nbsp;3.13(a)</U> of the Company Disclosure Schedule&nbsp;is a list of
(i)&nbsp;each Contract that would be required to be publicly disclosed under any Israeli Securities Law
and (ii)&nbsp;each of the following to which the Company or any of its Subsidiaries is a party or by
which they are bound:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;Contracts that purport to limit, curtail or restrict the ability of the Company or any of
its existing or future Subsidiaries or Affiliates to compete in any geographic area or line of
business or restrict the activity of any Persons to whom the Company or any of its existing or
future Subsidiaries or Affiliates may sell products or deliver services;


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;partnership or joint venture agreements;


<P align="left" style="font-size: 12pt; text-indent: 12%">(iii)&nbsp;Contracts for the acquisition or sale or lease of material property or assets or shares
or business (including without limitation by merger, purchase or sale of stock or assets) entered
into since January&nbsp;1, 2008;


<P align="left" style="font-size: 12pt; text-indent: 12%">(iv)&nbsp;loan or credit agreements, mortgages, indentures, notes or other Contracts or instruments
evidencing indebtedness for borrowed money or any Contracts or instruments pursuant to which
indebtedness for borrowed money may be incurred or is or may be guaranteed by the Company or any of
its Subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 12%">(v)&nbsp;financial derivatives master agreements or confirmation or futures account opening
agreements, evidencing financial hedging or similar trading activities (&#147;<B>Derivative Agreements</B>&#148;)
other than in the ordinary course of business;


<P align="left" style="font-size: 12pt; text-indent: 12%">(vi)&nbsp;voting, shareholders, investor rights, preemptive rights, or similar agreements or
registration rights agreements to which the Company or its Subsidiaries are a party or of which the
Company has Knowledge, and Contracts with officers, directors or &#147;controlling shareholders&#148; of the
Company (as this term is defined in the Israeli Companies Law), or officers, directors or
shareholders of its Subsidiaries, excluding in each case intercompany Contracts between or among
the Company and its Subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 12%">(vii)&nbsp;mortgages, pledges, security agreements, deeds of trust or other Contracts granting or
creating a Lien (other than a Permitted Exception) on any material property or assets of the
Company or any of its Subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 12%">(viii)&nbsp;customer, client, sales representative, distributor or supplier Contracts that involved
consideration (whether or not in the form of cash) in fiscal year 2010 in excess of $100,000
(excluding individual purchase orders that do not involve consideration of $500,000 or more) or
that is reasonably likely in the ordinary course of business to involve consideration (whether or
not in the form of cash) in fiscal year 2011 in excess of $100,000;


<P align="left" style="font-size: 12pt; text-indent: 12%">(ix)&nbsp;Contracts (other than customer, client, sales representative, distributor or supplier
Contracts) that commit the Company or its Subsidiaries to pay (or entitles the Company or its
Subsidiaries to receive) or is reasonably likely in the ordinary course of business to result in
total consideration (whether or not in the form of cash) greater than $100,000;


<P align="left" style="font-size: 12pt; text-indent: 12%">(x)&nbsp;Contracts that obligate the Company or its Subsidiaries to buy or construct a capital
asset with a purchase price or construction cost greater than $100,000 and any Contract that
contains a put, call or similar right pursuant to which the Company or any of its Subsidiaries
could be required to purchase or sell, as applicable, any equity interests of any Person or assets
that have a fair market value or purchase price of more than $50,000;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xi)&nbsp;employment, consulting, severance, retention, non-solicitation and non-competition
agreements with any director, employee, officer or individual consultant (other than at-will
employment letters or agreements or consulting agreements that may be terminated on 30&nbsp;days notice
or less without any payment or penalty or any other obligation of the Company or its Subsidiaries
after the date of termination) to the extent payments (other than payments for services rendered)
are or could be owing thereunder to such individual on or after the Closing Date;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xii)&nbsp;any material settlement agreement with any Person with respect to which payments are or
may be owing on or after the Closing Date or any settlement agreements with any Governmental
Authority;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xiii)&nbsp;agreements that provide for &#147;earn outs&#148; or other contingent payments or other
agreements relating to the acquisition or disposition by the Company or any of its Subsidiaries of
any operating business or group of assets under which the contractual payment obligations
thereunder (including any reimbursement, indemnification or contribution obligations) have not been
satisfied in full or will remain outstanding on or after the Closing Date;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xiv)&nbsp;Contracts containing minimum purchase requirements in excess of $100,000 on the part of
the Company or any of its Subsidiaries in any 12&nbsp;month period;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xv)&nbsp;Contracts with customers or suppliers containing &#147;most favored nation&#148; or discount
pricing or any refund provisions;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xvi)&nbsp;&#147;standstill&#148; or similar agreements;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xvii)&nbsp;Contracts that require or restrict or otherwise limit the payment of dividends or other
distributions;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xviii)&nbsp;any Contract between the Company or any of its Subsidiaries and any Related Person;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xix)&nbsp;any Contract with any Governmental Authority or agency of the government in Israel,
United States or China;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xx)&nbsp;any Contract pursuant to which the Company or any Subsidiary grants or obtains the right
to use Intellectual Property requiring annual payments to or from the Company or its Subsidiaries
in excess of $100,000 or any Contract relating to Intellectual Property which is otherwise material
to the conduct of the Company and/or its Subsidiaries&#146; businesses as currently conducted;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xxi)&nbsp;Contracts that expressly provide for material indemnification or contribution
obligations of the Company or its Subsidiaries (other than general warranty obligations,
non-disclosure agreements or Contracts entered into in the ordinary course of business with
customers, distributors and suppliers) and not otherwise listed pursuant to another item in this
<U>Section&nbsp;3.13</U>;


<P align="left" style="font-size: 12pt; text-indent: 12%">(xxii)&nbsp;any other Contract, to the extent material to the business or financial condition of
the Company and its Subsidiaries, taken as a whole, including without limitation: (A)&nbsp;lease or
rental Contracts, (B)&nbsp;sales representative or distribution Contracts, (C)&nbsp;Contracts granting a
right of first refusal or first negotiation that will be in effect following the Closing and (D)
any other Contract required to be listed in the Company&#146;s annual report filed with the ISA with
respect to the year ended December&nbsp;31, 2010; and


<P align="left" style="font-size: 12pt; text-indent: 12%">(xxiii)&nbsp;commitments or agreements to enter into any of the foregoing.


<P align="left" style="font-size: 12pt">(The Contracts and other documents required to be listed on <U>Section&nbsp;3.13(a)</U> of the Company
Disclosure Schedule, each a &#147;<B>Material Contract</B>&#148;). It is acknowledged that Contracts or documents
relating to the PRC Sub which qualify as Material Contracts are included under the definition of
Material Contracts for all intents and purposes although they are not listed as Material Contracts
in the Company Disclosure Schedule.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The Company has made available to Parent correct and complete copies of each Material
Contract together with any and all amendments and supplements thereto. Except as set forth in
<U>Section&nbsp;3.13(b)</U> of the Company Disclosure Schedule, each Material Contract that is not
marked in <U>Section&nbsp;3.13(a)</U> of the Company Disclosure Schedule as a terminated agreement, is
valid, binding and in full force and effect and is enforceable in accordance with its terms by the
Company and its Subsidiaries that are parties thereto, subject only to the Bankruptcy and Equity
Exception. Except as set forth in <U>Section&nbsp;3.13(b)</U> of the Company Disclosure Schedule, no
approval, consent or waiver of any Person is needed in order that each and every Material Contract
shall continue in full force and effect following the consummation of the Transactions. Except as
set forth in <U>Section&nbsp;3.13(b)</U> of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries is in default in any material respect under any Material Contract or other
Contract to which the Company or any of its Subsidiaries is a party (collectively, the &#147;<B>Company
Contracts</B>&#148;), nor, to the Knowledge of the Company, does any condition exist that, with notice or
lapse of time or both, reasonably could constitute such a default thereunder by the Company or its
applicable Subsidiaries party thereto, except for such defaults as would not reasonably be expected
to constitute a Company Material Adverse Effect. To the Knowledge of the Company and except as set
forth in <U>Section&nbsp;3.13(b)</U> of the Company Disclosure Schedule, no other party to any Company
Contract is in default thereunder, nor does any condition exist that with notice or lapse of time
or both reasonably could constitute a default by any such other party thereunder. Neither the
Company nor any of its Subsidiaries has (i)&nbsp;received any notice of termination or cancellation of
(or of any intent not to renew) any Material Contract or, since the Balance Sheet Date, any
cancellation of any order with a value in excess of $100,000 under any Material Contract,
(ii)&nbsp;received any notice of breach or default in any material respect under any Material Contract
which breach has not been cured, or (iii)&nbsp;granted to any third party any rights, adverse or
otherwise, that would constitute a breach or violation of any Material Contract.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.14. <U>Real Property</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Section&nbsp;3.14(a)</U> of the Company Disclosure Schedule&nbsp;sets forth a complete list of
(i)&nbsp;all real property and interests in real property, including improvements thereon and easements
appurtenant thereto, owned by the Company or any of its Subsidiaries (individually, an &#147;<B>Owned
Property</B>&#148; and collectively, the &#147;<B>Owned Properties</B>&#148;), (ii)&nbsp;all real property and interests in real
property leased or licensed by the Company or any of its Subsidiaries (individually, a &#147;<B>Real
Property Lease</B>&#148; and collectively, the &#147;<B>Real Property Leases</B>&#148; and, together with the Owned
Properties, being referred to herein individually as a &#147;<B>Company Property</B>&#148; and collectively as the
&#147;<B>Company Properties</B>&#148;) as lessee or lessor, including a description of the current use thereof
(including the name of the third party lessor or lessee and the date of the lease or sublease and
all amendments thereto). The Company and its applicable Subsidiaries have good and marketable
title to all Owned Property, free and clear of all Liens of any nature whatsoever, except (A)&nbsp;those
Liens set forth on <U>Section&nbsp;3.14(a)</U> of the Company Disclosure Schedule&nbsp;and (B)&nbsp;any Permitted
Exceptions. The Company Properties constitute all interests in real property used, occupied or
held for use in connection with the business of the Company and its Subsidiaries as currently
conducted. All of the Company Properties and any buildings, fixtures and improvements thereon
(i)&nbsp;are in good operating condition (subject to normal wear and tear) and (ii)&nbsp;are suitable,
sufficient and appropriate in all material respects for their current and proposed uses. The
Company has delivered to Parent true, correct and complete copies of (x)&nbsp;all deeds, title reports
and surveys for the Owned Properties and (y)&nbsp;all Real Property Leases, together with all
amendments, modifications or supplements thereto. Except for the Real Property Leases set forth on
<U>Section&nbsp;3.14(a)</U> of the Company Disclosure Schedule, the Company Properties are not subject
to any leases or any rights of first refusal, options to purchase or rights of occupancy.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;None of the Company or any Subsidiary has received any notice from any insurance company
that has issued a policy with respect to any Company Property requiring or requesting any
structural or other repairs or alterations to such Company Property.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Each of the Company and the Subsidiaries, as applicable, has a valid, binding and
enforceable leasehold or licensed interest under each of the Real Property Leases under which it is
a lessee, free and clear of all Liens, other than Permitted Exceptions. Each of the Real Property
Leases is in full force and effect. Neither the Company nor any Subsidiary is in material default
under any Real Property Lease, and, to the Knowledge of the Company, no event has occurred and no
circumstance exists which, if not remedied, and whether with or without notice or the passage of
time or both, would result in a material default by the Company, its applicable Subsidiary or any
counter-party thereunder. Neither the Company nor any Subsidiary has received or given any notice
of any default or event that with notice or lapse of time, or both, would constitute a material
default by the Company or any Subsidiary under any of the Real Property Leases and no party to any
Real Property Lease has exercised any termination rights (or indicated any intent not to renew the
leasehold term) with respect thereto. Except for Other Approvals, no Real Property Lease has any
change of control, anti-assignment or similar provision that would require notice to or the consent
of any Person as a result of the execution of this Agreement or the consummation of any of the
Transactions.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;There does not exist any actual or, to the Knowledge of the Company, threatened or
contemplated condemnation or eminent domain proceedings that could affect any Company Property or
any part thereof, and none of the Company and its Subsidiaries has received any written notice of
the intention of any Governmental Authority or other Person to take or use all or any part thereof.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Except for the Real Property Leases set forth on <U>Section&nbsp;3.14(e)</U> of the Company
Disclosure Schedule, there is no currently due and payable Tax, levy or charge of any kind
whatsoever in respect of the Company Properties or in connection with the Company&#146;s use or right in
such properties except for Permitted Exceptions, and the Company is not under any obligation to pay
any such Taxes, levies or charges to any third party, including any Governmental Authority or the
Israeli Land Administration, except in each case as required under Real Property Leases or as
required by Law. Except as set forth in <U>Section&nbsp;3.14(e)</U> of the Company Disclosure
Schedule, the Company has obtained all necessary Permits to own, lease, occupy, possess or use the
Company Properties (including building permits) and all of such Permits are in full force and
effect, except where the failure to obtain any such Permit has not had and would not be reasonably
likely to have a Company Material Adverse Effect. Except as set forth in <U>Section&nbsp;3.14(e)</U>
of the Company Disclosure Schedule, there are no outstanding Actions (nor to the Company&#146;s
Knowledge are any Actions threatened) in connection with or arising from the Company&#146;s or its
Subsidiaries&#146; possession or use of any Company Properties nor are there any pending (or to the
Company&#146;s Knowledge, threatened) Actions against any of the Company&#146;s or its Subsidiaries&#146; officers
or directors in connection therewith.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.15. <U>Intellectual Property</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Section&nbsp;3.15(a)</U> of the Company Disclosure Schedule&nbsp;sets forth an accurate and
complete list of all Patents, registered Marks, pending applications for registrations of any Marks
and any unregistered Marks, registered Copyrights and pending applications for registration of any
Copyrights owned or filed by the Company or any of its Subsidiaries. <U>Section&nbsp;3.15(a)</U> of
the Company Disclosure Schedule&nbsp;lists the jurisdictions in which each such Intellectual Property
right has been issued or registered or in which any application for such issuance and registration
has been filed. Each item of Company Intellectual Property listed in <U>Section&nbsp;3.15(a)</U> of
the Company Disclosure Schedule&nbsp;is currently in compliance, in all material respects, with any and
all formal legal requirements necessary to record and perfect the Company&#146;s and its Subsidiaries&#146;
interest therein.<U> Section&nbsp;3.15(a)</U> of the Company Disclosure Schedule also lists all
applicable filings, recordings and other acts, and all fees, Taxes and other payments, that are
required to be made within ninety (90)&nbsp;days after Closing to maintain the validity and
enforceability of such Company Intellectual Property and the Company&#146;s and its Subsidiaries&#146;
interest therein.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Section&nbsp;3.15(b)</U> of the Company Disclosure Schedule&nbsp;sets forth an accurate and
complete list of all Company Intellectual Property and all Company Technology that is not solely
and exclusively owned by the Company or its Subsidiaries. The Company and/or one of its
wholly-owned Subsidiaries is the sole and exclusive owner of, or has valid and continuing rights to
make, sell, license, and otherwise use Company Intellectual Property and Company Technology
worldwide in connection with the business of the Company and its Subsidiaries as currently
conducted. The Company Intellectual Property and Company Technology includes all Intellectual
Property and Technology used in connection with the operation of the businesses of the Company and
its Subsidiaries as currently conducted, and there is no other Intellectual Property or Technology
that is material to the operation of the businesses of the Company and its Subsidiaries as
currently conducted, except for shrink-wrap software or other off-the-shelf Intellectual Property
that may be purchased or licensed from a third party on reasonable terms. The Company or one of
its Subsidiaries is the exclusive owner of all right, title and interest in and to the Company
Intellectual Property purported to be owned by the Company or one of its Subsidiaries, free and
clear of all Liens, exclusive licenses, and non-exclusive licenses not granted in the ordinary
course of business consistent with past practice, or any obligation to grant any of the foregoing.
The use, practice or other commercial exploitation of the Company Intellectual Property by the
Company or any of its Subsidiaries and the manufacturing, licensing, marketing, importation, offer
for sale, sale or use of the Company Intellectual Property and the Company Technology, and the
operation of the Company&#146;s and its Subsidiaries&#146; businesses have not and do not, infringe,
constitute an unauthorized use of or misappropriate any Intellectual Property of any third Person.
Neither the Company nor any of its Subsidiaries is a party to or the subject of any pending or, to
the Knowledge of the Company, threatened Action, which involves a claim (i)&nbsp;against the Company or
any of its Subsidiaries, of infringement, unauthorized use, or violation of any Intellectual
Property or Technology of any Person, or challenging the ownership, use, validity or enforceability
of any Company Intellectual Property or Company Technology or (ii)&nbsp;contesting, challenging, or
seeking to deny or restrict the right of the Company or any of its Subsidiaries to use, distribute,
sell, exercise, lease, license, transfer or dispose of any Company Intellectual Property or Company
Technology, or any products, processes or materials covered thereby in any manner. Except as set
forth on <U>Section&nbsp;3.15(b)</U> of the Company Disclosure Schedule, the Company has not received
any notice of any such threatened claim, nor, to the Knowledge of the Company, are there any facts
or circumstances that reasonably could form the basis for any Claim against the Company or any of
its Subsidiaries, of infringement, unauthorized use, or violation of any Intellectual Property or
Technology of any Person, or challenging the ownership, use, validity or enforceability of any
Company Intellectual Property or Company Technology. The Company Intellectual Property and Company
Technology owned or exclusively licensed by the Company or its Subsidiaries are (i)&nbsp;valid,
subsisting and enforceable, (ii)&nbsp;in compliance with any and all formal legal requirements required
to maintain the validity and enforceability thereof, and (iii)&nbsp;not subject to any outstanding
judgment, injunction, order, decree, ruling or agreement impairing, restricting or otherwise
adversely affecting the Company&#146;s or any of its Subsidiaries&#146; use or licensing thereof or rights
thereto, or that would impair the validity or enforceability thereof, except such that would not,
individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received any notification that a license under
any other Person&#146;s Intellectual Property is or may be required. Neither the Company nor any of its
Subsidiaries has made any offers of licenses to resolve any alleged infringement of Company
Intellectual Property or Company Technology or charges of infringement under any Company
Intellectual Property that have been declined. Except as set forth in <U>Section&nbsp;3.15(b)</U> of
the Company Disclosure Schedule, neither the Company nor its Subsidiaries have sought opinions of
counsel regarding any patent validity or infringement issues, nor has the Company or its
Subsidiaries made a determination that there is or was a potential issue of patent infringement
relating to their respective businesses.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;No Person (including employees and former employees of the Company or any of its
Subsidiaries), to the Knowledge of the Company, is infringing, violating, misappropriating or
otherwise misusing any Company Intellectual Property or Company Technology, and neither the Company
nor any of its Subsidiaries has made any such claims against any Person (including employees and
former employees of the Company or any of its Subsidiaries).


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Except as set forth in <U>Section&nbsp;3.15(d)</U> of the Company Disclosure Schedule, each
Person, including each present employee, independent contractor or consultant who conceived,
developed or created or participated in creating any part of any Company Intellectual Property or
Company Technology used or relied upon in any material respect by the Company or any Subsidiary,
has executed a valid and enforceable agreement with the Company and/or one of its wholly-owned
Subsidiaries, as applicable, that (i)&nbsp;conveys to the Company or its applicable wholly-owned
Subsidiary any and all right, title and interest in and to all Intellectual Property or Technology
developed or contributed to by such Person in connection with such Person&#146;s engagement with the
Company or Subsidiary (as applicable), (ii)&nbsp;requires such Person, during and after the term of
employment or Contract, to cooperate with the Company or the applicable Subsidiary in the
prosecution of any Patent applications or other application to register or protect any other
applicable Intellectual Property filed in connection with such Intellectual Property, and
(iii)&nbsp;obligates the employee, consultant or independent contractor to keep any confidential
information of the Company and its Subsidiaries, including Trade Secrets, confidential both during
and, for a reasonable time, after the term of employment or Contract. All amounts payable by the
Company or any of its applicable Subsidiaries to all Persons involved in the research, development,
conception or reduction to practice of any Company Intellectual Property or Company Technology have
been paid in full and no remuneration, compensation or other amounts remain outstanding or may
become due and payable under any circumstance. To the Knowledge of the Company, no Person,
including current and former employees or consultants, has excluded Intellectual Property and/or
Technology made or conceived prior to such Person&#146;s employment with or work for the Company or any
of its Subsidiaries from such Person&#146;s assignment of inventions pursuant to such proprietary
invention agreements. To the Knowledge of the Company, no current or former employee, consultant
or independent contractor of the Company or its Subsidiaries who is or was involved in, or who has
or will have contributed to, the creation or development of any Company Intellectual Property or
Company Technology, in whole or in part, has performed services for, or was an employee of, or was
otherwise engaged by any third party during or prior to the time of such Person&#146;s employment or
engagement by the Company or its applicable Subsidiaries, in a manner that may provide the basis
for any claim, interest, or right of such third party with respect to any Company Intellectual
Property or Company Technology.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;No Trade Secret or any other non-public, proprietary information material to the
businesses of the Company or any of its Subsidiaries as currently conducted and as contemplated to
be conducted in the future has been authorized to be disclosed or has been actually disclosed by
the Company or any of its Subsidiaries to any employee or any third Person, other than pursuant to
a written confidentiality or non-disclosure agreement prohibiting the unauthorized disclosure and
use of the Company Intellectual Property or Company Technology. Except as set forth in
<U>Section&nbsp;3.15(d)</U> of the Company Disclosure Schedule, all employees, contractors and
consultants of the Company and its Subsidiaries, and all other Persons that conceived, developed,
created or contributed to the creation of any Intellectual Property or Technology for the Company
or any of its Subsidiaries, validly assigned their respective rights in any Intellectual Property
or Technology (and assigned or waived all related rights) in the Company Intellectual Property or
Company Technology to the Company or its Subsidiaries pursuant to enforceable, written and signed
agreements, and no further consents, assignments, waivers or other action is required for any
employees&#146;, contractors&#146;, consultants&#146; or other Persons&#146; Intellectual Property (or any related
rights) to be assigned to, transferred to, or otherwise fully vested in the Company or its
Subsidiaries (including obtaining any consents or waivers from the employees, contractors or
consultants) No employee, contractor or agent of the Company or any of its Subsidiaries or any
other Person is in default or breach of any material term of any employment agreement,
non-disclosure agreement, assignment of invention agreement or similar agreement relating to the
protection, ownership, development, use or transfer of Company Intellectual Property or Company
Technology or, to the Company&#146;s Knowledge, any other Intellectual Property or Technology. The
Company and its Subsidiaries have taken all reasonably necessary and appropriate steps to protect
and preserve the confidentiality of all Trade Secrets and any other confidential information of the
Company and its Subsidiaries. Except as set forth in <U>Section&nbsp;3.15(e)</U> of the Company
Disclosure Schedule, no rights in any Company products, Software or services have been transferred
or granted to any other Person except for non-exclusive licenses of Company products granted by the
Company or its Subsidiaries to their customers in the ordinary course of business.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;<U>Section&nbsp;3.15(f)</U> of the Company Disclosure Schedule&nbsp;sets forth a correct and
complete list of all Software that is (i)&nbsp;owned by the Company or any of its Subsidiaries and /or
(ii)&nbsp;used by the Company or its Subsidiaries in their businesses or Products and not owned by the
Company or any of its Subsidiaries, other than Software that is readily available on reasonable
terms through commercial distributors or in consumer retail stores for an annual license fee of
less than $250,000.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;Except as set forth in <U>Section&nbsp;3.15(g)</U> of the Company Disclosure Schedule, no
Publicly Available Software (including, without limitation, derivative works thereof) (i)&nbsp;was used
in connection with the development or modification of any Software used and relied upon in any
material respect by the Company or any Subsidiary, (ii)&nbsp;forms part of the Technology owned or
licensed, and relied upon in any material respect, by the Company or any Subsidiary, (iii)&nbsp;is
embodied or incorporated, in whole or in part, into any Products, or (iii)&nbsp;is used in the
development of any Technology any Products owned and relied upon in any material respect by the
Company or any Subsidiary. The Company and its Subsidiary do not use any Publicly Available
Software in a manner that (a)&nbsp;would subject any proprietary source code of the Company or its
Subsidiary to the terms of such Publicly Available Software, (b)&nbsp;requires the contribution,
licensing, provision or public disclosure to any third party of any source code proprietary to the
Company or its Subsidiary, or (c)&nbsp;imposes limitations on the Company&#146;s or its Subsidiary&#146;s right to
require royalty payments from or restrict further distribution of same.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;The Company and its Subsidiaries own, lease or license all Technology, including Software,
hardware, and computer equipment and other information technology (collectively, &#147;<B>Computer
Systems</B>&#148;) that are necessary for the operations of the Company&#146;s and its Subsidiaries&#146; businesses
as currently conducted. The data storage and transmittal capability, functionality and performance
of each individual item in the Computer Systems and the Computer Systems as a whole are
satisfactory for the Company&#146;s and its Subsidiaries&#146; businesses as conducted. The Computer Systems
have not failed in any material manner or been compromised to any material extent and, to the
Knowledge of the Company, the data which they process has not been corrupted or accessed by any
unauthorized Person. The Company and its Subsidiaries have taken all reasonable steps in
accordance with prudent industry standards to preserve the availability, security and integrity of
the Computer Systems and the data and information stored on the Computer Systems. The Company and
its Subsidiaries maintain comprehensive and clear documentation regarding all Computer Systems,
their methods of operation, and their support and maintenance. The Computer Systems are adequate
for the operation of the Company&#146;s and its Subsidiaries&#146; businesses as currently conducted.


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;<U>Section&nbsp;3.15(i)</U> of the Company Disclosure Schedule&nbsp;sets forth a true, complete and
correct list of all Company IP Contracts that are in force, together with all amendments and
supplements thereto and all waivers and modifications of any terms thereof (and, if oral, an
accurate summary of the material terms and conditions thereof), indicating for each such Company IP
Contract the title, parties thereto, date executed and whether it is exclusive.


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;The Company has made available to Parent and Merger Sub accurate and complete copies of
all Company IP Contracts a list of which is set forth on <U>Section&nbsp;3.15(j)</U> of the Company
Disclosure Schedule. Each of the Company IP Contracts set forth on <U>Section&nbsp;3.15(j)</U> of the
Company Disclosure Schedule&nbsp;is in full force and effect and is the legal, valid and binding
obligation of the Company and/or its Subsidiaries, enforceable against them in accordance with its
terms. With respect to each of the Company IP Contracts set forth on <U>Section&nbsp;3.15(j)</U> of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is in default in
any material respect thereof, nor, to the Company&#146;s Knowledge, has any event occurred which, with
notice or the lapse of time, or both, would give rise to such a default by the Company or any of
its Subsidiaries, as applicable. Neither the execution of this Agreement nor the consummation of
any of the Transactions shall, by itself, constitute a default under, give rise to cancellation
rights under, or otherwise materially adversely affect any of the rights of the Company or any of
its Subsidiaries under any Company IP Contract.


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;Except as set forth in <U>Section&nbsp;3.15(k)</U> of the Company Disclosure Schedule, no
university, military, educational institution, research center, Governmental Authority, entity
owned or controlled by any Governmental Authority, or other organization (each, a &#147;<B>R&D Sponsor</B>&#148;)
has sponsored or provided funding for research and development conducted by or for the Company or a
Subsidiary, or has any claim of right to, ownership of or other Lien on any Company Intellectual
Property or Company Technology. No Person (including any current and former employee, consultant or
independent contractor of the Company or any of its Subsidiaries) who is or was involved in, or who
has or will have contributed to, the creation or development of any of the Company Intellectual
Property or Company Technology has performed services for, was an employee of, or was otherwise
engaged (including as a graduate student) by any R&D Sponsor, during the time period in which such
Person was engaged by the Company or any of its Subsidiaries or during the period such Person was
involved in contributing to the creation or development of Company Intellectual Property or Company
Technology.


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;The Company and its Subsidiaries have reasonable security measures in place to protect all
Personal Data under their control and/or protect such Personal Data from unauthorized access by any
third parties. Neither the Company nor any of its Subsidiaries has suffered any breach in security
that has permitted any unauthorized access to the Personal Data under their control nor has any
claim been, to the Knowledge of the Company, asserted or, to the Knowledge of the Company,
threatened against the Company or its Subsidiaries alleging a violation of any third party&#146;s
privacy or personal information or data rights.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.16. <U>Insurance. Section&nbsp;3.16</U> of the Company Disclosure Schedule&nbsp;sets forth a
correct and complete list of all insurance policies maintained by the Company or any of its
Subsidiaries (th<B>e &#147;Policies</B>&#148;). The Policies (i)&nbsp;have been issued by insurers which, to the
Knowledge of the Company, are reputable and financially sound, (ii)&nbsp;provide coverage for the
operations conducted by the Company and its Subsidiaries of a scope and with terms and coverage
consistent with customary practice in the industries in which the Company and its Subsidiaries
operate and (iii)&nbsp;are in full force and effect. Neither the Company nor any of its Subsidiaries is
in material breach or default, and neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action which, with notice or the lapse of time, would constitute such
a breach or default under, or permit termination or modification of, any of the Policies. Except
as set forth <U>in Section&nbsp;3.16</U> of the Company Disclosure Schedule, no notice of cancellation
or termination or intent not to renew has been received by the Company or any of its Subsidiaries
with respect to any of the Policies. The consummation of the Merger shall not in and of itself
cause the revocation cancellation or termination of any Policy. No carrier or underwriter of any
Policy has asserted any denial of coverage other than the issuance of customary reservation of
rights letters issued by such carriers or underwriters in connection with the filing of any claims.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.17. <U>Brokers and Other Advisors; Transaction Expenses</U>.


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;Except as set forth in <U>Section&nbsp;3.17(i)</U> of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries has employed any broker or finder or incurred any liability
for any brokerage or investment banking fees, commissions, finders&#146; structuring fees, financial
advisory fees or other similar fees in connection with this Agreement. <U>Section&nbsp;3.17</U>(i)&nbsp;of
the Company Disclosure Schedule sets forth all Contracts between the Company or any of its
Subsidiaries, on the one hand, and any third party, on the other hand, pursuant to which such third
party would be entitled to any payment in connection with this Agreement or the consummation of the
Transactions, other than with respect to Transaction Expenses identified in
<U>Section&nbsp;3.17(ii)</U> of the Company Disclosure Schedule.<U> </U>


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;<U>Section&nbsp;3.17(ii)</U> of the Company Disclosure Schedule&nbsp;sets forth the Transaction
Expenses paid through the date hereof by or on behalf of the Company and its Subsidiaries and the
Company&#146;s good faith current best estimate of the aggregate amount of all Transaction Expenses that
will be payable through and as a result of the Closing.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.18. <U>Takeover Statutes and Rights Plans</U>. No &#147;fair price&#148;, &#147;moratorium&#148;,
&#147;control share acquisition&#148; or other similar anti-takeover statute or regulation or any
anti-takeover provision in the Company&#146;s Charter Documents is applicable to the Merger or the other
Transactions. The Company does not have in effect any &#147;poison pill&#148; or similar plan or agreement
which could delay, render more expensive, or have a dilutive or otherwise adverse effect as a
result of, the consummation of the Merger or the Transactions contemplated hereby.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.19. <U>Tangible Personal Property</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The Company and its Subsidiaries have good and marketable title to all tangible personal
property owned by the Company and its Subsidiaries free and clear of Liens, other than the
Permitted Exceptions. All such items of tangible personal property are, in all material respects,
in good condition and in a state of good maintenance and repair (ordinary wear and tear excepted)
and are suitable for the purposes for which they are owned, used or held for use.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Section&nbsp;3.19(b)</U> of the Company Disclosure Schedule&nbsp;sets forth all leases of
personal property involving annual payments in excess of $100,000 relating to personal property
used in the business of the Company or any of the Subsidiaries or to which the Company or any of
its Subsidiaries is a party or by which the properties or assets of the Company or any of its
Subsidiaries is bound (&#147;<B>Personal Property Leases</B>&#148;). All items of personal property subject to the
Personal Property Leases are in good condition and repair (ordinary wear and tear excepted) and are
suitable for the purposes used or held for use, and such property is in all material respects in
the condition required of such property by the terms of the Personal Property Lease applicable
thereto during the term thereof. The Company has delivered to Parent true, correct and complete
copies of all Personal Property Leases, together with all amendments, modifications or supplements
thereto.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Company and each of its applicable Subsidiaries has a valid and enforceable leasehold
interest under each of the Personal Property Leases under which it is a lessee. Each of the
Personal Property Leases is in full force and effect and neither the Company nor any Subsidiary
thereof has received or given any notice of any material default or event that with notice or lapse
of time, or both, would constitute a default by the Company or any Subsidiary thereof under any of
the Personal Property Leases, except for such defaults as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.20. <U>Indebtedness</U>. <U>Section&nbsp;3.20</U> of the Company Disclosure
Schedule&nbsp;sets forth as of September&nbsp;30, 2011, all outstanding secured and unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any Subsidiary thereof has payment
commitments of any kind or nature, except for capital leases, deferred purchase price for property
or services, and trade accounts payable incurred in the ordinary course of business, and for each
Indebtedness representing a loan and/or credit line obtained by the Company and/or its
Subsidiaries. All Indebtedness, other than the Convertible Debt, may be fully prepaid upon no more
than 30&nbsp;days notice by the Company or its Subsidiary without incurring any fee, commission or
penalty. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.21. <U>Transactions with Affiliates</U>. Except as set forth in
<U>Section&nbsp;3.21</U> of the Company Disclosure Schedule, no officer, director or other interested
party (<I>ba&#146;al inyan) </I>of the Company or any of its wholly owned Subsidiaries, nor to the Knowledge of
the Company, any member of his or her immediate family or any of their respective Affiliates
(collectively, &#147;<B>Related Persons</B>&#148;) (i)&nbsp;owes any amount to the Company or any of its Subsidiaries nor
does the Company nor any of its Subsidiaries owe any amount to, nor has the Company nor any of its
Subsidiaries committed to make any loan or extend or guarantee credit to or for the benefit of, any
Related Person, in each case other than on arm&#146;s-length terms, (ii)&nbsp;is involved in any business
arrangement or other relationship with the Company or any of its Subsidiaries (whether written or
oral) other than on arm&#146;s-length terms, (iii)&nbsp;owns any direct or indirect interest (other than
through the Company) in any tangible or intangible property or rights used by the Company or any of
its Subsidiaries, other than on arm&#146;s-length terms, (iv)&nbsp;has made any written or, to the Knowledge
of the Company, oral, claim against the Company or any of its Subsidiaries or (v)&nbsp;to the Knowledge
of the Company owns any direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from, or has the right
to participate in the profits of, any competitor, supplier, distributor, customer, landlord,
tenant, creditor or debtor of the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.22. <U>Product Defects; Product Warranties; Product Returns</U>. Except as set
forth on <U>Section&nbsp;3.22</U> of the Company Disclosure Schedule, the Company and its Subsidiaries
have no liability and there is no pending, or to the Knowledge of the Company, threatened claim
against any of them that would give rise to any liability for replacement or repair of any Product
or for damages in connection therewith, except liabilities or claims in amounts that would not,
either individually or in the aggregate, reasonably be expected to be material to the Company and
its Subsidiaries taken as a whole. The Company has provided Parent with complete and current copies
of all its warranty, refund and return policies relating to Products. Except as set forth on
<U>Section&nbsp;3.22</U> of the Company Disclosure Schedule since January&nbsp;1, 2008, neither the Company
nor any Subsidiary has instituted or been requested or required to implement any product recall of
any Products, nor is there, to the Knowledge of the Company, any basis under which the Company or
any of its Subsidiaries reasonably could be required to implement any product recall of any
Products. Except as set forth on <U>Section&nbsp;3.22</U> of the Company Disclosure Schedule, all
warranty claims and product returns and requests for refunds relating to Products have been
immaterial in volume or dollar amounts and no particular Product or model of Product has been
involved in more than five percent (5%) of all warranty, return or refund requests with respect to
each Products item group (whether measured by number of units involved or dollar amounts of
claims).


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.23. <U>Customers and Suppliers</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Section&nbsp;3.23(a)</U> of the Company Disclosure Schedule&nbsp;lists, by year, for each of the
past two fiscal years (2009 and 2010): (i)&nbsp;the top 20 customers of the Company and its Subsidiaries
on a consolidated basis and amount of purchases by each such customer per fiscal year, and (ii)&nbsp;the
top 20 suppliers of the Company and its Subsidiaries on a consolidated basis and amount of
good/services sold to the Company and its Subsidiaries by each such supplier per fiscal year.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Except as set forth on <U>Section&nbsp;3.23(b)</U> of the Company Disclosure Schedule, (A)&nbsp;no
supplier listed in <U>Section&nbsp;3.23(a)</U> of the Company Disclosure Schedule&nbsp;has since January&nbsp;1,
2011 (i)&nbsp;stopped or materially decreased or threatened to stop or materially decrease the rate of
supplying materials, products or services to the Company or any of its Subsidiaries or (ii)&nbsp;other
than in the ordinary course of business, increased or announced an intent to increase the cost of
such materials, products or services, and (B)&nbsp;other than in the ordinary course of business, no
customer listed on <U>Section&nbsp;3.23(a)</U> of the Company Disclosure Schedule&nbsp;has (x)&nbsp;stopped or
materially decreased or threatened to stop or materially decrease the rate of purchasing Products
from the Company or its Subsidiaries or (y)&nbsp;reduced or announced an intent to reduce the amount
paid for Products purchased from the Company or its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.24. <U>Accounts Receivable</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;All accounts receivable of the Company and its Subsidiaries have arisen from bona fide
transactions in the ordinary course of business consistent with past practice and are valid
obligations owing to the Company and its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Except as set forth on <U>Section&nbsp;3.24(b)</U> of the Company Disclosure Schedule,&nbsp;as of
June&nbsp;30, 2011, none of the accounts receivable are overdue with respect to their payment terms by
more than 90&nbsp;days, nor has the Company nor any of its Subsidiaries amended or waived any payment
terms, including without limitation to reduce the amount owed or extend the time of payment, except
for amendments or waivers (i)&nbsp;in the ordinary course of business or (ii)&nbsp;that are not material in
amounts either individually or in the aggregate.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Except as set forth on <U>Section&nbsp;3.24(c)</U> of the Company Disclosure Schedule,&nbsp;no
payor of any of such accounts receivable has provided the Company or its Subsidiaries notice that
it does not intend to timely pay such accounts receivable in full. To the Knowledge of the Company,
except as set forth on <U>Section&nbsp;3.24(c)</U> of the Company Disclosure Schedule, the payors of
all accounts receivable of the Company and its Subsidiaries are able to timely pay such receivables
in the ordinary course of business consistent with past practices at the aggregate recorded amounts
thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.25. <U>No Consents</U>. Except for the Other Approvals, no Material Contract has
any change of control, anti-assignment or similar provision that would require notice to or the
consent of any Person as a result of the execution of this Agreement or the consummation of any of
the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.26. <U>Anticorruption</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Neither the Company nor any of its Subsidiaries nor any of their respective officers,
directors, agents, distributors, employees, or other Persons acting for their benefit or on their
behalf has, directly or indirectly, taken, authorized, allowed or ratified any action that has
caused any Company Subsidiary to be in violation of the United States Foreign Corrupt Practices Act
of 1977, as amended (the &#147;<B>FCPA</B>&#148;), or any other anticorruption or anti-bribery Laws applicable to
the Company or any Subsidiary (collectively with the FCPA, the &#147;<B>Anticorruption Laws</B>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Neither the Company its Subsidiaries nor any of their respective officers, directors,
agents, distributors, employees, or other Persons acting for their benefit or on their behalf has,
directly or indirectly, taken any act in furtherance of an offer, payment, or transfer (or a
promise to pay, or transfer) money or anything else of value to a Government Official (as defined
below), or to obtain or retain business for any Person in violation of applicable Law, or any other
Person when knowing or having reason to believe that all or any portion of such money or thing of
value will or may be offered, given or promised to any Government Official, for the purpose of
obtaining, retaining or directing any business or securing any other business or regulatory
advantage


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;As of the date of this Agreement, (i)&nbsp;there is no allegation, charge, proceeding or
investigation of or request for information from the Company or any Subsidiary by any Governmental
Authority regarding the Anticorruption Laws, (ii)&nbsp;there is no other allegation, investigation or
inquiry by any Governmental Authority regarding the Company or any Subsidiary&#146;s actual or possible
violation of the Anticorruption Laws, and (iii)&nbsp;none of the officers, directors, employees or
agents of the Company or any of its Subsidiaries is a Government Official.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Neither the Company, its Subsidiaries, nor any of their respective directors, officers,
agents, employees, former employees or any other Person associated with or acting for or on behalf
of the Company or its Subsidiaries has (i)&nbsp;circumvented any internal accounting controls of any
such entity, (ii)&nbsp;falsified any books, records, or accounts, (iii)&nbsp;established or maintained any
fund or asset that has not been recorded in the books and records of any such entity, or (iv)
attempted to coerce or fraudulently influence, an accountant in connection with any audit, review,
or examination of the financial statements of the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;For purposes of this Agreement, &#147;<B>Government Official</B>&#148; means any (i)&nbsp;officer or employee of
a Governmental Authority or instrumentality thereof (including any state-owned or controlled
enterprise) or of a public international organization, (ii)&nbsp;holder of political office, political
party official , candidate for any political office, member of a royal family or (iii)&nbsp;any Person
acting for or on behalf of any such Governmental Authority or instrumentality thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 3.27. <U>No Other Representations and Warranties</U>. Except for the representations
and warranties of the Company contained in this Agreement, the Company is not making and has not
made, and no other Person is making or has made on behalf of the Company, any express or implied
representation or warranty in connection with this Agreement or the transactions contemplated
hereby, and no third party is authorized to make any such representations and warranties on behalf
of the Company.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;IV



<P align="center" style="font-size: 12pt"><U><B>Representations and Warranties of Parent and Merger Sub</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.1. <U>Organization, Standing and Corporate Power</U>. Each of Parent and Merger
Sub is a corporation duly organized, validly existing and in good standing (to the extent such
concept is relevant in such jurisdiction) under the Laws of the jurisdiction of its incorporation,
and has the requisite power and authority necessary to own, lease and operate its properties and to
carry on its business as currently conducted.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.2. <U>Authority; Noncontravention</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Each of Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement and to perform their respective obligations hereunder. The execution,
delivery and performance of Parent&#146;s and Merger Sub&#146;s obligations under this Agreement, and the
consummation of the Merger by Merger Sub, have been duly authorized and approved by the respective
Boards of Directors of Parent and Merger Sub and by Parent as the sole shareholder of Merger Sub
and no other corporate or shareholder action on the part of Parent or Merger Sub is necessary to
authorize the execution, delivery and performance by Parent and Merger Sub of their obligations
under this Agreement or the consummation by them of the Transactions. This Agreement has been duly
and validly executed and delivered by Parent and Merger Sub and, assuming due authorization,
execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub, enforceable against each of them in accordance with its terms,
subject to the Bankruptcy and Equity Exception.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Neither the execution and delivery of this Agreement by Parent and Merger Sub, nor the
consummation by Merger Sub of the Merger, nor compliance by Parent or Merger Sub with their
respective obligations hereunder would (i)&nbsp;conflict with or violate any provision of the articles
or certificate of incorporation, articles of association or bylaws of Parent or Merger Sub or
(ii)&nbsp;assuming that the authorizations, consents and approvals referred to in <U>Section&nbsp;4.3</U>
are obtained and any waiting periods thereunder have terminated or expired and the filings referred
to in <U>Section&nbsp;4.3</U> are made, (x)&nbsp;violate any Law, or any Orders of any Governmental
Authority applicable to Parent or any of its Subsidiaries in any material respect or (y)&nbsp;violate,
conflict with, result in the loss of any benefit under, constitute a default under (or an event
which, with notice or lapse of time, or both, would constitute a default), result in the
termination of or a right of termination or cancellation under, accelerate the performance required
by, or result in the creation of any Lien upon any of the respective properties or assets of,
Parent or Merger Sub under, any of the terms, conditions or provisions of any Contract to which
Parent, Merger Sub or any of their respective Subsidiaries are a party, or by which they or any of
their respective properties or assets is or may be bound or affected except, in the case of clause
(y), for such violations, conflicts, losses, defaults, terminations, cancellations, accelerations
or Liens as, individually or in the aggregate, would not reasonably be expected to result in a
Parent Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Neither Parent, Merger Sub nor any Person holding twenty-five percent (25%) or more of
either the voting rights or the right to appoint directors of Parent or Merger Sub owns any Company
Ordinary Shares.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.3. <U>Governmental Approvals</U>. Except for the Certificate of Merger by the
Companies Registrar and assuming the Required Regulatory Consents and the Other Approvals are
obtained, made or given (in the case of filing or notice only requirements), no consents or
approvals of, or notices to or filings, declarations or registrations with, any Governmental
Authority are necessary for the execution, delivery and performance of Parent and Merger Sub&#146;s
obligations under this Agreement or the consummation by Parent and Merger Sub of the Transactions,
other than such other consents, approvals, filings, declarations or registrations that, if not
obtained, made or given, would not, individually or in the aggregate, reasonably be expected to
have a Parent Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.4. <U>Ownership and Operations of Merger Sub</U>. Parent owns beneficially and of
record all of the outstanding share capital of Merger Sub. Merger Sub was formed solely for the
purpose of engaging in the Transactions and has engaged in no material business activities or
operations, other than activities related to or in anticipation of the proposed Merger.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.5. <U>Brokers and Other Advisors</U>. No broker, investment banker, financial
advisor or other Person, other than Bank of America Merrill Lynch, is entitled to any broker&#146;s,
finder&#146;s, financial advisor&#146;s or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.6. <U>Litigation</U>. As of the date of this Agreement, there is no Action pending
(subject in the case of investigations to the Knowledge of Parent) or, to the Knowledge of Parent
or Merger Sub, threatened by or against Parent or Merger Sub that seeks to restrain the
consummation of the Merger. or which, if adversely determined, reasonably would be expected to
result in a Parent Material Adverse Effect. Neither Parent nor Merger Sub is subject to any
outstanding Order or settlement of or with any Governmental Authority that reasonably would be
expected to result in a Parent Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.7. <U>Available Funds</U>. Parent has and will have at the Effective Time,
sufficient cash available to pay the Total Consideration.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 4.8. <U>No Other Representations and Warranties</U>. Except for the representations
and warranties of Parent and Merger Sub contained in this Agreement, neither Parent nor Merger Sub
is making and has not made, and no other Person is making or has made on behalf of Parent or Merger
Sub, any express or implied representation or warranty in connection with this Agreement or the
transactions contemplated hereby, and no third party is authorized to make any such representations
and warranties on behalf of Parent or Merger Sub.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;V



<P align="center" style="font-size: 12pt"><U><B>Additional Covenants and Agreements</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.1. <U>Preparation of Immediate Reports; Company Shareholder Meeting</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;As required under Israeli Law, following the date of this Agreement, the Company shall
file an immediate report with the ISA and the TASE, announcing the execution of this Agreement and
including details of the Merger as required under Israeli Securities Law and all other
then-required public disclosures regarding this Agreement and the Transactions contemplated hereby
(the &#147;<B>Signing Immediate Report</B>&#148;). As soon as practicable thereafter, the Company shall prepare a
second immediate report and a notice for a special meeting of the Company&#146;s shareholders (together
with any adjournment or postponement thereof, the &#147;<B>Company Shareholder Meeting</B>&#148;) to be held solely
for the purpose of seeking the Company Shareholder Approval and such other matters that are
reasonably required or advisable to accomplish the purpose and intent of this Agreement (such
second immediate report and notice, and any other materials required to be provided to the
Company&#146;s shareholders in connection with the Merger, seeking and obtaining the Company Shareholder
Approval and such other reasonably required or advisable matters, the &#147;<B>Shareholders Meeting
Immediate Report</B>&#148;). The Signing Immediate Report and the Shareholders Meeting Immediate Report
shall be prepared by the Company in accordance with and comply at all times with the requirements
of applicable Law, including the Israeli Companies Law and the Israeli Securities Law and the
rules, regulations and orders promulgated thereunder. The Company (i)&nbsp;shall provide Parent a
reasonable opportunity to review and comment on drafts of the Signing Immediate Report and the
Shareholders Meeting Immediate Report, and any related correspondence and filings, prior to their
filing or distribution, (ii)&nbsp;shall consult with and consider in good faith including in such
drafts, correspondence and filings all comments reasonably proposed by or on behalf of Parent, and
(iii)&nbsp;to the extent practicable, the Company and its outside counsel shall permit Parent and its
outside counsel to participate in all communications with the ISA and the TASE, or their respective
staff, as applicable, including all meetings and telephone conferences relating to the Signing
Immediate Report, the Shareholders Meeting Immediate Report (and any amendments or supplements
thereto), this Agreement, the Transactions, or the Company Shareholder Meeting. If at any time
prior to the Effective Time any event shall occur, or any fact or information shall be discovered,
that is required by Law to be set forth in an amendment of or a supplement to the Signing Immediate
Report or the Shareholders Meeting Immediate Report, as the case may be, the Company shall promptly
prepare such amendment or supplement and cause such amendment or supplement to be promptly filed
with the ISA and TASE and distributed to the shareholders of the Company if legally required.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;As soon as reasonably practicable, the Company shall establish a record date for, duly
call, give notice of, convene and hold the Company Shareholder Meeting pursuant to the Shareholders
Meeting Immediate Report, solely for the purpose of obtaining the Company Shareholder Approval and
such other matters that are reasonably required or advisable to accomplish the purpose and intent
of this Agreement. The Company Shareholder Meeting shall be held no later than 180&nbsp;days after the
date of this Agreement; <U>provided</U>, that if any Required Regulatory Consents have not been
obtained or given to Parent&#146;s satisfaction before the end of such 180&nbsp;day period, the Company may
defer or postpone the Company Shareholder Meeting until such Required Regulatory Consents are
received (but in no event may the Company defer the Company Shareholder Meeting to or beyond the
Termination Date). The Company shall publish notice of the Company Shareholder Meeting with the
ISA and the TASE and shall deliver the Shareholders Meeting Immediate Report (including notice of
the Company Shareholder Meeting) to each of its shareholders at least 35 calendar days prior to the
date of the Company Shareholder Meeting. Subject to <U>Section&nbsp;5.3(c)</U> hereof, the Company
shall, through its Board of Directors, recommend to its shareholders the approval and adoption of
this Agreement (the &#147;<B>Company Board Recommendation</B>&#148;) and shall include such Company Board
Recommendation in the Shareholders Meeting Immediate Report and in each amendment or supplement
thereof. The Company shall use its commercially reasonable efforts to solicit voting deeds from
its shareholders pursuant to the Shareholders Meeting Immediate Report (including institutional
shareholders and their representatives) authorizing the adoption and approval of this Agreement, to
be used by the Company at the Company Shareholder Meeting to obtain the Company Shareholder
Approval. The Company shall call, establish a meeting and record date, notice, convene, hold,
conduct and solicit voting deeds in connection with the Company Shareholder Meeting in compliance
with the Company Charter Documents and all applicable Laws, including the Israeli Companies Law and
the Israeli Securities Law and the rules, regulations and orders promulgated thereunder.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Each of the Company and Parent shall cause their respective Representatives to coordinate
all activities, and to cooperate with each other, with respect to the preparation and filing of the
Signing Immediate Report, the Shareholders Meeting Immediate Report, any amendments or supplements
thereto, and any other documents required to be prepared, filed, published, distributed, solicited
or obtained for purposes of (i)&nbsp;the Company Shareholder Approval, and (ii)&nbsp;the delisting and
termination of trading of the Company Ordinary Shares on TASE effective as of the Effective Time.
The Company shall (A)&nbsp;afford Parent a reasonable opportunity to review and comment on drafts of the
Signing Immediate Report and the Shareholders Meeting Immediate Report (and in each case any
amendments or supplements thereto), and any related correspondence and filings, before they are
filed with the ISA or TASE or distributed to the Company&#146;s shareholders, (B)&nbsp;notify Parent of any
comments received from the ISA, the TASE or the Company&#146;s shareholders regarding any of the Signing
Immediate Report or the Shareholders Meeting Immediate Report (and any amendments or supplements
thereto), and (C)&nbsp;provide Parent with copies of all written correspondence between the Company and
the ISA or the TASE, as the case may be, with respect to the Signing Immediate Report or the
Shareholders Meeting Immediate Report (and any amendments or supplements thereto), this Agreement,
the Transactions or the Company Shareholder Meeting.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.2. <U>Conduct of Business by Company and Subsidiaries</U>. Except as expressly
permitted by this Agreement, as required by applicable Law, or as consented to in writing by Parent
(which consent shall be obtained in accordance with the procedure set out in <U>Section&nbsp;5.2 </U>of
the Company Disclosure Schedule with respect to matters described in Sections&nbsp;5.2 (c), (d), (e)&nbsp;and
(f), and, in any event, which consent shall not be unreasonably withheld, delayed or conditioned,
provided that if Parent does not respond to the Company&#146;s written request within five business
days, Parent shall be deemed to have consented to the action or omission requested), or as set
forth in the Company Disclosure Schedule, during the period from the date of this Agreement until
the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, (w)&nbsp;conduct
business only in the ordinary course consistent with past practice (except for such transactions as
listed in <U>Section&nbsp;5.2</U> of the Company Disclosure Schedule), (x)&nbsp;comply in all material
respects with all applicable Laws and the requirements of this Agreement and all Company Contracts,
(y)&nbsp;use commercially reasonable efforts to maintain and preserve intact its business organization
and the goodwill of those having business relationships with it, in each case, to the end that its
goodwill and ongoing business shall be unimpaired and pass to the Surviving Company intact at the
Effective Time, and (z)&nbsp;keep in full force and effect all insurance policies maintained by the
Company and its Subsidiaries. In addition, during the period from the date of this Agreement until
the Effective Time, the Company shall comply with all applicable Laws, provided that the foregoing
shall not create any obligation of the Company to perform any remedial action with respect to the
matters disclosed in <U>Section&nbsp;3.8 </U>of the Company Disclosure Schedule. Without limiting the
generality of the foregoing, except as expressly permitted by this Agreement, as required by
applicable Law or as consented to in writing by Parent (which consent shall be obtained in
accordance with the procedure set out in <U>Section&nbsp;5.2 </U>of the Company Disclosure Schedule
with respect to matters described in Sections&nbsp;5.2 (c), (d), (e)&nbsp;and (f), and, in any event, which
consent shall not be unreasonably withheld, delayed or conditioned, provided that if Parent does
not respond to the Company&#146;s written request within five business days, Parent shall be deemed to
have consented to the action or omission requested), during the period from the date of this
Agreement to the Effective Time, the Company shall not, and shall not cause or permit any of its
Subsidiaries to:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;(i)&nbsp;issue, sell, grant, dispose of, pledge or otherwise encumber any shares, voting
securities, stock appreciation rights, or equity or other ownership interests, or any securities or
rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for
any shares, voting securities, stock appreciation rights, or equity or other ownership interests,
or issue or enter into any rights, warrants, options, restricted stock units, phantom equity
awards, calls, commitments or any other agreements of any character to purchase or acquire any
shares, voting securities, stock appreciation rights, or equity or other ownership interests or any
securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to
subscribe for, any shares, voting securities, stock appreciation rights, or equity or other
ownership interests; <U>provided</U>, that the Company may issue Company Ordinary Shares upon the
exercise of Options granted under the Company Share Plans or upon the conversion of Convertible
Debt, in each case, that are outstanding on the date of this Agreement and in accordance with the
terms thereof; (ii)&nbsp;redeem, purchase or otherwise acquire any of its outstanding shares, voting
securities, stock appreciation rights or equity or other ownership interests, or any rights,
warrants, options, restricted stock units, phantom equity awards, calls, commitments or enter into
any other agreements of any character to acquire any of its shares, voting securities or equity
interests; (iii)&nbsp;declare, set aside for payment or pay any dividend on, or make any other
distribution in respect of, any shares or otherwise make any payments to its shareholders in their
capacity as such (other than (A)&nbsp;dividends by a direct or indirect wholly owned Subsidiary of the
Company to the Company and (B)&nbsp;ordinary course compensation to employee shareholders and
shareholders who currently provide services to the Company, as directors or otherwise); (iv)&nbsp;split,
combine, subdivide or reclassify any of its shares; (v)&nbsp;issue to the Company or any wholly owned
Subsidiary, securities of any wholly owned Subsidiary; or (vi)&nbsp;other than as required by
<U>Section&nbsp;2.3</U>, amend (including by reducing an exercise price or extending a term) or waive
any of the terms or conditions of, or accelerate the vesting under, any provision of the Company
Share Plans or any agreement evidencing any outstanding stock option, restricted stock unit, stock
appreciation right, warrant agreement or any other right to acquire shares, voting securities, or
equity or ownership interests of the Company or any restricted stock purchase agreement or any
similar or related Contract;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;incur or assume any additional Indebtedness for borrowed money or guarantee or act as a
surety with respect to any Indebtedness or issue or sell any debt securities or options, warrants,
calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries,
other than inter-company borrowings from the Company by a direct or indirect wholly owned
Subsidiary of the Company or borrowing in the ordinary course of business under the Company&#146;s
credit lines outstanding as of the date hereof;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien
(including pursuant to a sale-leaseback transaction or an asset securitization transaction) its
properties or assets (including securities of any Subsidiaries) to any Person, in excess of
$100,000 individually or $250,000 in the aggregate, except (other than securities of any
Subsidiaries) (i)&nbsp;pursuant to Contracts in force on the date of this Agreement that are listed on
<U>Section&nbsp;5.2(c)</U> of the Company Disclosure Schedule, and of which correct and complete copies
have been made available to Parent, (ii)&nbsp;dispositions of obsolete or worthless assets, (iii)&nbsp;sales
of Products on arms-length terms in the ordinary course of business or (iv)&nbsp;sales of Products
between the Company and any wholly owned Subsidiary and/or between wholly owned Subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;make any capital expenditure which (i)&nbsp;involves the purchase of real property or (ii)&nbsp;is
in excess of $100,000 individually or $250,000 in the aggregate, except for capital expenditures as
expressly set forth in the current Company&#146;s budget and revised forecast provided by the Company to
Parent prior to the date hereof or any 2012 budget approved by Parent;


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;directly or indirectly acquire (i)&nbsp;any Person or any division, business or equity interest
of any Person, whether by merger or consolidation, or by purchasing any material equity or voting
interest, or by any other manner, or, (ii)&nbsp;any assets that have a purchase price in excess of
$100,000 individually or $250,000 in the aggregate, in each case except for ordinary course
purchases of inventory and raw materials in amounts consistent with past practices, expenditures
expressly set forth in the current Company&#146;s budget and revised forecast provided by the Company to
Parent prior to the date hereof or any 2012 budget approved by Parent;


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;make any investment in (by contribution to capital, property transfers, purchase of
securities or otherwise), or any loan or advance to (other than travel and similar advances to its
employees in the ordinary course of business consistent with past practice), any Person, other than
investments in or loans or advances to a direct or indirect wholly owned Subsidiary of the Company
made in the ordinary course of business consistent with past practice;


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;(i)&nbsp;enter into, terminate or amend in a manner that is materially adverse to the Company
or any of its Subsidiaries any Material Contract or waive any material right of the Company or any
of its Subsidiaries under any Material Contract other than in the ordinary course of business, (ii)
enter into any Contract that would be breached by the terms of this Agreement or the consummation
of the Transactions, or would require any third party consent to avoid termination thereof or any
payment or penalty resulting from the consummation of the Transactions, or (iii)&nbsp;release any Person
from, or modify or waive any provision of, any confidentiality, non-compete, non-solicit, or
similar agreement;


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;except as set forth on <U>Section&nbsp;5.2(h)</U> of the Company Disclosure Schedule:
(A)&nbsp;modify the compensation or benefits of any current or former directors, consultants,
contractors, officers or employees, other than increases in the ordinary course of business;
(B)&nbsp;enter into, establish, amend or terminate any Company Plan; or (C)&nbsp;grant or promise any
severance, retention or termination pay, or any bonus or gratuity, to any director, officer,
employee or consultant of the Company or its Subsidiaries that is not in the ordinary course of
business;


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;make or change any material election concerning Taxes or Tax Returns or any application
with any Governmental Authority, file any amended Tax Return, enter into any closing agreement with
respect to Taxes, settle any Tax claim or assessment, consent to any extension or waiver of the
limitation period applicable to Taxes or any Tax claim or assessment, surrender any right to claim
a material refund of Taxes;


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;make any changes in financial or Tax accounting methods, principles, policies, procedures
or practices (or change an annual accounting period), including with respect to reserves for
doubtful accounts, or any of its methods of reporting income, deductions or other material items
for financial or Tax accounting purposes, except as required by a change in IFRS, ISA rules or
policies or other applicable Law;


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;amend any Company Charter Documents or any Subsidiary Documents (other than to conform to
recent amendments to the Israeli Companies Law or to increase the authorized share capital of any
wholly owned Subsidiary);


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring,
recapitalization, merger, consolidation or other reorganization (other than transactions
exclusively between wholly owned Subsidiaries of the Company) or otherwise enter into any
agreements or arrangement imposing material changes or restrictions on the assets, operations or
business of the Company or any of its Subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;pay, discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction in the ordinary course of business or in accordance with their terms of
Actions, liabilities, claims or obligations specifically reflected or as reserved against in the
most recent consolidated financial statements (or the notes thereto) of the Company, other than a
settlement reimbursable from insurance or calling solely for a cash payment in an amount less than
$250,000 in the aggregate;


<P align="left" style="font-size: 12pt; text-indent: 8%">(n)&nbsp;enter into, engage in or amend any transaction, Contract or understanding with any Related
Person or any interested parties (<I>Ba&#146;alay Inyan</I>) (other than to amend indemnification agreements of
director and officers to conform to recent amendments to the Israeli Companies Law) or make any
payment to Related Persons other than pursuant to existing Contracts disclosed by the Company in
<U>Section&nbsp;3.21</U> of the Company Disclosure Schedule;


<P align="left" style="font-size: 12pt; text-indent: 8%">(o)&nbsp;enter into, as principal or guarantor, any Derivatives Agreement, such as interest rate
swaps, interest rate options (e.g., interest rate caps, interest rate floors and options on
interest rate swaps), currency swaps and options, commodity swaps and options, index swaps and
forward contracts and any other type of swap, option, forward or derivative; provided, however,
that the Company and its Subsidiaries may enter into Derivatives Agreement on customary commercial
terms consistent with past practice and in compliance with the Company&#146;s risk management policies
in effect on the date of this Agreement;


<P align="left" style="font-size: 12pt; text-indent: 8%">(p)&nbsp;enter into or engage in (through acquisition, product extension or otherwise) the business
of selling any products or services materially different from existing products or services of the
Company and its Subsidiaries or enter into or engage in new lines of business;


<P align="left" style="font-size: 12pt; text-indent: 8%">(q)&nbsp;enter into factoring agreement in excess of normal levels or with respect to accounts
receivable of customers not previously factored;


<P align="left" style="font-size: 12pt; text-indent: 8%">(r)&nbsp;pay, discharge or satisfy any Indebtedness other than in accordance with its existing
terms and repayment schedule;


<P align="left" style="font-size: 12pt; text-indent: 8%">(s)&nbsp;effect any material change in the credit terms currently provided in respect of its
dealings with its customers and/or suppliers; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(t)&nbsp;undertake or agree, in writing or otherwise, to take or omit to take any of the foregoing
actions.


<P align="left" style="font-size: 12pt">Notwithstanding the foregoing restrictions, the Company shall be entitled to obtain renewal or tail
insurance policies (collectively, the &#147;Tail Policy&#148;), provided, that the term of any Tail Policy
does not exceed seven years after the Effective Time.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.3. <U>No Solicitation by the Company; Etc</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Until the earlier of the Effective Time and the date of termination of this Agreement, the
Company shall, and shall cause its Subsidiaries and the Company&#146;s and its Subsidiaries&#146; respective
directors, officers, employees, investment bankers, financial advisors, attorneys, accountants,
agents and other representatives (collectively as to any specified Person, its &#147;<B>Representatives</B>&#148;)
to, immediately cease and cause to be terminated any discussions or negotiations with any Person
with respect to any Takeover Proposal. The Company shall not, and shall cause its Subsidiaries and
their respective Representatives not to, directly or indirectly (i)&nbsp;solicit, initiate, cause,
facilitate or knowingly encourage any inquiries or proposals that constitute any Takeover Proposal,
(ii)&nbsp;solicit, encourage or participate in any discussions or negotiations with any third party
regarding any Takeover Proposal or (iii)&nbsp;enter into any agreement or understanding that reasonably
could result in any Takeover Proposal; <U>provided</U>, that if prior to obtaining the Company
Shareholder Approval, after consultation with a financial advisor of internationally recognized
reputation and after consultation with its outside counsel, the Board of Directors of the Company
receives an unsolicited, bona fide written Takeover Proposal made after the date hereof in
circumstances not involving a breach of this Agreement and the Board of Directors of the Company
reasonably determines in good faith that (i)&nbsp;based upon the advice of its financial advisor, such
Takeover Proposal is a Superior Proposal and (ii)&nbsp;based upon the advice of its outside legal
counsel, the failure to take such action would violate the Board of Directors&#146; fiduciary duties to
the Company&#146;s shareholders under the Israeli Companies Law, then the Company may, at any time prior
to obtaining the Company Shareholder Approval and after providing Parent, at least three (3)
business days in advance, with written notice of its intention to take such actions and of the
identity of such third party in addition to such other information required to be furnished by the
Company pursuant to Section&nbsp;5.3(b) below ,furnish information with respect to the Company and its
Subsidiaries to the Person making such Takeover Proposal; <U>provided</U>, that prior to providing
any such information, the Person making the Takeover Proposal and its applicable Representatives
must enter into or be bound by a customary confidentiality agreement with the Company containing
terms no less restrictive than the terms of the Confidentiality Agreement (as defined below) and a
customary standstill provision, <I>provided </I>that a copy of all such information is delivered
simultaneously to Parent if it has not previously been made available to Parent.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;In addition to the other obligations of the Company set forth in this <U>Section&nbsp;5.3</U>,
the Company shall promptly (and in no event later than three business days) after receipt of any
proposal, offer, inquiry or other contact regarding any Takeover Proposal, provide Parent a
certificate from an appropriate officer of the Company setting forth the identity of such third
party, the price (including the form of consideration and any holdback or earnout components),
structure and conditions of any such proposal, offer or inquiry and indicating whether the offeror
or inquiring party is a strategic or financial buyer, and thereafter shall promptly keep Parent
informed of all material developments as they occur affecting the status and terms of any such
proposals, offers, inquiries or requests.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Except as expressly permitted by this <U>Section&nbsp;5.3(c)</U>, neither the Board of
Directors of the Company nor any committee thereof (nor any Representative of the Company or any
Subsidiary thereof) shall (i)(A) withdraw or modify in a manner adverse to Parent or Merger Sub,
the Company Board Recommendation or the approval or declaration of advisability by such Board of
Directors of this Agreement and the Transactions (including the Merger) or (B)&nbsp;approve or recommend
any Takeover Proposal (any action described in this clause (i)&nbsp;being referred to as a &#147;<B>Company
Adverse Recommendation Change</B>&#148;) or (ii)&nbsp;approve or recommend or cause or authorize the Company or
any of its Subsidiaries or any of its or their Representatives to enter into, any letter of intent,
agreement in principle, memorandum of understanding, merger, acquisition, purchase or joint venture
agreement or other agreement related to any Takeover Proposal (other than a confidentiality
agreement in accordance with <U>Section&nbsp;5.3(a)</U>). Further, unless the Board of Directors has
made or is then considering a Company Adverse Recommendation Change in compliance with this
Agreement, the Board of Directors shall, if requested by Parent, promptly publicly reiterate the
Company Board Recommendation (in a press release, public filing, or other broadly disseminated
communication) after any Takeover Proposal becomes publicly disclosed, regardless of the
circumstances of disclosure. Notwithstanding the foregoing, the Board of Directors of the Company
may withdraw or modify the Company Board Recommendation in response to a Superior Proposal that has
not been withdrawn, if such Board determines in good faith, after reviewing applicable provisions
of the Israeli Companies Laws and after consulting with and receiving advice from its outside legal
counsel, that the failure to make such withdrawal or modification would constitute a breach by the
Board of Directors of the Company of its fiduciary duties to the Company&#146;s shareholders under the
Israeli Companies Law; <U>provided</U>, <U>however</U>, that no Company Adverse Recommendation
Change may be made in response to a purportedly Superior Proposal until four business days
following Parent&#146;s receipt of written notice from the Company (a &#147;<B>Company Adverse Recommendation
Notice</B>&#148;) advising Parent that the Board of Directors of the Company intends to make such Company
Adverse Recommendation Change and specifying all material terms and conditions of such Superior
Proposal (it being understood and agreed that any subsequent material amendment to the financial
terms or other material terms of such Superior Proposal shall require a new Company Adverse
Recommendation Notice and a new three business day post-notice period). Prior to effecting such a
Company Adverse Recommendation Change in response to a purportedly Superior Proposal, the Board of
Directors of the Company shall, and shall cause its Representatives to negotiate with Parent in
good faith to make such adjustments and amendments to the terms and conditions of this Agreement so
that such third party Takeover Proposal ceases to constitute a Superior Proposal; <U>provided</U>,
that, for avoidance of doubt, if the economic terms of this Agreement, as so adjusted and amended,
are the same as or at least financially equivalent to the economic terms in the third party
Takeover Proposal (based on the value of the consideration payable with respect to the Company
Ordinary Shares as well as the material conditions to the completion of the transaction), the
Takeover Proposal shall not be considered a Superior Proposal, and the Board of Directors of the
Company shall publicly reject such Takeover Proposal and publicly reaffirm the Company Board
Recommendation.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.4. <U>Commercially Reasonable Efforts</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Subject to the terms and conditions of this Agreement, each of the parties hereto shall
cooperate with the other parties and use (and shall cause their respective Subsidiaries and
Representatives to use) their respective commercially reasonable efforts to promptly (i)&nbsp;take, or
cause to be taken, all actions, and do, or cause to be done, all things, necessary, proper or
advisable to cause the conditions to Closing to be satisfied as promptly as reasonably practicable
and to consummate and make effective, the Transactions, including preparing and filing promptly and
fully all documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents (including any required
or recommended filings under applicable Antitrust Laws) and (ii)&nbsp;obtain all approvals, consents,
registrations, Permits, rulings, authorizations and other confirmations from any Governmental
Authority or other Person necessary, proper or advisable to consummate the Transactions, including
the Company Shareholder Approval, the Required Regulatory Consents and the Other Approvals. Without
limiting the foregoing, (A)&nbsp;Parent agrees to refrain (and to cause Merger Sub to refrain) from
taking any action that reasonably would be expected to result in a Parent Material Adverse Effect,
and (B)&nbsp;the Company agrees to refrain (and to cause its Subsidiaries to refrain) from taking any
action that reasonably would be expected to prevent or materially delay or materially impair the
ability of the Company to consummate the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;In furtherance and not in limitation of the foregoing, to the extent required under
applicable Law, (i)&nbsp;each party hereto agrees to make an appropriate filing of a Notification and
Report Form pursuant to the RTPA and/or any other applicable antitrust Law, with respect to the
Merger as promptly as reasonably practicable, to supply as promptly as reasonably practicable any
additional information and documentary material that may be requested pursuant to any applicable
Law, and to use its commercially reasonable efforts to take, or cause to be taken, all other
actions consistent with this <U>Section&nbsp;5.4</U> necessary to cause the expiration or termination
of the applicable waiting periods under the RTPA or any other applicable antitrust Law, as soon as
reasonably practicable; and (ii)&nbsp;the Company shall (x)&nbsp;take all action necessary to ensure that no
takeover statute or similar Law is or becomes applicable to any of the Transactions and (y)&nbsp;if any
takeover statute or similar Law becomes applicable to any of the Transactions, take all reasonable
action necessary to ensure that the Transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise minimize the effect of such Law on the
Transactions.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Each of the parties hereto shall use its commercially reasonable efforts to (i)&nbsp;cooperate
in all respects with each other in connection with any filing with or submission to any
Governmental Authority in connection with the Transactions and in connection with any Action by or
before a Governmental Authority relating to the Transactions, including any Action initiated by a
private party, and (ii)&nbsp;keep the other party informed in all material respects and on a reasonably
timely basis of any material communication received by such party from, or given by such party to,
the Israeli antitrust authority or any other applicable Governmental Authority and of any material
communication received or given in connection with any Action by or involving any third party, in
each case regarding any of the Transactions. Subject to applicable Laws, the Company and its
Subsidiaries agree to consult with Parent in advance and, to the extent not prohibited by such
Governmental Authority, give Parent or its Representatives the opportunity to attend and
participate in any scheduled meeting or substantive discussion, either in person or by telephone,
with any Governmental Authority in connection with the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;In furtherance and not in limitation of the covenants of the parties contained in this
<U>Section&nbsp;5.4</U>, each of the parties hereto shall use its commercially reasonable efforts to
resolve such objections, if any, as may be asserted by a Governmental Authority or other Person
with respect to the Transactions. Notwithstanding the foregoing or any other provision of this
Agreement, the Company shall not, without Parent&#146;s prior written consent, commit to any divestiture
transaction or agree to any restriction on its or any of its Subsidiaries&#146; businesses, and nothing
in this <U>Section&nbsp;5.4</U> shall (i)&nbsp;limit any applicable rights a party may have to terminate
this Agreement pursuant to <U>Section&nbsp;7.1</U>, (ii)&nbsp;require Parent or Merger Sub to offer, accept
or agree to (A)&nbsp;dispose of, license or hold separate (in trust or otherwise) any part of its or the
Company&#146;s (or the Surviving Company after the Merger) or any of their respective Subsidiaries&#146; or
Affiliates&#146; businesses, operations, assets or product lines (or any combination of Parent&#146;s and the
Company&#146;s (or the Surviving Company after the Merger) or any of their respective Subsidiaries&#146; or
Affiliates&#146; businesses, operations, assets or product lines), (B)&nbsp;not compete in any geographic
area or line of business, (C)&nbsp;restrict or impose burdensome terms or conditions on the manner in
which, or whether, Parent, the Company, the Surviving Company or any of their respective
Subsidiaries or Affiliates may carry on business in any part of the world (including, but not
limited to, any such party&#146;s freedom of action with respect to future acquisitions of assets or
businesses or its full rights of ownership with respect to any of its assets or businesses) and/or
(D)&nbsp;accept any undertaking or condition, enter into any consent decree, accept any operational
restriction, or take any other action that, in the judgment of Parent, could be expected to limit
the right of Parent, the Surviving Company or any of their respective Subsidiaries or Affiliates to
own or operate all or any portion of their respective businesses or assets or (iii)&nbsp;require Parent
to contest or otherwise resist any Action by, before or involving any Governmental Authority or any
private party, challenging any of the Transactions as violative of any Antitrust Law (each of
(i)-(iii) an &#147;<B>Adverse Condition</B>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.5. <U>Merger Proposal</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;As soon as practicable following the date of this Agreement (but subject to
<U>Section&nbsp;5.1(b)</U>): (i)&nbsp;each of the Company and Merger Sub shall cause a merger proposal
substantially in the form attached as <U>Exhibit&nbsp;A</U> (the &#147;<B>Merger Proposal</B>&#148;) to be executed in
accordance with the Israeli Companies Law; (ii)&nbsp;the Company shall call the Company Shareholder
Meeting (it being understood that the sole shareholder of Merger Sub has approved the Merger and
the Transaction prior to the execution of this Agreement), and (iii)&nbsp;the Company and Merger Sub
shall jointly deliver the Merger Proposal to the Companies Registrar within three calendar days
after the calling of the Company Shareholder Meeting. Each of the Company and Merger Sub shall
cause a copy of its Merger Proposal to be delivered to its secured creditors, if any, no later than
three days after the date on which the Merger Proposal is delivered to the Companies Registrar, and
each shall promptly inform its respective non-secured creditors, if any, of its Merger Proposal and
its contents in accordance with Section&nbsp;318 of the Israeli Companies Law and the regulations
promulgated thereunder.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Promptly after the Company and Merger Sub comply with the preceding paragraph and with
<U>subsections (i)</U>&nbsp;and <U>(ii)</U>&nbsp;below, but in any event no more than three business days
following the date on which such notice was sent to the creditors, the Company and Merger Sub shall
inform the Companies Registrar, in accordance with Section&nbsp;317(b) of the Israeli Companies Law,
that notice was given to their respective creditors under Section&nbsp;318 of the Israeli Companies Law
and the regulations promulgated thereunder. In addition to the foregoing, each of the Company and,
if applicable, Merger Sub, shall:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;Publish a notice to their respective creditors, stating that a Merger Proposal was
submitted to the Companies Registrar and that the creditors may review the Merger Proposal at the
office of the Companies Registrar, the Company&#146;s registered offices or Merger Sub&#146;s registered
offices, as applicable, and at such other locations as the Company or Merger Sub, as applicable,
may determine, in (A)&nbsp;two daily Hebrew newspapers circulated in Israel, on the day that the Merger
Proposal is submitted to the Companies Registrar, and (B)&nbsp;if required, at such other time and in
such other manner as may be required by applicable Laws and regulations; and


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;Within four business days from the date of submitting the Merger Proposal to the
Companies Registrar, send a notice by registered mail to all of the &#147;<B>Substantial Creditors</B>&#148; (as
such term is defined in the regulations promulgated under the Israeli Companies Law) that the
Company or Merger Sub, as applicable, are respectively aware of, stating that a Merger Proposal was
submitted to the Companies Registrar and that the creditors may review the Merger Proposal at any
additional locations determined as referred to in the notice referenced in <U>subsection
(i)</U>&nbsp;above.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.6. <U>Public Announcements</U>. Without limiting Parent&#146;s review and consultation
rights in <U>Section&nbsp;5.1(c)</U>, the initial press release with respect to the execution of this
Agreement shall be a joint press release to be reasonably agreed upon by Parent and the Company and
issued at a mutually agreed upon time promptly following the date hereof, which time shall comply
with the requirements of applicable Law. Thereafter, prior to the Closing Date neither the Company
nor Parent shall issue or cause the publication of any press release or other public announcement
(to the extent not previously issued or made in compliance with this Agreement) with respect to the
Merger, this Agreement or the other Transactions without the prior written consent of the other
party (in which case the party preparing any such public announcement shall provide the other party
with a draft of such public announcement at least two days prior to the date for the proposed
release of such public announcement), except as may be required by Law (including any ISA or
Securities and Exchange Commission rules and regulations) or by any applicable listing rules or
agreement with TASE or NASDAQ as determined in the good faith judgment of the party proposing to
make such release (in which case such party shall not issue or cause the publication of such press
release or other public announcement without prior consultation with the other party, to the extent
such prior consultation is reasonably practicable and legally permissible). Notwithstanding the
foregoing, each of Parent and the Company may make public statements in response to specific
questions regarding this Agreement or the Transactions presented by the press, analysts, investors
or those attending industry conferences or financial analyst conference calls, so long as such
statements are substantially similar to previous press releases, public disclosures or public
statements made by Parent or the Company in accordance with this <U>Section&nbsp;5.6</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.7. <U>Access to Information; Confidentiality</U>. Subject to applicable Laws
relating to the exchange of information, from the date of this Agreement to the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, afford to Parent and Parent&#146;s
Representatives reasonable access during normal business hours to all of the Company&#146;s and its
Subsidiaries&#146; properties (including real properties), books, Contracts, commitments, records and
correspondence, officers, directors, employees, accountants, counsel, financial advisors and other
Representatives and the Company shall promptly furnish to Parent (i)&nbsp;a copy of each report,
schedule and other document filed or submitted by it following the date hereof pursuant to the
requirements of applicable securities Laws or TASE requirements (and the Company shall deliver to
Parent a copy of each report, schedule and other document proposed to be filed or submitted by the
Company pursuant to the requirements of applicable securities Laws or TASE requirements, to the
extent reasonably practicable and legally permissible, not less than two business days prior to
such filing) and a copy of any communication (including &#147;comment letters&#148;) received by the Company
from the ISA or TASE, or proposed to be sent by or on behalf of the Company to ISA or TASE,
concerning compliance with securities Laws or TASE listing requirements, (ii)&nbsp;copies of all audited
or unaudited financial statements prepared after the date hereof through the Closing Date and
(iii)&nbsp;all other documents and information concerning the Company&#146;s and its Subsidiaries&#146; business,
properties and personnel as Parent or its Representatives may reasonably request. Except for
disclosures permitted by the terms of the Confidential Disclosure Agreement, dated as of July&nbsp;2011,
between Parent and the Company (as amended from time to time, the &#147;<B>Confidentiality Agreement</B>&#148;),
Parent shall hold all information received from the Company pursuant to this <U>Section&nbsp;5.7</U> in
confidence in accordance with the terms of the Confidentiality Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.8. <U>Notice of Certain Matters</U>. The Company shall give prompt notice to
Parent, and Parent shall give prompt notice to the Company, of (a)&nbsp;any notice or other
communication received by such party from any Governmental Authority in connection with the
Transactions or from any Person alleging that the consent of such Person is or may be required in
connection with the Transactions, (b)&nbsp;any Actions commenced or, to such party&#146;s knowledge,
threatened against, involving or otherwise affecting such party or any of its Subsidiaries which
relate to the Transactions, (c)&nbsp;the discovery of any material fact or circumstance that, or the
occurrence or non-occurrence of any material event the occurrence or non-occurrence of which, would
cause any representation or warranty made by such party contained in this Agreement to be untrue in
any material respect, and (d)&nbsp;any material failure of such party to comply with or satisfy any
covenant or agreement to be complied with or satisfied by it hereunder.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.9. <U>Directors&#146; and Officers&#146; Insurance; Indemnification Agreements</U>.


<P align="left" style="font-size: 12pt; text-indent: 9%">(a)&nbsp;From and after the Effective Time, Parent shall cause the Surviving Company to fulfill and
honor all the obligations of the Company pursuant to the indemnification agreements listed on
<U>Section&nbsp;5.9</U> of the Company Disclosure Schedule, with each individual who is a party to such
indemnification agreements and that at the Effective Time is, or at any time prior to the Effective
Time was, a director or officer of the Company or of any current or former Subsidiary of the
Company (each, an &#147;<B>Indemnitee</B>&#148; and, collectively, the &#147;<B>Indemnitees</B>&#148;) which agreements shall survive
the Transactions and continue in full force and effect in accordance with their respective terms.
Without limiting the foregoing, Parent, from and after the Effective Time and until seven years
from the Effective Time, shall cause, unless otherwise required by Law, the articles of
association, certificate of incorporation and by-laws (as applicable) and comparable organizational
documents of the Surviving Company and each of its Subsidiaries to contain provisions no less
favorable to the Indemnitees with respect to exculpation and limitation of liabilities of directors
and officers, insurance and indemnification than are set forth as of the date of this Agreement in
the Company Charter Documents and the Subsidiary Documents, which provisions shall not be amended,
repealed or otherwise modified in a manner that would adversely affect the rights thereunder of the
Indemnitees with respect to exculpation and limitation of liabilities or insurance and
indemnification.


<P align="left" style="font-size: 12pt; text-indent: 9%">(b)&nbsp;Parent shall, and shall cause the Surviving Company to maintain in effect any Tail Policy
(as referred to in <U>Section&nbsp;5.2</U>) and continue to honor all obligations pursuant to such Tail
Policy.


<P align="left" style="font-size: 12pt; text-indent: 9%">(c)&nbsp;The Indemnitees to whom this <U>Section&nbsp;5.9</U> applies are intended third party
beneficiaries of this Section&nbsp;5.9&#253;. The provisions of this <U>Section&nbsp;5.9</U> are intended to be
for the benefit of each Indemnitee, his or her successors, heirs or representatives. Parent shall
pay all reasonable expenses, including reasonable attorneys&#146; fees, that may be incurred by any
Indemnitee in enforcing the indemnity and other obligations provided in this <U>Section&nbsp;5.9</U>.


<P align="left" style="font-size: 12pt; text-indent: 9%">(d)&nbsp;This <U>Section&nbsp;5.9</U> shall be binding upon Parent and the Surviving Company and their
respective successors and assigns. In the event that Parent or the Surviving Company or any of
their respective successors or assigns consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity of such consolidation or merger or
transfers or conveys all or a majority of its properties and assets to any Person, then, and in
each such case, proper provisions shall be made so that the successors and assigns of Parent or the
Surviving Company, as applicable, shall succeed to the obligations set forth in this &#253;<U>Section
5.9</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.10. <U>Merger Sub Obligations</U>. Parent shall cause Merger Sub to comply with
all of its obligations under this Agreement. During the period from the date of this Agreement
through the Effective Time, except as expressly provided in this Agreement, Merger Sub shall not,
and Parent shall not permit Merger Sub to, conduct any business or undertake any activities except
as required to perform its express obligations hereunder.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.11. <U>Employee Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;During the six-month period commencing on the Closing Date, Parent shall provide or shall
cause the Surviving Company to provide to continuing employees of the Company and any of its
Subsidiaries (<B>&#147;Company Employees</B>&#148;) compensation and benefits that are, in the aggregate, to any
such employee, no less favorable than the compensation and benefits being provided to such Company
Employee as of the date hereof under his/her employment agreement and the Company Plans as set
forth in <U>Section&nbsp;3.11(a)(i)</U> of the Company Disclosure Schedule; <I>provided, however</I>, that
nothing herein shall be construed as limiting the right or ability of the Surviving Company and/or
its Subsidiaries, as the case may be, to terminate the employment of a continuing employee for
Cause, or as creating any obligation of the Parent or the Surviving Company or a Subsidiary thereof
with respect to the compensation or employment of such an employee.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Without limiting <U>Section&nbsp;5.12</FONT><FONT style="font-size: 10pt">&#253;</FONT><FONT style="font-size: 12pt">(a)</U>, Parent shall cause the Surviving
Company to honor, fulfill and discharge, the Company&#146;s and its Subsidiaries&#146; obligations under any
Company Plans as set forth <U>in Section&nbsp;3.11(a)(i)</U> of the Company Disclosure Schedule&nbsp;and
employment agreements in effect as of the date hereof.
</FONT>

<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;For purposes of eligibility under any employee benefit plans of Parent that will provide
benefits to any Company Employee after the Closing (the &#147;<B>New Plans</B>&#148;), and for purposes of accrual
of vacation and other paid time off and any severance benefits under the New Plans, each Company
Employee shall be credited with his or her years of service with the Company or its applicable
Subsidiaries to the same extent as such Company Employee was entitled before the Closing, to credit
for such service under any similar Company Plan. In addition, and without limiting the generality
of the foregoing (but subject to any limitations under applicable Laws or the terms of the
applicable Company Plan): (i)&nbsp;each Company Employee shall be immediately eligible to participate,
without any waiting time, in any and all New Plans to the extent coverage under such New Plan
replaces coverage under a comparable Company Plan in which such Company Employee was eligible to
and did participate immediately before the replacement; and (ii)&nbsp;for purposes of each such New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent
shall use commercially reasonable efforts to cause all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for such employee and his or her
covered dependents, and Parent shall use commercially reasonable efforts to cause any eligible
expenses incurred by such employee and his or her covered dependents under a Company Plan during
the portion of the plan year of the New Plan ending on the date such employee&#146;s participation in
the corresponding New Plan begins to be taken into account under such New Plan for purposes of
satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such
employee and his or her covered dependents for the applicable plan year as if such amounts had been
paid in accordance with such New Plan.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.12. <U>Israeli Approvals</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Government Filings; Other Approvals</U>. Each party to this Agreement shall use its
commercially reasonable efforts to prepare, deliver and file, as promptly as practicable after the
date of this Agreement, each notice, report or other document required to be delivered by such
party to, or filed by such party with, any Israeli Governmental Authority with respect to the
Merger. The Company shall use its commercially reasonable efforts to obtain, make or give (in the
case of filing or notice only Other Approvals), as promptly as practicable after the date of this
Agreement, all of the Required Regulatory Consents and Other Approvals and any other consents and
approvals that may be required in connection with the Merger. Parent shall provide to the
Investment Center and all other applicable authorities any information, and shall execute any
undertakings, in each case reasonably requested by such authorities as a condition to obtaining the
Required Regulatory Consents.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Legal Proceedings</U><I>. </I>The Company and Parent each shall: (i)&nbsp;give the other party
prompt notice of the commencement of any Action by or before any Israeli Governmental Authority
with respect to this Agreement or the Merger; (ii)&nbsp;keep the other party informed as to the status
of any such Action; and (iii)&nbsp;promptly inform the other party of any communication to or from the
Commissioner of Israeli Restrictive Trade Practices, the Investment Center, the ISA, the ITA, the
Israel Land Authority, the Israeli Ministry of Industry, Trade & Labor, the Companies Registrar or
any other Israeli Governmental Authority regarding this Agreement or the Merger. The Company and
Parent will consult and cooperate with one another, and will consider in good faith the views of
one another, in connection with any analysis, appearance, presentation, memorandum, brief,
argument, opinion or proposal made or submitted in connection with any Israeli legal proceeding
relating to this Agreement or the Merger, pursuant to a joint defense agreement to the extent
necessary or advisable to preserve legal privilege. In addition, except as may be prohibited by
any Israeli Governmental Authority or by any Israeli Law, in connection with any such Action under
or relating to the RTPA, the Company and Parent will each permit authorized Representatives of the
other party to be present at each meeting or conference relating to any such legal proceeding and
to have access to and be consulted in connection with any document, opinion or proposal made or
submitted to any Israeli Governmental Authority in connection with any such legal proceeding.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Israeli Tax Rulings</U>. As soon as reasonably practicable following the date of this
Agreement, the Company shall instruct its Israeli counsel, advisors and accountants to prepare and
file with the ITA an application for a ruling (which shall be provided to Parent for review and
approval prior to its submission, which approval shall not be unreasonably withheld) (i)&nbsp;confirming
that the treatment of any Options subject to Section&nbsp;102 of the Ordinance in accordance with
<U>Section&nbsp;2.3</U> shall not be regarded as a violation of the requisite holding period, if the
applicable Option Consideration is deposited with the 102 Trustee of such Options until the end of
the respective holding period (which ruling may be subject to customary conditions regularly
associated with such a ruling), and (ii)&nbsp;requesting to exempt the non-Israeli Personnel and
consultants of the Company and its Affiliates from Israeli Tax, and to exempt the Company (and the
Surviving Company after the Merger), its applicable Affiliates, Parent, Merger Sub, the 102 Trustee
and the Paying Agent from any withholding obligation with respect to payments made pursuant to the
Merger with respect to Options (the &#147;<B>Options Tax Ruling</B>&#148;). Parent will apply to the ITA to seek a
pre-ruling exempting Parent and the Surviving Company from any obligation to withhold Israeli Tax
from any consideration deposited with or payable by the Paying Agent, the 102 Trustee, the
Surviving Company or otherwise deliverable pursuant to this Agreement or clarifying that no such
obligation exists (the &#147;<B>Withholding Tax Ruling</B>&#148;). In the alternative, the Company shall, if
requested by Parent, submit or include in the request for the Options Tax Ruling a request for the
Withholding Tax Ruling. Each of the Company and Parent shall cause their respective Israeli
counsel, advisors and accountants to coordinate all activities, and to cooperate with each other,
with respect to the preparation and filing of such application and in the preparation of any
written or oral submissions that may be necessary, proper or advisable in support of the request
for the Options Tax Ruling and the Withholding Tax Ruling. Subject to the terms and conditions
hereof, the Company shall use commercially reasonable efforts to promptly take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper or advisable under
applicable Laws to cause or facilitate obtaining the Options Tax Ruling and the Withholding Tax
Ruling, as promptly as practicable. Neither the Company nor any of its Representatives shall make
any application to, or conduct any negotiation with, the ITA with respect to any matter relating to
the subject matter of the Option Tax Ruling in coordination with Parent and its representatives,
and the Company will enable Parent&#146;s representatives to participate in all discussions and meetings
relating thereto to the extent practical and upon reasonable notice. To the extent that Parent&#146;s
representatives elect not to participate in any meeting or discussion, the Company&#146;s
representatives shall provide Parent with a prompt and full report of the discussions held. In any
event, the final text of the request for the Option Tax Ruling shall be subject to the prior
written consent of Parent, which consent shall not be unreasonably withheld or delayed.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.13. <U>Transaction Expenses.</U> At least five business days prior to the Closing,
Company shall submit documentation (the &#147;<B>Payoff Instructions</B>&#148;) setting forth the amount of all
Transaction Expenses of the Company, including the identity of each recipient, the amounts
previously paid and any additional amounts payable through or as a result of the Closing. Together
with the delivery of the Payoff Instructions, the Company shall deliver to Parent receipts and
releases evidencing payment (or the final amount, if to be paid at Closing) of the Transaction
Expenses. At or prior to the Closing, the Company shall pay to the designated recipients in
accordance with the Payoff Instructions any unpaid Transaction Expenses which are required to be
paid by Company at or as a result of Closing.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 5.14. <U>Non-Solicitation of Employees, Consultants and Advisors</U>. Until the
earlier of (i)&nbsp;the Effective Time and (ii)&nbsp;two years after the date of this Agreement, Parent
agrees that it will not, directly or indirectly through its Representatives, solicit any person
engaged as an employee, consultant or advisor of the Company or its Subsidiaries to alter its
relationship with the Company or its Subsidiaries;<U> provided</U>,<U> however</U>, that the
foregoing limitation shall not apply to general solicitations of employment by or on behalf of the
Parent that are not specifically directed at the employees, consultants or advisors of the Company
or its Subsidiaries.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;VI



<P align="center" style="font-size: 12pt"><U><B>Conditions Precedent</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 6.1. <U>Conditions to Each Party&#146;s Obligation to Effect the Merger</U>. The
respective obligations of each party hereto to effect the Merger shall be subject to the
satisfaction (or waiver, if permissible under applicable Law) of the following conditions:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Company Shareholder Approval</U>. The Company Shareholder Approval shall have been
obtained in accordance with applicable Laws and the Company Charter Documents;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>No Injunctions or Restraints</U>. No Law or Order enacted, promulgated, issued,
entered, amended or enforced by any Governmental Authority (collectively, &#147;<B>Restraints</B>&#148;) shall be in
effect enjoining, restraining, preventing, prohibiting or making illegal the consummation of the
Merger; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Israeli Statutory Waiting Periods</U>. At least 50&nbsp;days shall have elapsed after the
filing of the Merger Proposals with the Companies Registrar and at least 30&nbsp;days shall have elapsed
after the receipt of the Company Shareholder Approval.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;<U>Certificate of Merger</U>. The Companies Registrar shall have issued the Certificate
of Merger; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;<U>Required Regulatory Consents</U>. The Company or the Parent, as the case may be, shall
have obtained (or given, in the case of filing or notice only requirements) the Required Regulatory
Consents. All Required Regulatory Consents shall have been obtained without the imposition of any
term, condition or consequence the acceptance of which by the Company or Parent (or any of their
Subsidiaries), as applicable, would constitute an Adverse Condition, provided however that a term,
condition or consequence of a consent required pursuant to sub-clause (ii)&nbsp;under the definition of
&#147;Required Regulatory Consents&#148; will not be considered an Adverse Condition if and to the extent
that it relates solely to soy isolates or soy concentrates that are currently produced by the
Company or its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 6.2. <U>Conditions to Obligations of Parent and Merger Sub</U>. The obligations of
Parent and Merger Sub to effect the Merger are further subject to the satisfaction (or waiver, if
permissible under applicable Law) of the following conditions:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Representations and Warranties</U>. The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing Date as though made on the Closing Date (except to
the extent such representations and warranties expressly relate to an earlier date, in which case
as of such earlier date); <U>provided</U>, <U>however</U>, that (i)&nbsp;the representations and
warranties made in <U>Sections&nbsp;3.1, 3.2</U>, <U>3.3</U> and <U>3.18</U> shall be true and
correct in accordance with their terms, and (ii)&nbsp;for purposes of this condition, all
representations and warranties of the Company, other than those in <U>Sections&nbsp;3.1, 3.2</U>,
<U>3.3 </U>and <U>3.18</U>, shall be deemed to be true and correct in all material respects
unless the failure of such representations and warranties to be so true and correct results, or
would reasonably be expected to result, individually or the aggregate, in a Company Material
Adverse Effect. Parent shall have received a certificate signed on behalf of the Company by the
chief executive officer or the chief financial officer of the Company to such effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Performance of Obligations of the Company</U>. The Company shall have performed in
all material respects all obligations required to be performed by it under this Agreement at or
prior to the Closing Date, <U>provided</U>, <U>however</U>, that unintentional breaches of
<U>Article&nbsp;V</U> (i.e., acts omissions of which the Company did not have Knowledge prior to such
act of omission) shall not be deemed to be a breach for purposes of this <U>Section&nbsp;6.2(b)</U>
unless such unintentional breaches result, or would reasonably be expected to result, individually
or the aggregate, in a Company Material Adverse Effect. Parent shall have received a certificate
signed on behalf of the Company by the chief executive officer or the chief financial officer of
the Company to such effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Director Resignations</U>. Subject to the provisions of Section&nbsp;1.6(a) above, Parent
shall have received written resignation letters from each member of the respective Boards of
Directors (or equivalent governing bodies) of the Company and (to the extent entitled to be
appointed or removed by the Company) each of its Subsidiaries, or shall have received other
evidence of such Directors&#146; valid removal and replacement with individuals designated by Parent, in
each case effective as of the Effective Time.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;<U>Key Employees</U>. At least 80% of the key employees listed in <U>Section&nbsp;6.2(d)
</U>of the Company Disclosure Schedule hereto under Group A and at least 70% of the key employees
listed in <U>Section&nbsp;6.2(d) </U>of the Company Disclosure Schedule hereto under Group B (i)&nbsp;shall
be employees of the Company or its applicable Subsidiaries as of the Closing Date, (ii)&nbsp;shall not
have notified Parent or the Company of their intent to leave the employ of the Company, the
Surviving Corporation or their applicable Subsidiaries and (iii)&nbsp;shall be bound by written
employment agreements in a form acceptable to Parent.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;<U>No Litigation, Etc</U>. There shall not be any Restraint in effect or any Action
pending by or before any Governmental Authority that restrains, enjoins, prevents, prohibits or
makes illegal the consummation of the Merger.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;<U>Consents and Approvals</U>. The Company shall have obtained the approvals of the
banks which are a party to the agreement described in Section&nbsp;4 of the list of the Other Approvals
(as set forth in <U>Section&nbsp;8.10(a)</U> of the Company Disclosure Schedule). Such bank approvals
shall have been obtained without the imposition of any term, condition or consequence the
acceptance of which by the Company or Parent (or any of their Subsidiaries), as applicable, would
constitute an Adverse Condition.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;<U>Lock-Box</U>. Since the date of this Agreement, the Company shall not have (x)
declared or paid any dividends, distributions or other payments to any of its shareholders, in
their capacity as such, or (y)&nbsp;entered into, engaged in or amended any transaction, Contract or
understanding with any Related Person (other than to amend indemnification agreements of director
and officers to conform to recent amendments to the Israeli Companies Law), unless with respect to
clause (y)&nbsp;otherwise agreed to in writing by Parent in accordance with the terms of this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;<U>Convertible Debt</U>. (i)&nbsp;The outstanding portion of the Convertible Debt shall have
been converted in its entirety into Company Ordinary Shares in accordance with its terms, (ii)&nbsp;all
interest due and payable on the Convertible Debt shall have been repaid and retired and (iii)&nbsp;the
Convertible Debt shall have been settled in full and the Company and its Subsidiaries shall have no
liability with respect thereto, all the foregoing without incurring any fee, commission or penalty.


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;<U>Termination of Related Party Agreements</U>. The following Contracts shall have been
duly terminated and the Company and its Subsidiaries shall have no liability in connection
therewith, whether accrued, contingent or otherwise, all pursuant to written instrument in a form
reasonably satisfactory to Parent: (i)&nbsp;that certain Management Agreement entered into between the
Company and FITE GP (2004)&nbsp;Ltd. and Mivtach Shamir Holdings Ltd., dated March&nbsp;22, 200l; (ii)&nbsp;that
certain agreement for the provisions of management and advisory services entered into between the
Company&#146;s Subsidiary, Solbar Hatzor Ltd., Aman Hatzor Agricultural Cooperative Society (previously
known as Kanola Hatzor Agricultural Cooperative Society) and the Kibbutz Members Cooperative, dated
January&nbsp;5, 2001 as amended on February&nbsp;25, 2004, August&nbsp;30, 2006 and March&nbsp;22, 2007; (iii)&nbsp;that
certain Employees Services Frame Agreement by and between the Company Subsidiary, SPE Solbar Plant
Extracts Ltd., and Kibbutz Hatzor, dated January&nbsp;1, 2001, as amended; and (iv)&nbsp;that certain
Employees Services Frame Agreement by and between the Company Subsidiary, Solbar Hatzor Ltd., and
Kibbutz Hatzor, dated January&nbsp;1, 2001, as amended.


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;<U>Offset Letter</U>. The letter attached as <U>Section&nbsp;6.2(j)</U> to the Company
Disclosure Schedule shall have been duly signed and delivered to the Company and Parent.


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;<U>Company Material Adverse Effect</U>. Since the date hereof there shall not have
occurred and exist any Company Material Adverse Effect. Parent shall have received a certificate
signed on behalf of the Company by the chief executive officer or the chief financial officer of
the Company to such effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 6.3. <U>Conditions to Obligation of the Company</U>. The obligation of the Company
to effect the Merger is subject to the satisfaction (or waiver, if permissible under applicable
Law) of the following conditions:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Representations and Warranties</U>. The representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Closing Date as though made on the Closing
Date (except to the extent such representations and warranties expressly relate to an earlier date,
in which case as of such earlier date); <U>provided</U>, that for purposes of this condition, all
representations and warranties of Parent and Merger Sub shall be deemed to be true and correct in
all material respects unless the failure of such representations and warranties to be so true and
correct, results, or would reasonably be expected to result, individually or the aggregate, in a
Parent Material Adverse Effect The Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Performance of Obligations of Parent and Merger Sub</U>. Parent and Merger Sub shall
have performed in all material respects all obligations required to be performed by them under this
Agreement at or prior to the Closing Date,<U> provided</U>,<U> however</U>, that unintentional
breaches based on acts or omissions of which Parent&#146;s management did not (and would not reasonably
be expected to) have knowledge prior to such act of omission shall not be deemed to be a breach of
this<U> Section&nbsp;6.3(b)</U> unless such breaches result, or would reasonably be expected to result,
individually or the aggregate, in a Parent Material Adverse Effect. The Company shall have
received a certificate signed on behalf of Parent by an executive officer of Parent to such effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 6.4. <U>Frustration of Closing Conditions</U>. None of the Company, Parent or Merger
Sub may rely on the failure of any condition set forth in <U>Section&nbsp;6.1</U>, <U>6.2</U> or
<U>6.3</U> to be satisfied, as the case may be, if such failure was caused by the failure of the
party seeking to invoke such condition to comply with its obligations under this Agreement.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;VII



<P align="center" style="font-size: 12pt"><U><B>Termination</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 7.1. <U>Termination</U>. This Agreement may be terminated and the Transactions
abandoned at any time prior to the Effective Time:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;by the mutual written consent of the Company and Parent duly authorized by each of their
respective Boards of Directors; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;by either of the Company or Parent:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;if the Merger is not consummated on or before the Termination Date; <U>provided</U><I>,</I>
<U>however</U>, that the right to terminate this Agreement under this <U>Section&nbsp;7.1(b)(i)</U>
shall not be available to a party if the failure of the Merger to have been consummated on or
before the Termination Date was primarily due to the failure of such party to perform any of its
obligations under this Agreement;


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;if the Company Shareholder Approval shall not have been obtained at the Company
Shareholders Meeting (or any adjournment thereof); or


<P align="left" style="font-size: 12pt; text-indent: 12%">(iii)&nbsp;if any Restraint having the effects set forth in <U>Section&nbsp;6.1(b)</U> shall be in
effect and shall have become final and nonappealable; <U>provided</U><I>, </I><U>however</U><I>, </I>that the
right to terminate this Agreement under this <U>Section&nbsp;7.1(b)(iii)</U> shall not be available to
a party if such Restraint was primarily due to the failure of such party to perform any of its
obligations under this Agreement; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;by Parent:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;if the Company shall have breached or failed to perform any of its covenants or agreements
set forth in this Agreement (or if any of the representations or warranties of the Company set
forth in this Agreement shall fail to be true), which breach, failure or inaccuracy (A)&nbsp;would (if
it occurred or was continuing as of the Closing Date) give rise to the failure of a condition set
forth in <U>Section&nbsp;6.2(a)</U> or <U>(b)</U> and (B)&nbsp;is incapable of being cured, or, if
susceptible to cure, is not cured by the Company within 25 calendar days following receipt of
written notice from Parent of such breach, failure or inaccuracy; or


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;at any time prior to the date the Company Shareholder Approval is obtained, if (A)&nbsp;the
Company&#146;s Board of Directors makes a Company Adverse Recommendation Change pursuant to
<U>Section&nbsp;5.3(c)</U> or (B)&nbsp;the Board of Directors of the Company or any committee thereof
(x)&nbsp;shall not have publicly rejected any Takeover Proposal that is not (or after the process
described in <U>Section&nbsp;5.3(c)</U>, is no longer) a Superior Proposal within three business days
of the making thereof (including, for these purposes, by taking no position in response to a tender
offer or exchange offer, which shall be deemed a failure to reject such Takeover Proposal) or
(y)&nbsp;shall have failed to publicly reconfirm the Company Board Recommendation within ten business
days after receipt of a written request from Parent that it do so if such request is made following
the making by any Person of a Takeover Proposal that is not (or after the process described in
<U>Section&nbsp;5.3(c)</U>, is no longer) a Superior Proposal; or


<P align="left" style="font-size: 12pt; text-indent: 12%">(iii)&nbsp;if after the date of this Agreement there shall have occurred and exist any Company
Material Adverse Effect; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;by the Company:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;if Parent shall have breached or failed to perform any of its covenants or agreements set
forth in this Agreement (or if any of the representations or warranties of Parent and Merger Sub
set forth in this Agreement shall fail to be true), which breach, failure or inaccuracy (A)&nbsp;would
(if it occurred or was continuing as of the Closing Date) give rise to the failure of a condition
set forth in <U>Section&nbsp;6.3(a)</U> or <U>(b)</U> and (B)&nbsp;is incapable of being cured, or, if
susceptible to cure, is not cured by Parent within 25 calendar days following receipt of written
notice from the Company of such breach, failure or inaccuracy; or


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;at any time prior to the date the Company Shareholder Approval is obtained, if (A)&nbsp;the
Company&#146;s Board of Directors makes a Company Adverse Recommendation Change pursuant to
<U>Section&nbsp;5.3(c)</U> and (B)&nbsp;the Company enters into a definitive agreement for a Superior
Proposal; and prior thereto or concurrently therewith the Company pays Parent the Expenses and the
Termination Fee pursuant to <U>Sections&nbsp;7.3(c)</U> and <U>(d)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 7.2. <U>Effect of Termination</U>. In the event of the termination of this Agreement
as provided in <U>Section&nbsp;7.1</U>, written notice thereof shall be given to the other party or
parties, specifying the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void (other than the provisions of the last sentence of
<U>Section&nbsp;5.7</U>, <U>Sections&nbsp;5.14</U>, <U>7.2</U> and <U>7.3</U>, and <U>Article&nbsp;VIII</U>,
all of which shall survive termination of this Agreement), and there shall be no liability on the
part of Parent, Merger Sub or the Company or their respective directors, officers and Affiliates,
except (a)&nbsp;any payment obligations of the Company pursuant to <U>Section&nbsp;7.3</U>, and (b)&nbsp;nothing
shall relieve any party from liability for fraud or for any intentional breach of this Agreement
prior to such termination.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 7.3. <U>Expense Reimbursement and Termination Fee</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;If (i)&nbsp;this Agreement is terminated by any party pursuant to <U>Section&nbsp;7.1(b)(ii)</U>
and (ii)&nbsp;at such time, any Required Regulatory Consent has not been denied (or, if denied, any
applicable appeal or request to reconsider has been denied), then the Company shall reimburse
Parent for all of the Expenses in accordance with <U>Section&nbsp;7.3(e)</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;If this Agreement is terminated by Parent pursuant to <U>Section&nbsp;7.1(c)(i) </U>and/or
pursuant<U> </U>to <U>Section&nbsp;7.1(c)(ii)</U> then the Company shall reimburse Parent for all of
the Expenses of Parent and Merger Sub in accordance with <U>Section&nbsp;7.3(e)</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;If (i)&nbsp;this Agreement is terminated by any party pursuant to <U>Section&nbsp;7.1(b)(i)
</U>and/or Section&nbsp;7.1(b)(ii) and/or by Parent pursuant to <U>Section&nbsp;7.1(c)(ii)</U> and (ii)
prior to the date of termination or within nine (9)&nbsp;months of the date of termination, the Company
enters into a definitive agreement with respect to, or there is consummated, a sale or transfer of
at least 50% of the outstanding voting securities of the Company or 50% or more of the consolidated
assets of the Company and its Subsidiaries taken as a whole (in each case, whether in one
transaction or a series of transactions and whether through a stock or asset sale, tender or
exchange offer, merger, arrangement under the Israeli Companies Law, or other form of transaction
having the same effect), then the Company shall reimburse Parent for all the Expenses and pay
Parent the Termination Fee in accordance with <U>Section&nbsp;7.3(e)</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;If this Agreement is terminated by the Company pursuant to
<U>Section&nbsp;7.1(d)(ii)</U>, then the Company shall as a condition to such termination reimburse
Parent for all the Expenses and pay Parent the Termination Fee in accordance with
<U>Section&nbsp;7.3(e)</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Any Expense reimbursement payment required to be made pursuant to <U>Section&nbsp;7.3(a)
and/or (b)</U> shall be made to Parent promptly following termination of this Agreement pursuant to
the applicable Section of this Agreement (and in any event not later than fifteen business days
after delivery to the Company of notice of demand for payment accompanied, with respect to the
payment of Expenses by a reasonable description of the nature and amount of Expenses incurred).
Any Expense and Termination Fee payment required to be made pursuant to <U>Section&nbsp;7.3(c)</U>
shall be made to Parent promptly following the earlier of (i)&nbsp;the execution of a definitive
agreement with respect to, and (ii)&nbsp;the date of the consummation of, any transaction (or series of
transactions, if applicable) described in <U>Section&nbsp;7.3(b)(ii)</U>&nbsp;(and in any event not later
than fifteen business days after delivery to the Company of notice of demand for payment). Any
Expenses and Termination Fee payments required to be made pursuant to <U>Section&nbsp;7.3(d)</U> shall
be made prior to (or concurrently with), and shall be an express condition to, any termination
pursuant to <U>Section&nbsp;7.1(d)(ii)</U> (provided that the payment of Expenses in such circumstance
may be deferred until no later than fifteen business days following the Company&#146;s receipt of a
reasonable description of the nature and amount of Expenses incurred). All such Expense or
Termination Fee payments shall be made by wire transfer of immediately available funds to an
account designated by Parent in advance. In no event shall the Company be required to pay the
Termination Fee on more than one occasion.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Except as provided in <U>Section&nbsp;7.2(b)</U>, in the event payable and in such case once
paid, the Termination Fee and/or the Expenses, as applicable, shall be the sole and exclusive
remedy available to Parent and Merger Sub following termination of this Agreement. Upon payment of
the Termination Fee and/or Expenses, as applicable, but except as provided in
<U>Section&nbsp;7.2(b)</U>, the Company, its officers, shareholders, Affiliates or Representatives
shall have no further liability with respect to this Agreement or its termination.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;If the Company fails to pay the Expenses and/or Termination Fee pursuant to this
<U>Section&nbsp;7.3</U> when due, the unpaid amounts shall accrue interest from the date such payments
were due until paid in full (including any interest accrued thereon), at a per annum rate equal to
the rate of interest publicly announced by Citibank, in the City of New York from time to time
during such period, as such bank&#146;s Prime Lending Rate, plus 5% (or if less, the maximum rate
permitted by applicable Law). In addition, the Company also shall pay to Parent all of Parent&#146;s
costs and expenses (including reasonable attorneys&#146; fees and expenses) incurred in connection with
efforts to collect any Termination Fee and/or Expenses (and any interest accrued thereon), as the
case may be. The Company acknowledges that the Expense reimbursement and Termination Fee rights
and the other provisions of this <U>Section&nbsp;7.3</U> are an integral part of the Transactions and
that, without these agreements, Parent would not enter into this Agreement.


<P align="center" style="font-size: 12pt">ARTICLE&nbsp;VIII



<P align="center" style="font-size: 12pt"><U><B>Miscellaneous</B></U>



<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.1. <U>No Survival, Etc</U>. No information provided or made available, including
any projections, forecasts or estimates of the Company and its Subsidiaries, shall be deemed to be
disclosed for purposes of this Agreement or in the Company Disclosure Schedule, except to the
extent actually set forth herein or therein. No party to this Agreement has made or is making, and
no party to this Agreement is relying upon, any representations or warranties of any nature,
whether express or implied, other than the representations and warranties of the respective parties
expressly set forth in this Agreement. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or, except as otherwise provided in
<U>Section&nbsp;7.2</U>, upon the termination of this Agreement pursuant to <U>Section&nbsp;7.1</U>, as the
case may be, except that the agreements set forth in <U>Article&nbsp;II</U> and any other covenant or
agreement in this Agreement which contemplates performance after the Effective Time shall survive
the Effective Time indefinitely and those set forth in the last sentence of <U>Section&nbsp;5.7</U>,
<U>Sections&nbsp;5.14</U>, <U>7.2</U> and <U>7.3</U>, and this <U>Article&nbsp;VIII</U> shall survive any
termination indefinitely. The Confidentiality Agreement shall survive the execution and any
termination of this Agreement in accordance with its terms. It is clarified that nothing shall
relieve any party from or limit any party&#146;s liability for fraud or for any intentional breach of
this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.2. <U>Amendment or Supplement</U>. At any time prior to the Effective Time, this
Agreement may be amended or supplemented in any and all respects, whether before or after receipt
of the Company Shareholder Approval, by written agreement of the parties hereto, by action taken by
their respective Boards of Directors; <U>provided</U><I>, </I><U>however</U>, that following receipt of
the Company Shareholder Approval, there shall be no amendment or change to the provisions hereof
which by Law would require further approval by the Company&#146;s shareholders without such approval.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.3. <U>Extension of Time, Waiver, Etc</U>. At any time prior to the Effective Time,
any party may, subject to applicable Law, (a)&nbsp;waive any inaccuracies in the representations and
warranties of any other party hereto, (b)&nbsp;extend the time for the performance of any of the
obligations or acts of any other party hereto and (c)&nbsp;waive compliance by the other party with any
of the agreements contained herein or, except as otherwise provided herein, waive any conditions
for the waiving party&#146;s benefit. Notwithstanding the foregoing, no failure or delay by any party
in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right
hereunder. Any agreement on the part of any party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such party.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.4. <U>Assignment</U>. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by
any of the parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors and permitted assigns. Any
purported assignment not permitted under this <U>Section&nbsp;8.4</U> shall be null and void.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.5. <U>Counterparts</U>. This Agreement may be executed by original, facsimile or
electronic signature and in two or more counterparts (each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement) and shall
become effective when one or more counterparts have been signed by each of the parties and
delivered to the other parties.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.6. <U>Entire Agreement; No Third-Party Beneficiaries; Fees and Expenses</U>. This
Agreement, including the Company Disclosure Schedule, (a)&nbsp;constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof and thereof and (b)&nbsp;is not intended to
and shall not confer upon any Person other than the parties hereto any rights or remedies hereunder
except for (i)&nbsp;the rights of the Company&#146;s shareholders to receive the Merger Consideration
following the Effective Time, (ii)&nbsp;the right of the holders of Options to receive the Option
Consideration following the Effective Time and (iii)&nbsp;subject to Article&nbsp;VII hereof, the right of
the Company, on behalf of its shareholders and holders of Options, to pursue direct damages in the
event Parent does not consummate the Merger in breach of this Agreement, which right is hereby
acknowledged by Parent and Merger Sub, provided, however, that the foregoing right and remedy shall
only be available if the Company sought specific performance pursuant to Section&nbsp;8.7(c) as its
primary remedy and such was unobtainable . Except as otherwise provided in this Agreement, all
fees and expenses incurred in connection with this Agreement, the Merger and the Transactions shall
be paid by the party incurring such fees or expenses, whether or not the Merger is consummated.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.7. <U>Governing Law; Jurisdiction; Specific Enforcement</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;This Agreement shall be governed by, and construed in accordance with, the Laws of the
State of Israel without regard to its conflict or choice of law principles.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Any dispute between the parties arising out of or relating to this Agreement or any
alleged breach thereof shall be brought or otherwise commenced in the courts of Tel Aviv, Israel.
Each party to this Agreement: (i)&nbsp;expressly and irrevocably consents and submits to the sole
jurisdiction of the courts of Tel Aviv in connection with any such legal proceeding; (ii)&nbsp;agrees
that the courts of Tel Aviv shall be deemed to be a convenient forum; and (iii)&nbsp;agrees not to
assert (by way of motion, as a defense or otherwise), in any such legal proceeding commenced in the
courts of Tel Aviv, any claim that such party is not subject personally to the jurisdiction of such
court, that such legal proceeding has been brought in an inconvenient forum, that the venue of such
proceeding is improper or that this Agreement or the subject matter of this Agreement may not be
enforced in or by such court.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Each party recognizes and acknowledges that a breach of its covenants and obligations in
this Agreement would cause irreparable loss and damage to the other party as to which that party
would not have an adequate remedy at law and for which monetary damages alone would not suffice.
Accordingly, each party agrees that the parties shall be entitled to specific performance of the
terms of this Agreement, and to seek and obtain an injunction or other equitable remedy as a remedy
for (or to prevent) any breach of this Agreement. Each party further agrees that the parties shall
be entitled to the entry of an order by an appropriate court in Tel Aviv, Israel to enforce any
specific performance, injunctive or other equitable remedy granted, in addition to any other remedy
to which that party may be entitled, at law or in equity. No party shall be required to post any
bond or prove damages as a condition to seeking or obtaining specific performance, an injunction or
other equitable relief or to obtain the entry of any such order in a court located in Tel Aviv,
Israel.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.8. <U>Notices</U>. All notices, requests and other communications to any party
hereunder (and any responses or consents to any request) shall be in writing and shall be deemed
validly given if delivered personally (including via e-mail), by telecopier (which is
electronically confirmed) or sent by overnight courier (providing proof of delivery) to the parties
at the following addresses:


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">If to Parent or Merger Sub, to:



<P align="left" style="margin-left:12%; font-size: 12pt">CHS Inc.
<BR>
5500 Cenex Drive
<BR>
Inver Grove Heights, MN 55077
<BR>
Attention:&nbsp; Mark Palmquist
<BR>
Facsimile:&nbsp; 651-355-4905
<BR>
Email:&nbsp; <U>mark.palmquist@chsinc.com</U>


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">with copies (which shall not constitute notice) to:



<P align="left" style="margin-left:12%; font-size: 12pt">CHS Inc.
<BR>
5500 Cenex Drive
<BR>
Inver Grove Heights, MN 55077
<BR>
Attention:&nbsp; Lisa Zell
<BR>
Facsimile:&nbsp; 651-355-4554
<BR>
Email:&nbsp; <U>lisa.zell@chsinc.com</U>


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">and


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.
<BR>
One Azrieli Center, Round Building
<BR>
Tel Aviv 67021
<BR>
Israel
<BR>
Attention: Richard J. Mann
<BR>
Facsimile:
<BR>
E-mail: rick@gkh-law.com


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">If to the Company prior to the Closing Date, to:


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">Solbar Industries Ltd.
<BR>
2 Hahadarim Street
<BR>
Ashdod 77121
<BR>
Israel
<BR>
Attention: Shaul Shelach, CEO
<BR>
Facsimile: &#043;972-8-856-1455
<BR>
E-mail: shaul.shelach@solbar.com


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">with copies (which shall not constitute notice) to:


<P align="left" style="margin-left:12%; margin-right:8%; font-size: 12pt">Naschitz, Brandes & Co.
<BR>
5 Tuval Street
<BR>
Tel-Aviv, 67897
<BR>
Israel
<BR>
Attention: Sharon Amir/Tuvia Geffen
<BR>
Facsimile: &#043;972-3-623-5005
<BR>
E-mail: <U>samir@nblaw.com</U> and
<BR>
<U>tgeffen@nblaw.com</U>


<P align="left" style="font-size: 12pt">or such other address, facsimile number or e-mail address as any party may hereafter specify by
like notice to the other parties hereto. All such notices, requests and other communications shall
be deemed received on the date of receipt by the recipient thereof if received on a business day
prior to 5:00 p.m. in the place of receipt. Otherwise, any such notice, request or communication
shall be deemed to have been received on the next succeeding business day in the place of receipt.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.9. <U>Severability</U>. If any term or other provision of this Agreement is
determined by the arbitrator or any applicable Governmental Authority of competent jurisdiction to
be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other
terms, provisions and conditions of this Agreement shall nevertheless remain in full force and
effect. Upon such determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the fullest extent permitted
by applicable Laws in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.10. <U>Definitions</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">For convenience, certain terms used in this Agreement are listed in alphabetical order and
defined or referred to below.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>102 Trustee</B>&#148; means the trustee appointed by the Company in accordance with the provisions of
the Ordinance, and approved by the Israeli Taxing Authority, with respect to Company 102
Securities.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Action</B>&#148; means any claim, cause of action, inquiry, grievance, lawsuit, charging order,
arbitration, alternate dispute resolution proceeding, inquiry or investigation by or before a
Governmental Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Adverse Condition</B>&#148; is defined in <U>Section&nbsp;5.4(d).</U>


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Affiliate</B>&#148; means, as to any specified Person, any other Person that, directly or indirectly,
controls, or is controlled by, or is under common control with, such Person. For this purpose,
&#147;control&#148; (including, with its correlative meanings, &#147;controlled by&#148; and &#147;under common control
with&#148;) means the possession, directly or indirectly, of the power to direct or cause the direction
of management or policies of the specified Person, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Affiliated Group</B>&#148; means any affiliated group within the meaning of section 1504(a) of the
Code or any similar group defined under a similar provision of Applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Aggregate Merger Consideration</B>&#148; is defined in <U>Section&nbsp;2.1(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Agreement</B>&#148; is defined in the Preamble to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Antitrust Laws</B>&#148; means the RTPA and all other applicable Laws issued by a Governmental
Authority that are designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening of competition.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Audited Financial Statements</B>&#148; is defined in <U>Section&nbsp;3.5(e)(i)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Balance Sheet Date</B>&#148; is defined in <U>Section&nbsp;3.5(e)(i)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Bankruptcy and Equity Exception</B>&#148; is defined in <U>Section&nbsp;3.3(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Book Entry Company Shares</B>&#148; is defined in <U>Section&nbsp;2.2(b)(i)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Book-Entry Fund</B>&#148; is defined in <U>Section&nbsp;2.2(b)(i)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>business day</B>&#148; means a day ending at 5:00&nbsp;p.m. (Israel time) except a Friday, Saturday, a
Sunday or other day on which banks in the State of Israel and/or Minnesota are authorized or
required by Law to be closed.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Cause</B>&#148; shall have the meaning provided in such employee&#146;s employment agreement and, in
addition, shall mean:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s repeated failure to work cooperatively with the officers and senior
employees of the Parent, Surviving Company or Subsidiaries;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s gross negligence or willful misconduct in performing any action, or not
performing any action, that has had, or could have, alone or in the aggregate, a material
negative impact on the Surviving Company;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s theft, dishonesty, willful misconduct, breach of fiduciary duty for
personal profit, or falsification of any documents or records of the Surviving Company or
its Subsidiaries;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s unauthorized use, misappropriation, destruction or diversion of any
material asset or corporate opportunity of the Surviving Company or its Subsidiaries
(including, without limitation, the employee&#146;s improper use or disclosure of the Surviving
Company or its Subsidiary&#146;s&#146; confidential or proprietary information or his failure to
abide by policies of the Surviving Company or its Subsidiaries relating to
confidentiality);</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any act by the employee which is intended to have a material detrimental effect on the
Parent&#146;s and/or the Surviving Company&#146;s and/or its Subsidiary&#146;s reputation or business;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any material breach by the employee of his or her employment agreement and/or
proprietary information and inventions agreement with the Surviving Company or its
Subsidiaries, as applicable, which breach is not cured within fifteen (15)&nbsp;days after
employee receives notice from the Surviving Company or its Subsidiaries, as applicable,
specifying such breach; or</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s conviction (including any plea of guilty or <I>nolo contendere</I>) of any
criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which
impairs the employee&#146;s ability to perform his duties with the Surviving Company or its
Subsidiaries, as the case may be.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Certificate</B>&#148; is defined in <U>Section&nbsp;2.1(b)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Certificate of Merger</B>&#148; is defined in <U>Section&nbsp;1.3</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Closing</B>&#148; is defined in <U>Section&nbsp;1.2</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Closing Date</B>&#148; is defined in <U>Section&nbsp;1.2</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Code</B>&#148; means the U.S. Internal Revenue Code of 1986, as amended.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Companies Registrar</B>&#148; is defined in <U>Section&nbsp;1.3</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company</B>&#148; is defined in the Preamble to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company 102 Securities</B>&#148; means (a)&nbsp;Options granted under Section&nbsp;102 of the Ordinance and held
by the 102 Trustee pursuant to the Ordinance, and (b)&nbsp;Company Ordinary Shares issued upon the
exercise of any such Options and held by the 102 Trustee pursuant to the Ordinance.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Adverse Recommendation Change</B>&#148; is defined in <U>Section&nbsp;5.3(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Adverse Recommendation Notice</B>&#148; is defined in <U>Section&nbsp;5.3(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Board Recommendation</B>&#148; is defined in <U>Section&nbsp;5.1(b)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Charter Documents</B>&#148; is defined in <U>Section&nbsp;3.1(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Contracts</B>&#148; is defined in <U>Section&nbsp;3.13(b)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Disclosure Schedule</B>&#148; is defined in <U>Article&nbsp;III</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Employees</B>&#148; is defined in <U>Section&nbsp;5.11(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Intellectual Property</B>&#148; means all Intellectual Property used in the conduct of the
business of the Company or any of its Subsidiaries, or owned by the Company or any of its
Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company IP Contract</B>&#148; means any and all Contracts concerning Intellectual Property or
Technology, including all (a)&nbsp;licenses of Intellectual Property or Technology by the Company or any
of its Subsidiaries to any third party, (b)&nbsp;licenses of Intellectual Property or Technology by any
third party to the Company or any of its Subsidiaries, (c)&nbsp;Contracts between the Company or any of
its Subsidiaries and any third party relating to the transfer, development, maintenance or use of
Intellectual Property or Technology, the development or transmission of data, or the use,
modification, framing, linking, advertisement or other practices with respect to Internet websites,
and (d)&nbsp;(i)&nbsp;consents or settlements or (ii)&nbsp;decrees, orders, injunctions, judgments or rulings by
any Governmental Authority, in each case, governing the use, validity or enforceability of
Intellectual Property or Technology.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Israeli Documents</B>&#148; is defined in <U>Section&nbsp;3.5(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Material Adverse Effect</B>&#148; any change, effect, event, occurrence, state of facts or
development that, individually or in the aggregate, has had or reasonably is expected to have a
material adverse effect on the business, properties, assets, liabilities (contingent or otherwise),
results of operations or condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole; <U>provided</U>, <U>however</U>, that any such change, effect, event,
occurrence state of facts or development to the extent resulting from any of the following, in and
of itself, or themselves, shall not constitute a Company Material Adverse Effect: (i)&nbsp;changes in
general economic or political conditions or the financial credit or securities markets (including
changes in generally applicable interest or exchange rates) in general in any country or region in
which the Company or its Subsidiaries conducts a material portion of their business, unless such
changes affect the Company and its Subsidiaries in a materially disproportionate manner as compared
to other companies operating in the country or region in the same industries in which the Company
or its Subsidiaries operate, (ii)&nbsp;any change in accounting requirements or principles (including
IFRS) or any change in applicable Laws or the interpretation thereof, unless such changes affect
the Company or its Subsidiaries in a materially disproportionate manner, (iii)&nbsp;the announcement of
this Agreement or the effect of any action taken or prohibited from being taken pursuant to the
terms and conditions of this Agreement, (iv)&nbsp;any events, changes, developments or occurrences that
affect the industries in which the Company and its Subsidiaries operate, except to the extent such
events, changes, developments or occurrences affect the Company and its Subsidiaries in a
materially disproportionate manner as compared to other participants in such industries, (v)&nbsp;acts
of war, armed hostilities or terrorism or any escalation or worsening of any acts of war, armed
hostilities or terrorism (other than such acts of war, armed hostilities or terrorism, or
escalation or worsening thereof, that cause any damage or destruction to, or render physically
unusable, any facility or property of the Company or any of its Subsidiaries or otherwise disrupt
in any material manner the business or operations of the Company or any of its Subsidiaries), (vi)
any decline in the market price or decrease or increase in the trading volume of Company Ordinary
Shares, provided that this clause (vi)&nbsp;will not be construed to include any underlying change,
effect, event, occurrence, state of facts or development that resulted in or contributed to any
such decline, decrease or increase, (vii)&nbsp;the effect of any action taken by Parent or its
Affiliates with respect to the Transactions or any action taken by the Company at the request of
Parent or its Affiliates, (viii)&nbsp;any failure to meet internal or published projections, forecasts,
or revenue or earning predictions for any period, provided that this clause (viii)&nbsp;will not be
construed to include any underlying change, effect, event, occurrence, state of facts or
development that resulted in or contributed to any such failure and (ix)&nbsp;any litigation arising
from allegations of a breach of fiduciary duty or other violation of applicable Law relating to
this Agreement, the Merger or the other Transactions, or the approval thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Ordinary Shares</B>&#148; is defined in <U>Section&nbsp;2.1</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Plans</B>&#148; means each employment agreement and each material written plan, program,
policy, contract, agreement or other arrangement, other than an employment agreement, providing for
compensation, severance, termination pay, deferred compensation, retirement, profit sharing,
performance awards, stock or stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, funded or unfunded including any &#147;employee benefit plan&#148; as defined under
Section&nbsp;3(3) of ERISA.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Properties</B>&#148; is defined in <U>Section&nbsp;3.14(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Property</B>&#148; is defined in <U>Section&nbsp;3.14(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Shareholder Approval</B>&#148; is defined in <U>Section&nbsp;3.3(d)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Shareholder Meeting</B>&#148; is defined in <U>Section&nbsp;5.1(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Share Plans</B>&#148; means the Company&#146;s 2006 Option Plan .


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Company Technology</B>&#148; means all Technology used for the conduct of the business of the Company
or any of its Subsidiaries, or owned by the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Computer Systems</B>&#148; is defined in <U>Section&nbsp;3.15(h)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Confidentiality Agreement</B>&#148; is defined in <U>Section&nbsp;5.7</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Convertible Debt</B>&#148; means the outstanding principal amount of debt issued by the Company in
June&nbsp;2007 to Clal Insurance Ltd. and other parties, which is convertible into Company Ordinary
Shares at a conversion price of NIS 12.00 per Company Ordinary Share pursuant to the terms set
forth therein.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Contract</B>&#148; is defined in <U>Section&nbsp;3.3(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Copyrights</B>&#148; means copyrights, whether registered or unregistered and whether or not
registrable, (including copyrights in Software), mask work rights and registrations and
applications therefore and all moral and common law rights therein.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Effective Time</B>&#148; is defined in <U>Section&nbsp;1.3</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Environmental Laws</B>&#148; means all Laws relating to the environment, health and safety, including
without limitation, natural resources, wildlife, plants, habitat, marine sanctuaries and wetlands,
endangered or threatened species, pollutants, contaminants, wastes, chemicals, radiation, worker
protection, the use, presence, management, storage, transportation, treatment, disposal or Release
or threatened Release of, or exposure to, Hazardous Materials or potentially contaminating
materials, including by way of example and without limitation, the Israeli Hazardous Substance Law
(and the guidelines set by the Israeli Ministry of Environmental Protection); the Israeli Licensing
of Businesses Law; the Clean Air Law, and all guidelines set by the Israeli Ministry of
Environmental Protection, as each has been amended and the regulations promulgated pursuant
thereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Environmental Liabilities</B>&#148; means, with respect to any Person, all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive damages, consequential damages,
treble damages, natural resource damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of investigation and
feasibly studies), fines (administrative, criminal or otherwise), penalties, sanctions and interest
incurred as a result of any claim, demand or other proceeding by any other Person or in response to
any violation or alleged violation of Environmental Laws or Permits required thereunder, whether
known or unknown, accrued or contingent, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or
arising under or pursuant to any Environmental Law or Permit required thereunder, order or
agreement with any Governmental Authority or other Person, which relates to any environmental,
health or safety condition, violation of Environmental Law or Permit or an exposure to or Release
of Hazardous Materials.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>ERISA</B>&#148; means the U.S. Employee Retirement Income Security Act of 1974, as amended.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Expenses</B>&#148; means all out-of-pocket fees and expenses (including all fees and expenses of
counsel, accountants, financial advisors and investment bankers to Parent and its Affiliates), up
to $1,500,000 in the aggregate, incurred by or on behalf of Parent or its Affiliates in connection
with or related to the authorization, preparation, negotiation, execution and performance of this
Agreement, the filing of any required notices under applicable Antitrust Laws or other regulations,
due diligence investigations, and any other matters related to or in contemplation of this
Agreement, the Merger and the other Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Extension Order</B>&#148; has the meaning ascribed to it in the Collective Agreements Law 5717-1957.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Filed Company ISA Documents</B>&#148; is defined in <U>Section&nbsp;3.5(h</U>).


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Financial Statements</B>&#148; is defined in <U>Section&nbsp;3.5(e)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Government Grants</B>&#148; is defined in <U>Section&nbsp;3.10(l)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Governmental Authority</B>&#148; means any government, court, arbitrator, regulatory, self-regulatory,
or administrative agency, commission or authority (including any securities exchange or their
governing bodies), or other federal, state or local, domestic, foreign or multinational government
or governmental instrumentality.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Hazardous Materials</B>&#148; means any material, substance or waste that is regulated, classified, or
otherwise characterized under or pursuant to any Environmental Law as &#147;hazardous&#148;, &#147;toxic&#148;, a
&#147;pollutant&#148;, a &#147;contaminant&#148;, a &#147;substance of very high concern&#148;, a &#147;poison&#148; or &#147;radioactive&#148;
restricted&#148; or words of similar meaning or effect, including any other material, substance or waste
that is classified or defined as a threat to human health or the environment by any applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>IFRS</B>&#148; means International Financial Reporting Standards and, in the case of full year
financial statements, the Regulations of Securities (Annual Financial Statements) 2010.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Indebtedness</B>&#148; means, with respect to the Company and its Subsidiaries (a)&nbsp;any liabilities for
borrowed money or amounts owed or indebtedness issued in substitution for or exchange of
indebtedness for borrowed money, (b)&nbsp;obligations evidenced by notes, bonds, debentures or other
similar instruments, (c)&nbsp;obligations under leases (contingent or otherwise, as obligor, guarantor
or otherwise) required to be accounted for as capitalized leases pursuant to IFRS; (d)&nbsp;obligations
for amount drawn under letters of credit or similar facilities or contingent reimbursement
liabilities with respect to letters of credit or similar facilities, (e)&nbsp;any liability for deferred
purchase price of property or services, contingent or otherwise, as obligor or otherwise, other
than accounts payable incurred in the ordinary course of business, (f)&nbsp;any guaranties, suretyships
or other contingent obligations in respect of liabilities for borrowed money of others and (g)&nbsp;any
accrued and unpaid interest on, and any prepayment premiums, penalties or similar contractual
charges in respect of, any of the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Indemnitee(s)</B>&#148; is defined in <U>Section&nbsp;5.9(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Insurances</B>&#148; means any fund which has an insurance element or any issued insurance policy,
including manager&#146;s insurance, pension fund, life insurance, incapacity insurance or other similar
fund which is established to insure or pay or provide benefits to an employee or his or her
relatives in the event of the retirement, death or incapacity of such employee.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Intellectual Property</B>&#148; means all of the rights arising from or in respect of the following,
whether protected, created or arising under the Laws of any jurisdiction: (a)&nbsp;Patents; (b)&nbsp;Marks;
(c)&nbsp;Copyrights; (d)&nbsp;Trade Secrets; (e)&nbsp;all applications, registrations and permits related to any
of the foregoing clauses (a)&nbsp;through (d); and (f)&nbsp;any and all other similar proprietary rights in
any jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Interim Statement</B>&#148; is defined in <U>Section&nbsp;3.5(e)(ii)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Investment Center</B>&#148; means the Investment Center of the Israeli Ministry of Trade & Industry.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Investment Center Approval</B>&#148; means the approval by the Investment Center of the change of
ownership of the Company to be effected by the Merger.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>IRS</B>&#148; means the U.S. Internal Revenue Service.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>ISA</B>&#148; is defined in <U>Section&nbsp;3.5(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Israeli Companies Law</B>&#148; is defined in the Recitals to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Israeli Government Grants Ruling</B>&#148; is defined in <U>Section&nbsp;3.10(l)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Israeli Personnel</B>&#148; means all employees, consultants or independent contractors of the Company
(and any of its Subsidiaries) who reside or work in Israel.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Israeli Securities Law</B>&#148; is defined in <U>Section&nbsp;3.5(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>ITA</B>&#148; is defined in <U>Section&nbsp;3.10(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Knowledge</B>&#148; means, with respect to the Company, the actual knowledge of the persons listed in
<U>Section&nbsp;8.10(b)</U> of the Company Disclosure Schedule and such knowledge as such persons
reasonably would be expected to have based on their position and responsibilities with the Company
or its applicable Subsidiary.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Latest Balance Sheet</B>&#148; is defined in <U>Section&nbsp;3.5(e)(ii)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Laws</B>&#148; means laws, statutes, ordinances, codes, rules, regulations, decrees and orders of
Governmental Authorities in whichever jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Liens</B>&#148; means any liens, pledges, charges, mortgages, encumbrances, adverse rights or claims
and security interests, except for any restrictions on transfer generally arising under any
applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Marks</B>&#148; means trademarks, service marks, trade names (whether registered or unregistered),
service names, industrial designs, brand names, brand marks, trade dress rights, Internet domain
names, identifying symbols, logos, emblems, signs or insignia, and including all goodwill
associated with the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Material Contract</B>&#148; is defined in <U>Section&nbsp;3.13(a)(xxiv)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Merger</B>&#148; is defined in the Recitals to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Merger Consideration</B>&#148; is defined in <U>Section&nbsp;2.1(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Merger Proposal</B>&#148; is defined in <U>Section&nbsp;5.5(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Merger Sub</B>&#148; is defined in the Preamble to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>New Plans</B>&#148; is defined in <U>Section&nbsp;5.11(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Option</B>&#148; is defined in <U>Section&nbsp;2.3(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Option Consideration</B>&#148; means, with respect to each Company Ordinary Share subject to an
Option, an amount in cash equal to (i)&nbsp;$4.00 <U>less</U> (ii)&nbsp;the exercise price payable for such
Company Ordinary Share subject to such Option.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Option Schedule</B>&#148; is defined in <U>Section&nbsp;2.3(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Options Tax Ruling</B>&#148; is defined in <U>Section&nbsp;5.12(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Order</B>&#148; means any decision, directive, judgment, order, writ, injunction, decree, ruling,
subpoena, mandate or legally binding statement, edict or proclamation of any Governmental
Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Ordinance</B>&#148; is defined in <U>Section&nbsp;2.2(g)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Other Approvals</B>&#148; means the approvals, consents and notices set forth in
<U>Section&nbsp;8.10(a)</U> of the Company Disclosure Schedule.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Owned Property</B>&#148; and &#147;<B>Owned Properties</B>&#148; are defined in <U>Section&nbsp;3.14(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Parent</B>&#148; is defined in the Preamble to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Parent Material Adverse Effect</B>&#148; means any event or circumstance which reasonably would
prevent or materially delay the ability of Parent or Merger Sub to consummate the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Patents</B>&#148; means patents, patent applications, any reissues, reexaminations, divisionals,
continuations, continuations-in-part and extensions thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Paying Agent</B>&#148; is defined in <U>Section&nbsp;2.2(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Payoff Instructions</B>&#148; is defined in <U>Section&nbsp;5.13</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Permits</B>&#148; is defined in <U>Section&nbsp;3.8</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Permitted Exceptions</B>&#148; means (a)&nbsp;defects, exceptions, restrictions, easements, rights of way
and encumbrances disclosed in policies of title insurance which have been delivered to Parent;
(b)&nbsp;statutory liens for current Taxes, assessments or other governmental charges not yet delinquent
or the amount or validity of which is being contested in good faith by appropriate proceedings,
provided an appropriate reserve has been established therefor and reflected in the most recent
Filed Company ISA Documents in accordance with IFRS; (c)&nbsp;mechanics&#146;, carriers&#146;, workers&#146;, and
repairers&#146; Liens arising or incurred in the ordinary course of business that are not material to
the business, operations and financial condition of the Company Property so encumbered and that are
not resulting from a breach, default or violation by the Company or any of the Subsidiaries of any
Contract or Law; and (d)&nbsp;zoning, entitlement and other land use and environmental regulations by
any Governmental Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Person</B>&#148; means an individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity, including a Governmental Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Personal Data</B>&#148; means any and all data that concerns an identified and/or identifiable
individual natural person in connection with the operation of the Company or its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Personal Property Leases</B>&#148; is defined in <U>Section&nbsp;3.19(b)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Policies</B>&#148; is defined in <U>Section&nbsp;3.16</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>PRC</B>&#148; means the People&#146;s Republic of China, which, for the purpose of this Agreement, excludes
the Special Administration Regions of Hong Kong and Macau.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>PRC Sub</B>&#148; means Solbar Ningbo Food Co., Ltd., including all of its subsidiaries, branches,
liaison offices, management offices, warehouses, or other locations of business within the PRC.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Products</B>&#148; means all products manufactured, sold, leased, licensed, distributed or delivered
and services provided by the Company or any of its Subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Publicly Available Software</B>&#148; means any open source or free Software (including any Software
licensed pursuant to a GNU public license) or other Software that requires as a condition of use,
modification or distribution that other Software incorporated into, derived from or distributed
with such Software (a)&nbsp;be disclosed or distributed in source code form, (b)&nbsp;be licensed for the
purpose of making derivative works or (c)&nbsp;be redistributable at no charge.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>R&D Sponsor</B>&#148; is defined in <U>Section&nbsp;3.15(k)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Real Property Lease</B>&#148; is defined in <U>Section&nbsp;3.14(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Real Property Leases</B>&#148; is defined in <U>Section&nbsp;3.14(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Registration Company</B>&#148; is defined in <U>Section&nbsp;2.2(b)(i)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Related Persons</B>&#148; is defined in <U>Section&nbsp;3.21</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Release</B>&#148; means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, exposure to, leaching, dumping, disposing of or migrating into or through the
environment or any natural or man-made structure.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Representatives</B>&#148; is defined in <U>Section&nbsp;5.3(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Required Regulatory Consents</B>&#148; means the following approvals, consents and notices:


<P align="left" style="font-size: 12pt; text-indent: 12%">(i)&nbsp;The approval of the Merger by the Israeli Commissioner of Restrictive Trade Practices
pursuant to the RTPA shall have been obtained or, alternatively, the waiting period prescribed
under the RTPA, including any extensions thereof, shall have expired without receipt of a response
from the Israeli Commissioner of Restrictive Trade Practices.


<P align="left" style="font-size: 12pt; text-indent: 12%">(ii)&nbsp;The approval of the Merger by the competent Governmental Authority in Russia and
competent Governmental Authority in the Ukraine pursuant to applicable Antitrust Law shall have
been obtained or, alternatively, the waiting period prescribed under the Russian and Ukrainian
Antitrust Law, as applicable, including any extensions thereof, shall have expired without receipt
of a response from the applicable Governmental Authority in Russia and in the Ukraine, as
applicable.


<P align="left" style="font-size: 12pt; text-indent: 12%">(iii)&nbsp;The approval of the Israeli Office of Chief Scientist, to the extent required pursuant
to Israeli legal requirements for the consummation of the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 12%">(iv)&nbsp;The Investment Center Approval, to the extent required pursuant to Israeli legal
requirements for the consummation of the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Restraints</B>&#148; is defined in <U>Section&nbsp;6.1(b)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>RTPA</B>&#148; means the Restrictive Trade Practices Act, 1988 and the regulations promulgated
thereunder and any other applicable Israeli antitrust or fair trade Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Shareholders Meeting Immediate Report</B>&#148; is defined in <U>Section&nbsp;5.1(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Signing Immediate Report</B>&#148; is defined in <U>Section&nbsp;5.1(a)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Software</B>&#148; means computer programs, including any and all software implementations of
algorithms, models and methodologies whether in source code, object code or other form, databases
and compilations, including any and all data and collections of data, descriptions, flow-charts and
other work product used to design, plan, organize and develop any of the foregoing and all
documentation, including user manuals and training materials related to any of the foregoing,
except for shrink-wrap or other off-the-shelf software that may be purchased or licensed from a
third party.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Subsidiary</B>&#148; when used with respect to any specified party, means any corporation, limited
liability company, partnership, association, trust or other entity the accounts of which would be
consolidated (wholly or proportionately) with those of such specified party in such specified
party&#146;s consolidated financial statements if such financial statements were prepared in accordance
with IFRS, as well as any other corporation, limited liability company, partnership, association,
trust or other entity of which securities or other ownership interests representing more than fifty
percent (50%) of the equity interests or more than fifty percent (50%) of the ordinary voting power
(or, in the case of a partnership, more than fifty percent (50%) of the general partnership
interests) are, as of such date, owned by such specified party or one or more Subsidiaries of such
specified party or by such specified party and one or more Subsidiaries of such specified party.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Subsidiary Documents</B>&#148; is defined in <U>Section&nbsp;3.1(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Substantial Creditors</B>&#148; is defined in <U>Section&nbsp;5.5(b)(ii)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Superior Proposal</B>&#148; means any bona fide written proposal to acquire at least 50% of the
outstanding voting securities of the Company or 50% or more of the consolidated assets of the
Company and its Subsidiaries taken as a whole that is no more conditional than this Agreement as
then in effect, and otherwise is on terms which the Board of Directors determines in good faith,
after consultation with the Company&#146;s outside legal counsel and any Company financial advisor, to
be materially more favorable to the holders of Company Ordinary Shares than the Merger solely from
a financial point of view, taking into account the value of the Merger Consideration payable per
Company Ordinary Share and all the terms and conditions of such proposal (including the likelihood
and timing of consummation thereof) and the terms and certainty of this Agreement (including any
changes to the terms of this Agreement proposed by Parent to the Company in writing in response to
such proposal or otherwise).


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Surviving Company</B>&#148; is defined in <U>Section&nbsp;1.1</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Tail Policy</B>&#148; is defined in <U>Section&nbsp;5.2</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Takeover Proposal</B>&#148; means any bona fide proposal or offer from any Person or group of Persons,
other than Parent and its Subsidiaries, relating to any (a)&nbsp;direct or indirect acquisition (whether
in a single transaction or a series of related transactions) of assets of the Company and its
Subsidiaries (including securities of the Company&#146;s Subsidiaries) with a value equal to twenty
percent (20%) or more of the aggregate Merger Consideration payable hereunder to the holders of
Company Ordinary Shares, (b)&nbsp;direct or indirect acquisition (whether in a single transaction or a
series of related transactions) of beneficial ownership of twenty percent (20%) or more of any
class of equity securities of the Company or any of its Subsidiaries, (c)&nbsp;tender offer or exchange
offer that if consummated would result in any Person beneficially owning twenty percent (20%) or
more of any class of equity securities of the Company or any of its Subsidiaries, (d)&nbsp;merger,
consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries, in each case, other than the
Merger or (e)&nbsp;arrangement under Section&nbsp;350 of the Israeli Companies Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>TASE</B>&#148; means the Tel-Aviv Stock Exchange.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Taxes</B>&#148; means (a)&nbsp;all federal, state, local, or provincial (whether Israeli, U.S. or non-U.S.
taxes, charges, fees, imposts, levies or other assessments, including all net income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
capital stock, license, withholding, payroll, employment, social security, national insurance,
unemployment, excise, severance, stamp, occupation, property and estimated taxes, betterment taxes,
customs duties, fees, assessments and charges of any kind whatsoever imposed by any Governmental
Authority, (b)&nbsp;interest, penalties, linkage, fines, additions to tax or additional amounts imposed
by any Governmental Authority in connection with any item described in <U>clause&nbsp;(a)</U>, and
(c)&nbsp;any transferee liability in respect of any items described in <U>clauses (a)&nbsp;</U>and/or (b)&nbsp;of
any Person payable by reason of contract, assumption, transferee liability, operation of Law or
otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Tax Return</B>&#148; means any return, report, claim for refund, estimate, information return or
statement or other similar document relating to or required to be filed with any Governmental
Authority with respect to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Technology</B>&#148; means, collectively, all designs, formulas, algorithms, procedures, techniques,
ideas, know-how, Software, databases and data collections, Internet websites and web content,
tools, inventions (whether patentable or unpatentable and whether or not reduced to practice),
invention disclosures, developments, creations, improvements, works of authorship, other similar
materials and all recordings, graphs, drawings, reports, analyses, other writings and any other
embodiment of the above, in any form or media, and all related technology, documentation and other
materials used in, incorporated in, embodied in or displayed by any of the foregoing, or used in
the design, development, reproduction, maintenance or modification of any of the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Termination Date</B>&#148; means March&nbsp;31, 2012; <U>provided</U>, that the Termination Date may be
extended at Parent&#146;s sole election by no more than 45&nbsp;days in the aggregate if on such date (a)&nbsp;the
Company Shareholder Meeting has not yet been held, (b)&nbsp;there are any Restraints then in effect
which are being challenged or appealed by Parent or at Parent&#146;s request, (c)&nbsp;any Required
Regulatory Consents or Other Approvals are then pending or have not been finally denied or (d)&nbsp;the
applicable waiting periods in <U>Section&nbsp;6.1(c)</U> have not yet expired.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Termination Fee</B>&#148; is 4% (four percent) of the Total Consideration.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Total Consideration</B>&#148; means the Aggregate Merger Consideration together with the aggregate
Option Consideration that the holders of Options are entitled to receive pursuant to
Section&nbsp;2.3(a).


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Trade Secrets</B>&#148; means confidential and proprietary information, or non-public processes,
designs, specifications, technology, know-how, techniques, formulas, inventions, concepts, trade
secrets, discoveries, ideas and technical data and information.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Transaction Expenses</B>&#148; means out-of-pocket fees and expenses incurred by or on behalf of (or
payable by) the Company or its Affiliates (or by the Surviving Company as successor by merger to
the Company) in connection with or in contemplation of the Transactions, including, without
limitation, any fees and expenses of legal counsel, financial advisors, investment bankers and
accountants, proxy solicitors, public relations firms and investor relations firms.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Transactions</B>&#148; refers collectively to the Merger and the other transactions contemplated by
this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>VAT</B>&#148; means value added or equivalent Taxes with respect to any applicable jurisdiction or
transaction.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Withholding Tax Ruling</B>&#148; is defined in <U>Section&nbsp;5.12(c)</U>.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Working Capital</B>&#148; means, as of the applicable time, the current assets of the Company and its
Subsidiaries (excluding cash and cash equivalents) on a consolidated basis <U>less</U> the current
liabilities of the Company and its Subsidiaries (excluding current maturities of long term bank
loans and convertible debt) on a consolidated basis, in each case determined in accordance with
IFRS consistent with year-end audited financial statements.


<P align="left" style="font-size: 12pt; text-indent: 4%">&#147;<B>Working Capital Statement</B>&#148; means an unaudited statement and calculation of the Working
Capital setting forth the Company&#146;s Working Capital.


<P align="left" style="font-size: 12pt; text-indent: 4%">SECTION 8.11. <U>Interpretation</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;When a reference is made in this Agreement to an &#147;Article&#148;, a &#147;Section&#148;, &#147;Exhibit&#148;&nbsp;or
&#147;Schedule&#148;, such reference shall be to an &#147;Article&#148;&nbsp;of, a &#147;Section&#148;&nbsp;of, or an &#147;Exhibit&#148;&nbsp;or
&#147;Schedule&#148;&nbsp;to, this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words &#147;include&#148;, &#147;includes&#148; or
&#147;including&#148; are used in this Agreement, they shall be deemed to be followed by the words &#147;without
limitation.&#148; The words &#147;hereof&#148;, &#147;herein&#148; and &#147;hereunder&#148; and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter genders of such
term. Any Law defined or referred to herein or in any agreement or instrument that is referred to
herein means such Law as from time to time amended, modified or supplemented, including by
succession of comparable successor Laws and references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its permitted successors and assigns.
Except as otherwise expressly specified herein, all references to &#147;USD&#148;, &#147;Dollars&#148;, &#147;cents&#148; or &#147;$&#148;
shall be deemed to be references to currency of the United States of America, unless otherwise
specified.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed, interpreted, applied and enforced as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the purported authorship of any specific provision of this Agreement.


<P align="center" style="font-size: 12pt"><I>&#091;signature page follows&#093;</I>



<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered as of the date first above written.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="3" valign="top" align="left">Solbar Industries Ltd.</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Shaul Shelach</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Shaul Shelach</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title: Chief Operating Officer</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Ami Boehm</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">Name: Ami Boehm
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><BR></DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title: Director</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Mark Palmquist</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Mark Palmquist</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title: Executive Vice President and Chief Operating Officer,<BR>
Ag Business</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD colspan="3" valign="top" align="left">Science Merger Sub Ltd.</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Mark Palmquist</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name: Mark Palmquist</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title: Executive Vice President and Chief Operating Officer,<BR>
Ag Business</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt; display: none">




<!-- v.121908 -->
</BODY>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>exhibit2.htm
<DESCRIPTION>EX-99.1
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-99.1 </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

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


<P align="left" style="font-size: 10pt"><FONT style="font-size: 11pt">For immediate release
</FONT>

<P align="left" style="font-size: 11pt">Information: Annette Degnan, 651-355-5126, <U>annette.degnan@chsinc.com</U>


<P align="left" style="font-size: 11pt; text-indent: 13%"><B>CHS signs agreement to acquire soy protein firm Solbar</B>


<P align="left" style="font-size: 11pt">ST.&nbsp;PAUL, Minn., Nov. 23 &#151; CHS, the nation&#146;s leading farmer-owned cooperative today announced it
has signed an agreement with Solbar Industries Ltd., a global leader in specialty soy proteins and
soy isoflavones to acquire 100&nbsp;percent of the shares of Solbar. The purchase price reflects an
equity value of approximately $133&nbsp;million.


<P align="left" style="font-size: 11pt">Provided all conditions are met, the parties anticipate closing on the CHS acquisition of Solbar in
the first quarter of calendar 2012. Among the required conditions are the approval of the
shareholders of Solbar and antitrust approvals in certain jurisdictions outside the United States.


<P align="left" style="font-size: 11pt">Solbar provides soy protein ingredients to manufacturers in the meat, vegetarian, beverage, bars
and crisps, confectionary, bakery, and pharmaceutical manufacturing markets. Solbar corporate
offices are in Ashdod, Israel, with manufacturing and logistics facilities in Ashdod and Ashkelon,
Israel; South Sioux City, Nebraska; and Ningbo, China; and a sales office in Oakdale, Minn. Solbar
is a public company, traded on the Tel Aviv Exchange since 2004.


<P align="left" style="font-size: 11pt">CHS Inc. (www.chsinc.com) is the nation&#146;s leading cooperative, owned by farmers, ranchers and
co-ops across the United States. A diversified energy, grains and foods business and a Fortune 100
company, CHS is committed to providing the essential resources that enrich lives around the world.
CHS supplies energy, crop nutrients, grain, livestock feed, food and food ingredients, along with
business solutions including insurance, financial and risk management services. The company
operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex&#174; brand
refined fuels, lubricants, propane and renewable energy products. CHS preferred stock is listed on
the NASDAQ at CHSCP.


<P align="left" style="font-size: 11pt; text-indent: 19%"># # # #



<P align="center" style="font-size: 10pt; display: none">




<!-- v.121908 -->
</BODY>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
