Summary of Principal Terms

The following is a summary of the Fund 's terms and IS qualified in its entirety by reference to the more detailed terms included in 'he Partnership Agreement of the Fund

The Partnersblp

The General Partner

Fund Manager

r Investment Objeetlve

Size of Fund,

Commitment of the " General Partner and it, Affiliat~

Minimum LimIted Partner, Commitment

Closings

Markstone Capital Partners, L.P., a Delaware limited partnership.

Markstone Capital Group, LLC. a Delaware limited liability company.

Markstone Investment Management, LLC, a Delaware limited liability company.

The Fund will seek to achieve long-term capital growth and will employ a value-oriented approach to investing in pritl'larily old-economy Israeli companies. The Fund will, invest almost exclusively in companies incorporated in Israel and Israel-related companies abroad that the General Partner determines demonstrate a link with Israel ("Israeli Investments"),

$500 million, subject to increase or decrease at the dlscretion of the: Genera! Partner.

The General Partner and its affiliates will contribute 5% of the Partnership's aggregate Capital Commitments up to a maximum of$2!i million.

$10 million by each Limited Partner or such lesser amount as determined by and at the sole discretion of the General Partner (,·Capital Commitments").

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The initial closing date (the "Initia.l Closing") will occur as soon as practicable. Subsequent closings may occur at the discretion of the General Parmer, provided that the final closing date (the "Final Closing") will occur not later than fifteen months after the Initial Closing. Investors that become Limited ' Partners after the Initial Closing will be required to' contribute to the Partnership (a) an amount which, when taken together with all capital contn"butions made by other Limited Partners, represents such Limited , Partner's ratable share (based on the Limited. Partners' respective Capital Commitments) of all capital contributed to the Partnership (other than capital contributions used to pay the Management Fee) plus (b) interest at the Prime Rate + 2% on 'the amount described in (8) above from the date on which the other Limited Partners' related contributions were mede to the date of such. closing. The amount of such contribution will be distributed by the Partnerswp to the Partners that participated in prior closings and such distributed amounts may be redrawn by that Partnership. In addition to making the foregoing capital contribution, each Partner participatUlg in Ii subsequent closing will be required to contribute to the Partnership ita proportionate share of the Management Fee payable to the General Partner with respect to the additional Capital Commitments made 8.11 of suoh subsequent closing as if such additional Capital Commitments were made at the initial closing. plUt> interest at the Prime Rate + 2% from the day of the Initial Closing.

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Term

Commitment Perlod

Investment Restrlctions

Investor Advisory Committee

Strategic AdYisory Board

Management Fee

The Partnership will terminate on the tenth anniversary of the Initial Closing. The Tenn of the Partnership m·IIY be extended at the option of the General Partner for up to two additional one-year periods with the 'consent of the Investor Advisory Committee, The Partnership will be subject to early termmation and dissolution under certain eireumstences as provided in the Partnership Agreement.

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The Commitment Period will extend to the tifth anniversary of the Final Closing.

The Partnership's investments will be subject to [he following investment restrictions. Without the consent of the Investor Advisory Committee, the General Partner may not invest:

• more than 20% of the aggregate Capita) Commitments in the securities of anyone portfolio company;'

• more than 10% of the aggregate Capital Commitmentsin technology and biotechnology companies;

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• more: than 10% of'the aggregate ,Capital Commitments in portfolio companies that are not Israeli Investments; or

• in any blind pool investment vehicles that charge management fees

(including incentive fees or carried loterests).

The Investor Advisory Comml¢ee wUl be comprised of representatives of certain Limited Pat):ners aJ apPolot.ed by the General Partner. The General Partner shall disclose to the Investor Advisory Committee the resolution of any conflicts. The Investor Advisory Committee shall also review and have a right to objeot to tl)II! valuation of portfolio investments by the General Partner and shall have the right to approve extensions of the Fund's term.

The General Partner will appoint a Stia1ogiC: Advisory Board to be comprised of experienced investment professionals to provide investment and strategic advice to the General Partner and the Fund Manager. The General Partner or ita affiliates will be responsible for annual fees payable to the Strate~c Advisory Board.

The Limited Partnera will pay the Fund Manager a Management Fee, payable quarterly i.il advance and pro ra.ted for any partial quarter through the termination of the Partnership (the "Management Fee"), During the

. Commitment Period., the Management Fee will equal 2% per annum of the aggregate Capital Commitments. Thereafter, the Management Fee will equal 2% per annum oBhe aggJegate amount ofunretumcd invested capital. Drawdowne of capital used to pay the Management Fee will not reduce a Partner's UJ1fuuded Capital Commitment.

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Director, Transaetion, Advisory. ~onltorlng, and Other Fees

Organizational Expenses

Operating Expen.es

Distributions

To the extent that the amount of transaction fees, advisory foes. 'directors fees. monitoring fees, and other similar fees received by the General Parmer, its affiliates, or its employees (collectively "Fee Income") exceeds unreimbursed transaction expenses, including unrelmbursed unconsummated transaction expenses paid by the General Partner." 80% of such excess Fee Income win be applied to reduce the Management Fee.

-The Partnership will pay all organizational and offering expenses incurred in conjunction with the establishment of the Partnership. the start up of its investment activities and the sale of interests up to 0. maximum of $] .5 million, To the extent such organizational and offering expenses exceed this amount, they will be borne by the General Partner.

The General Partner or the Fund Manager will bear the normal recurring day-to-day expenses of the operation ofb Partnership, which will consist primarily of compensation of personnel and facilities expense. All other expenses of the Partnership and its operations will be borne by the Partnership, including but not Iimited to legal, auditing, consulting, custodial, bookkeeping and accounting fees and expenses, indemnification and insurance expenses, expeeses of meetings of the Investor Advisory Committee, the Strategic Advisory Board and of the Limited Partners, expenses associated with the acquisition, holding, and disposition of Its proposed and actual portfolio investments, extraordinary expenses (such as litigation), expenses relating to unconsummated transactions, all expenses of liquidating the Partnership, and taxes, fees and other governmental charges levied against we Partnership.

Investment proceeds from each port~g!io investment will be apportioned among the Partners participating in ~ch portfolio investment in proportion to their relative capital contributions to such portfolio investment. In general. investors will receive distributions with respect to a portfolio investment in the following order of priority:

(i) ll)OQ/o to the Partners, in proportion to their respective capital ccetributtons, until such time as all Partners shall have received an amount equal to the aggregate of (a) their cumulative capital contributions allocable to all portfolio investments disposed of or

- written -down (as !I. whole Dr in part to the extent thereof} lIB oftbe time of such distribution. and (b) their capitaJ contnbutions made in respect of Organizational and Operating Expenses and Manag~ent Fees allocable to all portfolio investments disposed of or written -down (as a whole or inpart to the extent thereofjas of tbe time of such distribution;

(il) 100% to the Partners, in proportion to their respective capital contributions, until the amount distributed to the PartnenJ, together with cumulative amoUnts previously distributed to the Partners pursuant to this clause (ii) and clause (iv)(A) below, equals 8% per annum on the capital returned pur.ruant to clause (i); -

(iii) 100% to the General Partner until the 8.m<:,unt distributed to tI;l.c General

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GP Clawbaek

Parallel Investment Vehleles

Drawdowns

Reports to Llmited Partners

Valuation

Partner under this clause (iii) equals 20% of the sum of (A) all amounts distributed to the Partners pursuant to clause (ii) above, plus (8) all amounts distributed to the General pursuant to this Clause (iii); and

(iv) (A) 80% to all Partners in proportion to their respective capital

contributions and (B) 20% to the General Partner.

Amounts distributed pursuant to subparagraph (i) in respect of capital contributions for portfolio investments that are disposed of within 15 months of their acquisition can, at the election of the General Partner, be added back to unfunded Capital Commitments and subject to recall by the Fund ..

Upon termination of the Partnership, the General Partner will be required to return to the Partnership distributions previously received if and to the extent that it has received cumulative distributions with respect to its carried interest in excess of amounts otherwise distributable to the General Partner with respect to its carried interest pursuant to "Distributions" above, applied on an aggregate basis coveting all transactions ofthe Partnership. In no event will the General Partner be required to return more than the cumulative distributions received by the General Partner with .. espect to its carried interest, reduced by the amount of tax distributions paid or payable with respect thereto (measured by reference to the highest tax rate in Israel on ordinary ir\come).

In order to facilitate investment by foreign and certain other investors, the General Partner may create OM or more parallel investment entities, the structure of which may differ from that of the Partnership but which will invest proportionately in aU transactions on effectively the same terms and conditions as the Partnership.

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The General Partner will give"'the Limited Partners at least 10 business days' notice of 8lly required capital contributions. All contributions will be required to be funded by the Limited Partners pro rata in accordance with their respective Capital Commitments~ All capital contributions will be payable by wire transfer to the Partnership in immediately available funds.

The Partnership will·fumish audited annual financial statements to all Limited . Partners. All Limited Partners will also receive quarterly unaudited finanoial statements from the Parincrship and annual tax infoDllation necessary for each Partner's tax return.

The General Partner will value the Fund's assets at least annually and in connection with any distribution. The General Pamer will also value any security being distributed in kind as of its date of distribution. or being returned

. to the Fund as of the date of reeelpt by the Fund. The General Partner's valuation will be conclusive and binding on all Limited Partners; provided. however, that if the Investor Advisory Committee objects to a valuetion, the General Partner will attempt to determine an alternative value for the asset in question. If the General Partner and the Investor Advisory Committee cannot thereafter agree on the value of such assets, the value will b~ determined through a binding third-party arrangement.

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)n Funds

rnaUve Investment teles

Active Involvement of Key Execu,t1ves

Key Man Provisions

Co-Iavestmeats

The General Partner will refrain from forming a fund whose investment objective is substantially the same as that of the Partnership until the Partnership is 75% invested, committed for investment or reserved for followon investments or expenses (the "Substantial Investment Date"), This provtsion will not apply to partnerships or other entities fanned for purposes of co-investing, on a consistent percentage basis in respect of the size of each investment, with tbe Partnership in all of the investments in which the Partnership invests.

If the General Partner determines for legal, tax, regulatory or other reasons that investments should not be made through the Partnership, the General Partner may use an alternative investment structure which wiIJ invest alongside or in lieu of the Partnership (an "Alternative Investment Vehicle"). Any Alternative Investment Vehicle will provide for the liinit~d liability of the Limited Partners and will duplicate the economics of the Partnership on a pre-tax basis (except

for differences required for tax or liquidation reasons), Any capital '

contributions to an Alternative Investment Vehicle will reduce the obligation of the Limited Partners to make capital contributions to the Partnership. The

. General Partner may also form additionallimite:d partnerships or other entities ("Parallel Regulatory Vehicles") which will invest alongside the Partnership pro-rata based on their respective capital commitments to, the Partnership anti each such limited partnership if, in its sole discretion, it is advisable to do so to address legal, tax or regulatory requirements of the Limited Partners. The Partnership may transfer assets between the Partnersbip and .the Alternative Investment Vehicles ~ cost in order to maintain asset allocations in proportion

to commitments. '

Until the Substantial Investment Da.t.t;lR~ Lubash and Amir Kess will dev~te SUbstantially all of their business time. and Elliott Broidy will devote a substantial majority of bis business time to managing the Partnership.

The Commitment Period, will end and the obligation oftbe Partners to fund capital calls will be suspended if, during the Commitment Period, (x) any two ofMesl!ll's. Broidy, Lubesh, and Kess (the "Principals") cease to be involved' in the management of the affairs of the Partnership, other than by reason of death or penn anent disability. and (y) two-thirds in interest of all of the Limited Partners vote in writing to suspend the obligation to fund further capital calls; provided, hOWBW", that there will he no suspension of the obligation to fund further capital calls if the General P artner proposes a substitute for a Principal and a. majority in interest oftbe Limited Partners approve such substitution.

The General Partner may, in Its sole discretion, offer to one or more of the Limited Partners the opportunity to co-invest in certain portfolio companies,

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Indemnification

Early Termination

Amendments

Risk Factors

ERISA Mattel's

The Partnership will indemnify the General Partner, the Principals, members of the Investor Advisory Committee, members of the Strategic Advisory Board and their respective members, partners, officers, directors, shareholders, employees, agents and affiliates from and against losses, liabilities, costs and expenses (including attorney's fees.judgmenta and amounts paid in settlement), as incurred, in connection with their activities on behalf of, or their association with, the Partnership, provided that the person seeking such indemnification did not engage in conduct which a court of competent jurisdiction following the expiration of all appeals rights has concluded was fraud, willful misconduct Of gross negligence.

The General Partner will have the right to require each Partner to return to the Partnership an amount equal to all distributions received by such Panner to satisfy any claim; action, demand, liability or expense to the extent that (x) the Partnership does not have adequate liquid assets to satisfy the same, and (y) the unfunded capital commitments of the Partners are insufficient Each Partner' S return obligation wiJI be (i) first, in proportion to the income and gains distributed to such Partner, to the extent thereof, and (ii) second. in proportion to the capital distributed to such Partner, to the extent thccc:of. No Partner will be obligated to return more than the amount distributed to it by the P8{tnership.

In the event that a Principal, the General Partner or the Fund Manager engages in any act or omission involving the: Partnership that results in a final, noneppealable crimi-nal conviction of such person or a final, non-appealable judicial determination that such act or omission constitutes fraud, willful misconduct or gross negligence, two-thirds in interest of all of the Limited Partners may vote in writing to. terminate the Fund and liquidate the Fund's

investments. ...r:. .

The Partnership Agreement may be amended from time to time with the consent of the General Partner and Limited Partners holding at least a majority of the intereSts in the Partnership. Under certain limited circumstanoes the General Partner has the right to amend the Partnership Agreement without the consent of the Limited Partners.

Investment in the Partnership is subjec.t to significant risks. See "Risk Factors" for a more detailed discussion.

During any period in which the Partnership bolds "plan assets" for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Partnership will use its best efforts to qualify as a venture capital operating company ("VCOC") within the meaning of ERlSA. See "EltISA Considerations."

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us, Feder~l Tax Consi~er8tion8

Isra.eli Income Tax' Considerations

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Legal Ceunsel, U,S. Legal Counsel, Israel

Auditors

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The Partnership expects to be treated as a partnership for U.S. federal income tax purposes; accordingly, each investor will be required to take into account its distributive share of Partnership income, gain, loss, deduction and credit substantially as tbough such items had been realized directly by the Investor. See "Tax and Regulatory Risks" herein.

. The Fund has applied for a ruling from the Income Tax Commission of the Ministry of Finance in Israel (the "Ruling'') with respect tc? the manner iri which Israeli taxes will be imposed on income and gains derived by the Fund, It is expected that the Ruling, if received. will provide for certain tax relief (up to full exemption if certain conditions are met) to non-Israeli investors that are Partners in the Fund based mainly on the authoriry granted to the Minister of Finance pursuant to Section 16A of the Ist~1 Income Tax Ordinance. See "Certain Israeli Tai Considerations" below. The Ruling may be limited in effect to Partners resident in certain jurisdictJons and to Partners of certain status: Receipt of the Ruling is not a conditiOn to any Closing, and no assurance can be given that the Ruling will be issued Of. if issued, that it will . be issued substantially on the terms requested.

O'Melveny & Myers, LLP

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Herzog, Fox, and Neeman

Pricewaterhouse Coopers, LLP

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