Optibase and Scopus Video Networks signed a non-binding term sheet for the sale by Optibase to Scopus of Optibase's digital video and streaming business (the "Business"). In consideration for the purchase of the Business, Scopus will issue Optibase 2,600,000 ordinary shares of Scopus, currently representing prior to the issuance approximately 19% of Scopus' share capital. In addition, the parties agreed on an earn-out mechanism pursuant to which Scopus may issue to Optibase up to additional 900,000 ordinary shares of Scopus subject to achievement of sales goals. Immediately following the closing of such transaction, Optibase will hold approximately 46% of Scopus' issued share capital, or approximately 49% of Scopus' issued share capital, assuming the issuance of the additional share pursuant to the earn-out mechanism.

Optibase and Scopus agreed that all necessary corporate actions will be taken in order to amend Scopus' articles of association such that Scopus will no longer have a staggered board and Scopus shall adopt instead standard provisions regarding the appointment of directors at Scopus' general meeting by an ordinary majority and agreed on the composition of the board of directors following the closing.

Implementation of the abovementioned transaction is subject to the fulfillment of certain conditions precedent standard for transactions of this nature, including, inter alia, completion of due diligence, the conclusion of a definitive agreement, receipt of all necessary approvals and permits and the receipt of shareholders' approval of each of Optibase and Scopus by special majorities. The transaction is expected to close in the fourth quarter of 2008. However, there is no assurance that a definitive agreement providing for the transaction as contemplated by the term sheet will be executed or that the transaction will be consummated at such time or at all.