STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made this 30th day of April,
2008, among PCMT Corporation, a Delaware corporation (the “Company”), Suspect
Detection Systems Ltd., an Israeli corporation (“SDS”), Shabtai Shoval, the
chief executive officer of SDS (the “Principal”), and the shareholders of SDS
that are identified on Exhibit A annexed hereto, including the Principal (each a
“Seller” and collectively the “Sellers”).

RECITALS

A. Sellers are the owners of 100% of the issued and outstanding shares of SDS
(the “Shares”).

B. The persons (the “Optionees”) whose names are set forth on Schedule 5.2
annexed hereto are the owners of 100% of the issued and outstanding securities
of SDS that are convertible or exercisable into shares of SDS (the “SDS
Convertible Securities”).

C. The Company’s common stock, $0.0001 par value (the “Common Stock”), is
registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and quoted for trading on the OTC Bulletin Board.

D. Pursuant to the terms and conditions of this Agreement, Sellers desire to
sell, and the Company desires to purchase, all of the Sellers’ rights, title,
and interest in and to all of the Shares as further described herein.

E. As contemplated by this Agreement, at the Closing (hereafter defined), the
Optionees shall surrender all of the SDS Convertible Securities and all of their
rights, title and interest therein, and in exchange therefor, the Company shall
issue to the Optionees options to purchase shares of Common Stock (the “Company
Options”). The number of shares of Common Stock into which the Company Options
to be granted to each such Optionee at the Closing shall be exercisable shall
equal the aggregate of the Consideration Shares and Underlying Shares issued and
granted at Closing multiplied by the percentage holdings in SDS on a fully
diluted basis represented by the SDS Option Shares held by each Optionee (the
shares of Common Stock underlying the Company Options, the “Underlying Shares”).

NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

1.  Agreement to Purchase and Sell. Subject to the terms and conditions of this
Agreement, at the Closing, the Sellers shall sell, assign, transfer, convey, and
deliver to the Company, and the Company shall accept and purchase, the Shares
and any and all of their respective rights, title and interest in the Shares,
and by doing so Sellers shall be deemed to have assigned all of their rights,
title and interests in and to the Shares to the Company.

 
 

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2.  Consideration.

(a) In consideration for the Shares and the SDS Convertible Securities, at the
Closing the Company shall issue and deliver to the Sellers an aggregate of
21,768,063 shares of Common Stock (the “Consideration Shares”) and to the
Optionees Company Options exercisabe into an aggregate of 6,831,937 Underlying
Shares. The number of Consideration Shares issued to each Seller at the Closing
shall be as indicated next to such Seller’s name on Exhibit A annexed hereto.

(b) The Consideration Shares and the Underlying Shares are intended to represent
31% of (i) the issued and outstanding shares of Common Stock on the earlier of
(x) the date that the Investment Target, as defined in Section 7.1 below, is
achieved (the “Investment Target Achievement Date”) and (y) December 1, 2008
(the “Investment Target Cut-Off Date”), plus (ii) any shares of Common Stock in
excess of 500,000 shares issuable upon the exercise of options, warrants or
other securities convertible into shares of Common Stock or pre-emptive rights,
issued or granted by the Company, or undertaken to be issued or granted by the
Company, after the date of this Agreement and on or before the earlier of the
Investment Target Achievement Date and the Investment Target Cut-Off Date (the
earlier of the Investment Target Achievement Date and the Investment Target
Cut-Off Date, the “Break Date”).  The calculation of 31% of issued and
outstanding shares of Common Stock shall exclude, for all purposes, shares of
Common Stock to be held in escrow pursuant to Section 7.1 below, for the removal
of doubt, whether or not such shares of Common Stock shall be cancelled or
transferred pursuant to Section 7.1 below (the “Escrowed Shares”).  The number
of issued and outstanding shares of Common Stock on the Break Date plus shares
of Common Stock in excess of 500,000 shares issuable upon exercise of options,
warrants or other securities convertible into shares of Common Stock or
pre-emptive rights, as aforesaid, not taking into account the Escrowed Shares as
aforesaid, is referred to hereinafter as the “Net Number of Shares.”  In the
event that the Consideration Shares and the Underlying Shares represent less
than 31% of the Net Number of Shares on the Break Date, the Company shall issue
and deliver such number of additional shares of Common Stock to the Sellers
which, in the aggregate and in addition to the Consideration Shares delivered at
the Closing, shall represent 23.59% of the Net Number of Shares on the Break
Date. It is hereby acknowledged and agreed that the Company Options shall
provide that in such event the amount of Underlying Shares shall be
automatically increased, on a pro-rata basis according to the proportion that
each Optionee’s Underlying Shares bears to the aggregate number of Underlying
Shares at Closing, such that the Consideration Shares and the Underlying Shares
shall represent 31% of the Net Number of Shares on the Break Date. The Sellers
shall not be required to pay any consideration to the Company for the additional
shares of Common Stock issued to the Sellers pursuant to this Section 2(b). 
Additional shares of Common Stock issued pursuant to this Section 2(b) shall be
issued to the Sellers on a pro-rata basis according to the proportion of the
Consideration Shares issued to each Seller at the Closing.

3. Closing.

(a) Time of Closing. The closing shall take place at such time and place (the
“Closing Date”) as the parties hereto may agree (the “Closing”) at any time
after satisfaction or waiver of any other condition or action to be performed on
or prior to Closing under the terms of this Agreement and delivery of all of the
items specified in Section 4 below, provided, however, that the Closing shall
not occur before the completion of the Company’s current report on Form 8-K
regarding the transactions contemplated by this Agreement including, without
limitation, the requisite financial statements, which the Company hereby
undertakes to make its best efforts to complete within 7 calendar days of the
execution of this Agreement.

 
 

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4.  Closing; Deliveries.

(a)  At the Closing, the delivery of the following documents shall occur
simultaneously, and no document shall be deemed to have been delivered until all
required documents are delivered, unless waived:

(1)  Each Seller shall deliver an executed representation letter agreement to
the Company. The form of such representation letter shall be attached hereto at
the Closing as Exhibit B. In addition, each of the Sellers shall deliver to the
Company (A) stock certificates evidencing the Shares held by each of them, duly
endorsed in blank or accompanied by share transfer deeds duly executed in blank,
or other instruments of transfer in form and substance reasonably satisfactory
to the Company, (B) documentary evidence, filed with the Israeli Registrar of
Companies, establishing the due recordation in the share register of SDS of the
issuance of the Shares to each Seller, and (C) such other documents as may be
required under applicable law or reasonably requested by the Company to effect
the transfer of the Shares to the Company.
 
  (2) SDS shall deliver to the Company (A) a legal opinion on behalf of SDS
opining as to matters customary in a transaction of this nature, (B) all the
books and records of SDS, and (C) such other documents as may be required under
applicable law or reasonably requested by the Company to effect the transfer of
the Shares to the Company.
 
(3) The Company shall deliver to each Seller a certificate evidencing the number
of Consideration Shares indicated next to such Seller’s name on Exhibit A
annexed hereto.
 
(4) Mr. Yosef Nahum Bernstein, the Company’s Secretary, shall deliver to the
Company a fully executed copy of an escrow agreement, in form and substance
satisfactory to the Company and the Sellers (the “Escrow Agreement”). The
Sellers shall become a party to the Escrow Agreement. A copy of the Escrow
Agreement shall be delivered by the Company to each of the Optionees at Closing.

(5)  The Company shall deliver a legal opinion to the Principal and the
remaining Sellers from David Lubin & Associates PLLC on behalf of the Company
opining as to matters customary in a transaction of this nature.

(6)  SDS and the Principal shall have delivered to each other a duly executed
employment agreement between SDS and the Principal, in form and substance
satisfactory to SDS, the Company and the Principal. The form of such employment
agreement shall be attached hereto at the Closing as Exhibit D (the “Shoval
Employment Agreement”). The Shoval Employment Agreement shall provide for, inter
alia, the grant of three (3) warrants (the “Shoval Warrants”) to purchase shares
of Common Stock. The terms of each Shoval Warrant shall include that upon the
achievement of a milestone (each Shoval Warrant to provide a different
milestone), the amount of shares of Common Stock exercisable under such warrant
shall equal 3.33% of the total number of outstanding shares of Common Stock at
the time the milestone is achieved at an exercise price of $0.15 per share and
shall provide for cashless exercise.
 
 
 

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(7)  SDS and Eran Druckman shall have delivered to each other a duly executed
employment agreement between SDS and Mr. Druckman, in form and substance
satisfactory to SDS, the Company and Mr. Druckman. The form of such employment
agreement shall be attached hereto at the Closing as Exhibit E (the “Druckman
Employment Agreement”). The Druckman Employment Agreement shall provide for,
inter alia, the grant of three (3) warrants (the “Druckman Warrants”) to
purchase shares of Common Stock. The terms of each Druckman Warrant shall
include that upon the achievement of a milestone (each Druckman Warrant to
provide a different milestone), the amount of shares of Common Stock exercisable
under such warrant shall equal 1.67% of the total number of outstanding shares
of Common Stock at the time the milestone is achieved at an exercise price of
$0.15 per share and shall provide for cashless exercise.

(8)  The Company, the Sellers and Mr. Druckman shall have delivered to each
other a duly executed Registration Rights Agreement, in form and substance
satisfactory to such persons to cover the registration for resale of the
Consideration Shares, Escrowed Shares, the Underlying Shares and shares of
Common Stock issuable upon exercise of the Shoval Warrants and the Druckman
Warrants. The form of such Registration Rights Agreement shall be attached
hereto at the Closing as Exhibit F. Such agreement shall provide for unlimited
piggyback rights from the Closing Date and demand rights available from 18
months from the Closing Date, provided such demand rights shall be available
only if the Company shall have cash and cash-equivalents in an amount equal to
or exceeding $500,000.

(9) The Israeli Office of the Chief Scientist shall have approved the
transactions contemplated by this Agreement and the Company shall deliver to SDS
an executed undertaking, addressed to the Israeli Office of the Chief Scientist,
substantially in the form of Exhibit G hereto.

(10) SDS shall deliver to the Company a waiver, executed by NG - The Northern
Group LP and in form and substance satisfactory to the Company, with respect to
any right or rights of NG - The Northern Group LP under the Amended and Restated
Articles of Association of SDS (the “SDS Articles”) or otherwise associated with
the Series A Preferred Shares of SDS held by NG - The Northern Group LP,
including rights of first refusal, the exercise of which may interfere with the
consummation of the transactions as contemplated by this Agreement. Prior to or
upon the Closing, NG - The Northern Group LP shall have converted said Series A
Preferred Shares of SDS into ordinary shares in SDS on a one-to-one basis.

 
 

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(11) The Optionees shall have executed option agreements in respect of the
Company Options in form and substance satisfactory to the Company and the
Sellers. The terms of such option agreements shall include an exercise price
equal to $0.0001, a ten-year exercise period, shall provide for cashless
exercise and shall include an automatic increase in the Underlying Shares as
contemplated by Section 2(b) above and Section 7.1 below. The form of such
option agreements shall be attached hereto at the Closing as Exhibit H.

(12) The Sellers and the Optionees shall have received pre-rulings from the
Israeli Tax Authority, in form and substance satisfactory to them concerning the
transactions contemplated by this Agreement.

5. Representations and Warranties of SDS. As further inducement to the Company
to enter into this Agreement and to consummate the transactions contemplated
herein, the Principal hereby represents and warrants to the Company that to the
best of his knowledge, as of the date of this Agreement and as of the Closing
Date:

5.1 Organization and Good Standing. SDS is duly organized and validly existing
under the laws of the State of Israel, with full power and authority to own,
lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. SDS does not own, directly or
indirectly, any capital stock of any corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, limited
liability company, joint venture or other entity.

5.2  Capitalization. As of the Closing, the authorized capital of SDS will
consist of (a) 20,000,000 Ordinary Shares, NIS 0.01 par value per share,
authorized, 1,170,295 of which shares are issued and outstanding, fully paid and
non-assessable, (i) with each holder thereof being entitled to cast one vote for
each share held on all matters properly submitted to the shareholders for their
vote, and (ii) there being no pre-emptive or similar rights and no cumulative
voting. Other than as set forth in Schedule 5.2, SDS has no shares reserved for
issuance pursuant to a stock option plan or agreement or pursuant to securities
exercisable for, or convertible into or exchangeable for shares of its capital
stock. All issuances by SDS of shares of its capital stock in past transactions
have been legally and validly effected. All past issuances of shares of SDS were
conducted in full compliance with the requirements of Israeli law and the then
effective Articles of Association of SDS. Other than as set forth on Schedule
5.2 to this Agreement, there are (i) no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of SDS or arrangements by which SDS is or may
become bound to issue additional shares of capital stock, (ii) no agreements or
arrangements under which SDS is obligated to register for resale any of its or
Sellers’ securities under the US Securities Act of 1933, as amended, and (iii)
no anti-dilution or price adjustment provisions contained in any security issued
by SDS (or in any agreement providing any such rights).

 
 

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5.3 Post-Closing Ownership. Upon the consummation of the transactions
contemplated herein, the Company will own 100% of the issued and outstanding
share capital of SDS on a fully-diluted basis.

5.4 Employees. Other than as set forth on Schedule 5.4 to this Agreement, SDS
does not (i) have any employees, (ii) as at the Closing, will not owe any
compensation of any kind, deferred or otherwise, to any person (other than
liabilities with regard to current one-month salaries, current one month social
and other benefits or current reimbursable expenses) including, without
limitation, any agent, representative, consultant, accountant or attorney, (iii)
have any written or oral employment agreement with any person, nor (iv) is it a
party to or bound by any collective bargaining agreement, other than by
operation of law. Other than as set forth on Schedule 5.4 to this Agreement,
there are no loans or other monetary obligations payable to or owing by SDS to
any stockholder, officer, director, agent, representative, consultant,
accountant, attorney or otherwise, nor are there any loans or debts payable or
owing by any such persons to SDS or any guarantees by SDS of any loan or
obligation of any nature to which any such person is a party.

5.5 Intellectual Property.

(a) Schedule 5.5(a) annexed hereto is a complete and accurate list of all the
patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights (the “Intellectual Property”) registered by SDS, or with
respect to which SDS has any rights, and it specifies, where applicable, the
jurisdictions in which each such item of Intellectual Property has been issued
or registered or in which an application for such issuance and registration has
been filed. Prior to the date hereof, the Company has been provided with the
respective registration or application numbers. Other than as set forth in
Schedule 5.5(a), all of the Intellectual Property is valid and subsisting, all
necessary registration, maintenance and renewal fees currently due in connection
with such Intellectual Property have been made and all necessary documents,
recordations and certificates in connection with such Intellectual Property have
been filed with the relevant patent, copyright, trademark or other authorities
in Israel and or in foreign jurisdictions, as the case may be, for the purposes
of maintaining such Intellectual Property. Other than as set forth in Schedule
5.5(a), there is no claim or action by any person pertaining to, or proceeding
pending or threatened, which challenges the right of SDS with respect to any of
the Intellectual Property. Other than as set forth on Schedule 5.5(a), SDS owns
and has good and exclusive title to, or has license (sufficient for the conduct
of its business as currently conducted and as proposed to be conducted) to, each
item of the Intellectual Property free and clear of any Encumbrances (excluding
licenses and related restrictions). Other than as set forth in Schedule 5.5(a),
none of the Intellectual Property is subject to any law, rule or regulation of
the Israeli government, the United States government or any agency thereof, and
there is no outstanding order of any governmental authority of competent
jurisdiction in Israel or in the United States, restricting the use or licensing
of any of the Intellectual Property. For the purposes of this Agreement, the
term “Encumbrances” shall mean all liens, pledges, hypothecations, charges,
adverse claims, options, preferential arrangements or restrictions of any kind,
including, without limitation, any restriction of the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership.

 
 

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(b) Other than as set forth in Schedule 5.5(b), all employees, consultants and
subcontractors of SDS, and any other individual or entity that took any part in
the development of the Intellectual Property, have executed valid and subsisting
agreements duly assigning and transferring all of their rights in the
Intellectual Property to SDS.
 
(c) Other than as set forth in Schedule 5.5(c), SDS is not obligated under any
law, rule, regulation or order of the Israeli government, the United States
government or any agency thereof, or any stipulation or agreement of any kind,
to pay any royalty or other payment to any third party with respect to the
marketing, sale, distribution, manufacture, license or use of any of the
Intellectual Property.

(d) Other than as set forth in Schedule 5.5(d), SDS has not violated and is not
currently violating or infringing on any Intellectual Property of any other
person or entity, and SDS has not received any communication alleging any such
violation or infringement.

(e) Other than as set forth in Schedule 5.5(e), all providers of services to
SDS, and all persons and entities engaged by SDS that would have access to SDS’s
Intellectual Property, have executed valid and subsisting non-disclosure
agreements with SDS with respect to SDS’s Intellectual Property.

(f) SDS has taken reasonable security measures to protect the confidentiality
and value of all of its Intellectual Property.

(g) Except as set forth in Schedule 5.5(g), the Principal is not obligated under
any agreement (including licenses, covenants or other commitments) or subject to
any judgment, decree or order of any court or governmental agency, that would
interfere in a material manner with his ability to carry out his duties to SDS
or to the Company as contemplated by the Shoval Employment Agreement.

(h) Except as set forth in Schedule 5.5(h), SDS has not received any grant or
other benefit from the United States government or the Israeli government,
through the office of the Chief Scientist under the Encouragement of Research
and Development in Industry Law, 5744-1984, or otherwise.

5.6 No Loan Agreements. SDS is not a party to any contract, arrangement or
agreement, whether oral or in writing, including without limitation, loan
agreements, credit lines, promissory notes, mortgages, pledges, guarantees,
security agreements, factoring agreements, letters of credit, powers of attorney
or other arrangements to loan or borrow money or extend credit.

5.7 Taxes. SDS has made or filed all income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations. There are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction, and SDS knows of no basis for any such claim. SDS
has not executed a waiver with respect to the statute of limitations relating to
the assessment or collection of any foreign, federal, state or local tax. None
of SDS’s tax returns is presently being audited by any taxing authority. SDS
expressly assumes and shall pay any taxes due by SDS up to the date of the
Closing.

 
 

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5.8 Licenses. SDS is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted (collectively, the
“Permits”), and there is no action pending or threatened regarding suspension or
cancellation of any of the Permits. SDS is not in conflict with, or in material
default or violation of, any of the Permits. SDS has not received any
notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts, defaults or
violations that have not been resolved.

5.9 Real Property. SDS does not own any real property.

5.10 Information. All information relating to or concerning SDS that has been
provided to the Company and all of the representations and warranties of the
Principal set forth in this Agreement and otherwise in connection with the
transactions contemplated hereby, are true and correct in all material respects
and the Principal has not omitted to state any fact necessary in order to make
the statements made herein or therein, in light of the circumstances under which
they were made, not misleading. No event or circumstance has occurred or exists
with respect to SDS or its business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by SDS but which has not been so publicly
announced or disclosed. There is no fact known to the Principal that has
specific application to the Shares and that materially adversely affects or, as
far as can be reasonably foreseen, materially threatens the Shares that has not
been set forth in this Agreement.

6. Representations and Warranties of the Company. As an inducement to Sellers
and the Principal to enter into this Agreement and to consummate the
transactions contemplated herein, the Company hereby represents and warrants to
each of the Sellers and to the Principal that as of the date of this Agreement
and as of the Closing Date:

6.1 Organization and Good Standing. The Company is duly organized, validly
existing and in good standing under the applicable laws of the state of its
incorporation and has full power and authority to own, lease, use and operate
its properties and to carry on its business as and where now owned, leased,
used, operated and conducted.

6.2 Authority. The execution and delivery of this Agreement and the documents
ancillary hereto, and the transactions contemplated hereby and thereby, have
been duly approved by the board of directors of the Company and does not require
the approval of the shareholders of the Company. This Agreement and the
documents ancillary hereto constitute the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with the terms
hereof and thereof.

 
 

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6.3  Consents. All material consents, approvals, authorizations and orders,
required for the consummation by the Company of any of the transactions on its
part contemplated under this Agreement and the documents ancillary hereto, have
been obtained, and all reports required by the Company with any governmental
authority prior to the execution of this Agreement have been made.

6.4 No Conflict. None of the execution, delivery, or performance of this
Agreement and the documents ancillary hereto, and the consummation of the
transactions contemplated hereby and thereby, conflicts or will conflict with,
or (with or without notice or lapse of time, or both) result in a termination,
breach or violation of (i) to the best of the Company’s knowledge, any
instrument, contract or agreement to which the Company is a party or by which it
or its assets is bound; (ii) the certificate of incorporation and by-laws of the
Company, or (iii) to the best of the Company’s knowledge, any federal, state,
local or foreign law, ordinance, judgment, decree, order, statute, or
regulation, or that of any other governmental body or authority, applicable to
the Company.

6.5 Company Shares. The Consideration Shares are duly authorized and will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Encumbrances and in full compliance with all U.S. federal and state securities
laws. The Underlying Shares, the shares of Common Stock issuable upon exercise
of the Shoval Warrants and the Druckman Warrants and the additional shares that
may be issued pursuant to Section 2(b) hereof and additional shares that may be
issuable under the Company Options, when issued, will be duly authorized and
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Encumbrances and in full compliance with all U.S. federal and state
securities laws. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this Agreement
and all documents ancillary hereto and will from time to time reserve any
additional number of shares of Common Stock that may be issuable pursuant to
this Agreement and all documents ancillary hereto. All of the outstanding shares
of capital stock of the Company are validly issued, fully paid and
nonassessable, and none of such outstanding shares was issued in violation of
any preemptive rights, rights of first refusal or similar rights to subscribe
for or purchase securities and were issued in full compliance with all U.S.
federal and state securities laws.

6.6 Company Reports. The Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by the Company with the
Securities and Exchange Commission pursuant to the requirements of the Exchange
Act. To the best knowledge of the Company, as of their respective dates, all
reports, schedules, forms, statements and other documents filed by the Company
with the Securities and Exchange Commission (the “SEC Documents”) complied in
all material respects with the requirements of the Exchange Act and applicable
rules and regulations as in effect at the time of filing, and none of the SEC
Documents, at the time they were filed, contained any untrue statement of a
material fact or omitted to state a 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.

 
 

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6.7 Litigation. There is no civil, criminal or administrative suit, claim,
hearing, inquiry, action, proceeding or investigation pending, to which the
Company is a party, or to the best of the Company’s knowledge, threatened in
writing to the Company, against the Company, except as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the Company and its business. The Company is not subject to any outstanding
order, writ, injunction or decree, except as would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Company or its business. There has not been, and to the best knowledge of the
Company, there is no pending or contemplated, civil, criminal or administrative
suit, claim or investigation, including by the Securities and Exchange
Commission, in which the Company or any current or former officer or director of
the Company, in his or her capacity as such, is a party or the subject thereof.

6.8 Major Shareholders. To the best of the Company’s knowledge, other than as
set forth on Schedule 6.8 to this Agreement, no shareholder or group of
shareholders of the Company has beneficial ownership of more than 4.99% of any
class of the Company’s equity securities. For the purposes of this Section 6.8,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act, and Rule 13d-3 thereunder. Schedule 6.8 sets forth the amount of
issued shares of Common Stock. Other than as set forth in Schedule 6.8, there
are no outstanding options, warrants or other securities convertible or
exercisable into shares of Common Stock.

6.9  Listing and Maintenance Requirements. The shares of Common Stock are
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from the OTC Bulletin Board to
the effect that the shares of Common Stock will not continue to be listed for
trade on the OTC Bulletin Board. The Company is, and has no reason to believe
that the shares of Common Stock will not in the foreseeable future continue to
be listed for trade on the OTC Bulletin Board.
 
7. Covenants.

7.1 Escrowed Shares.  On the Closing Date, Mr. Yosef Nachum Bernshten, the
Company’s Secretary, will forfeit and relinquish 7 million shares of Common
Stock that are registered in his name, by depositing such shares, which shall be
free and clear of any Encumbrances, in an escrow account to be managed by David
Lubin & Associates, PLLC, pursuant to the Escrow Agreement. If the Investment
Target is achieved on or before the Investment Target Cut-Off Date, the Escrowed
Shares shall be cancelled without payment of any consideration. Alternatively,
if the Investment Target is not achieved on or before the Investment Target
Cut-Off Date, then, as described in Schedule 7.1 hereto (a) a portion of such
Escrowed Shares will be transferred to the Sellers, on a pro-rata basis
according to the proportion of the Consideration Shares issued to each Seller on
the Closing Date, without payment of any consideration by Sellers, (b) the
remaining Escrowed Shares shall be cancelled by the Company, and (c) the number
of Underlying Shares issuable upon exercise of the Company Options shall be
automatically increased by the amount of such cancelled shares on a pro-rata
basis according to the proportion of the Underlying Shares of each Optionee’s
Company Option at the Closing. The term “Investment Target” means the actual
receipt by the Company of an aggregate amount of at least $1.5 million through
the sale of non-debt equity securities of the Company during the period
commencing October 2, 2007 and ending on December 1, 2008. It is hereby
acknowledged that as of the date of this Agreement the Company has received
$1,060,700.50 towards the Investment Target and the use of such monies by the
Company is not restricted in any manner.
 
 

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7.2 Directors. For so long as the Sellers shall collectively hold at least 5% of
the outstanding Common Stock, Shabtai Shoval shall have the right to appoint one
member of the Company’s board of directors.

7.3 Officers. On or prior to the Closing Date, the resignations of Yosef Nachum
Bernstein and Nachman Shlomo Cohen as officers of the Company shall become
effective and, provided the Closing has occurred, Shabtai Shoval shall be
appointed to serve as the chief executive officer of the Company.

7.4 Ownership of Shares. The Company acknowledges that the transactions
contemplated under this Agreement by the Sellers and the Optionees are being
performed under Section 103 of the Israeli Income Tax Ordinance [New Version],
5721-1961 (the “Ordinance”). For the purpose of complying with Section 103 of
the Ordinance, the Company hereby agrees and undertakes, to the best of its
ability and knowledge, from the Closing, not to take any action which might be
anticipated to result in a violation of the terms and conditions of Section 103
of the Ordinance, which terms and conditions include, inter alia, subject to
certain exceptions, the Company retaining all of the ownership rights acquired
by the Company in SDS pursuant to this Agreement, SDS retaining the ownership
rights in its assets and restrictions as to the issuance of additional shares of
Common Stock, during the period commencing on the Closing Date and ending two
(2) years from the end of the calendar year in which the Closing occurs.

8.  Indemnification; Survival.

8.1  Indemnification. The Principal shall indemnify and hold harmless the
Company its agents, beneficiaries, affiliates, representatives and their
respective successors and assigns (collectively, the “Company Indemnified
Persons”) from and against any and all damages, losses, liabilities, taxes,
costs and expenses (including, without limitation, attorneys’ fees and costs)
(collectively, “Losses”) resulting directly or indirectly from (a) any
inaccuracy, misrepresentation, breach of warranty or non-fulfillment of any of
the representations and warranties made by the Principal and contained in
Article 5 of this Agreement and in the representation letter agreement referred
to in Section 4(a)(1), or any actions, omissions or statements of fact
inconsistent in any material respect with any such representation or warranty,
(b) any failure on the part of SDS or the Principal to perform or comply with
any agreement, covenant or obligation in this Agreement; provided, however, that
(i) the indemnification provided by the Principal pursuant to this Section 8.1
shall terminate on the second anniversary of this Agreement, and it shall have
no further force or effect thereafter, notwithstanding anything to the contrary
contained in any provision of this Agreement or applicable law; and (ii) the
indemnification provided by the Principal under this Section 8.1 shall be
limited, in that the Principal’s total liability to the Company and to any other
Company Indemnified Person, in the aggregate, for all claims made under this
Section 8.1, by the Company and any other Company Indemnified Person, at any
time or from time to time, shall not exceed $10,000 and shall be satisfied and
recoverable only through surrender by the Principal to the Company and
forfeiture of shares of Common Stock with a fair market value equal to the
relevant Losses up to a maximum aggregate amount of $10,000. If a claim for
indemnification is made by any Company Indemnified Person other than the
Company, the Company shall make a cash payment to the Company Indemnified Person
in an amount equal to the fair market value of the shares of Common Stock
surrendered by the Principal. For the purposes of this Section 8.1, fair market
value shall mean the average of the closing bid and ask prices for a share of
Common Stock as quoted by the OTC Bulletin Board (or other US market or exchange
on which the Common Stock is listed or quoted for trading if not listed or
quoted for trading on the OTC Bulletin Board) on the five (5) trading days
immediately following the date on which the Company Indemnified Person notifies
the Principal, in writing as required pursuant to Section 10.2 below, that he
has a claim for indemnification under this Section 8.1. If the price of a share
of Common Stock is not so reported, the fair market value of a share of Common
Stock shall be determined by agreement in good faith between the Company and the
Principal.

 
 

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The Company shall indemnify the Principal, the remaining Sellers and SDS, their
agents, beneficiaries, affiliates, representatives and their respective
successors and assigns, and hold each of them harmless from and against any and
all damages, losses, liabilities, taxes, costs and expenses (including, without
limitation, attorneys’ fees and costs) resulting directly or indirectly from (A)
any inaccuracy, misrepresentation, breach of warranty or non-fulfillment of any
of the representations and warranties of the Company in this Agreement, or any
actions, omissions or statements of fact inconsistent in any material respect
with any such representation or warranty, (B) any failure by the Company to
perform or comply with any agreement, covenant or obligation in this Agreement;
provided, however, that (1) the indemnification provided by the Company pursuant
to this Section 8.1 shall terminate on the second anniversary of this Agreement,
and it shall have no further force or effect thereafter, notwithstanding
anything to the contrary contained in any provision of this Agreement or
applicable law; and (2) the indemnification provided by the Company under this
Section 8.1 shall be limited, in that the Company’s total liability to the
Principal, the remaining Sellers and SDS, their agents, beneficiaries,
affiliates, representatives and their respective successors and assigns, in the
aggregate, for all claims made under this Section 8.1 at any time or from time
to time, shall not exceed an aggregate maximum amount of $10,000.
Notwithstanding the aforementioned, the limitations set forth in the previous
sentence shall not apply to Sections 6.5, 6.9 and 7.4.

The provisions of this Section 8.1 shall be the sole and exclusive remedy for
breaches of the matters set forth in said Section.

8.2  Survival. Unless otherwise stated in this Agreement, all covenants and
agreements of the parties contained herein or in any other certificate or
document delivered pursuant hereto shall survive the date hereof until the later
of the expiration of the applicable statute of limitations or the second
anniversary of the date hereof.

9.  Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned at any time prior to the Closing, by the
Company or by SDS, if (a) the Closing shall not have been consummated by October
31, 2008, or (b) any injunction or order of any governmental authority
permanently restraining, enjoining or otherwise prohibiting consummation of the
transaction contemplated by this Agreement shall have become final and
non-appealable; provided, however, that the right to terminate this Agreement
pursuant to this Section 9 shall not be available to any party that has breached
its obligations under this Agreement in any manner that shall have proximately
contributed to the failure to consummate the transactions contemplated by this
Agreement.

 
 

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10.  Miscellaneous.

10.1 Further Assurances. From time to time, whether at or following the Closing,
each party shall make reasonable commercial efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable, including as required by applicable laws, to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.

10.2  Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed duly given (a) if by personal
delivery, when so delivered, (b) if mailed, three (3) business days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below (or ten (10)
business days if the address to which such notice is addressed is not in the
same country in which such notice is mailed), or (c) if sent through an
overnight delivery service in circumstances to which such service guarantees
next day delivery, the second day following being so sent to the addresses of
the parties as indicated on Exhibit A annexed hereto. Any party may change the
address to which notices and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth.

10.3  Choice of Law. This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law.

10.4  Jurisdiction. The parties hereby irrevocably consent to the in personam
jurisdiction and venue of the courts of the State of New York and of any federal
court located in such State in connection with any action or proceeding arising
out of or relating to this Agreement, any document or instrument delivered
pursuant to, in connection with or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument. EACH PARTY HERETO
WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY BREACH OR ALLEGED BREACH HEREOF.
  
10.5 Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersedes all prior and contemporaneous agreements, arrangements and
understandings of the parties relating to the subject matter hereof. No
representation, promise, inducement, waiver of rights, agreement or statement of
intention has been made by any of the parties which is not expressly embodied in
this Agreement.

 
 

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10.6 Assignment. Each party's rights and obligations under this Agreement shall
not be assigned or delegated, by operation of law or otherwise, without the
other parties’ prior written consent, and any such assignment or attempted
assignment without the other parties’ prior written consent shall be void, of no
force or effect, and shall constitute a material default by such party.
Notwithstanding the aforesaid, the Principal shall have the right to assign his
rights under this Agreement to an entity in which the Principal, alone or
together with any of his relatives of the first degree, own 100% of the voting
rights.

10.7  Amendments. This Agreement may be amended, modified, superseded or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties hereto.

10.8 Waivers. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by any party of any condition, or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other term, covenant, representation or
warranty of this Agreement.

10.9 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts and by facsimile, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

10.10 Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination,
the parties shall negotiate in good faith to modify this Agreement so as to give
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the fullest extent possible.

10.11  Interpretation. The parties agree that this Agreement shall be deemed to
have been jointly and equally drafted by them, and that the provisions of this
Agreement therefore shall not be construed against a party or parties on the
ground that such party or parties drafted or was more responsible for the
drafting of any such provision(s). The parties further agree that they have each
carefully read the terms and conditions of this Agreement, that they know and
understand the contents and effect of this Agreement and that the legal effect
of this Agreement has been fully explained to their satisfaction by counsel of
their own choosing. The various paragraph and/or section headings in this
Agreement are for reference and convenience only and shall not be considered in
the interpretation hereof for any purpose and in no way alter, modify, amend,
limit, or restrict any contractual obligations of the parties.

10.12 Pronouns. The use herein of the masculine pronouns "him" or "his" or
similar terms shall be deemed to include the feminine and neuter genders as well
and the use herein of the singular pronoun shall be deemed to include the plural
as well and vice versa.

 
 

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10.13 Expenses. Each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement, provided that the Company shall participate and
pay SDS and the Principal up to the following amounts upon delivery of itemized
invoices with respect thereto (or shall reimburse them on account thereof) (a)
up to $20,000 in accountant fees incurred by SDS and/or the Principal, including
for obtaining the pre-rulings referred to in Section 4, and (b) up to $15,000 in
legal fees incurred by SDS and/or the Principal. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any securities of the Company as contemplated by this
Agreement.
 
IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement
as of the date first above written.
 
 
PCMT CORPORATION
SUSPECT DETECTION SYSTEMS LTD.
       
By: /s/ Asher Zwebner            
By: /s/ Shabtai Shoval           
Name: Asher Zwebner
Name: Shabtai Shoval
Title: CFO
Title: CEO

 

PRINCIPAL

/s/ Shabtai Shoval 
Name: Shabtai Shoval

SELLER

 
By: /s/ Ishayahu Horowitz 
Name: Ishayahu (Sigi)  Horowitz

SELLER
NG - The Northern Group LP
 
By: /s/ Illegibile 
Name: Illegible
Title: CFO

 
 

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EXHIBIT A

Name of Seller
 
Address
 
SDS Shares Sold
 
Consideration Shares Acquired at Closing
 
Shabtai Shoval
c/o Suspect Detection
Systems Ltd.
121 Habsor
Shoham, Israel
Fax: (972) (0) 3-973-1841
750,000
13,950,371
 
Ishayahu Sigi 
Horowitz
11 Ben Gurion St.
Ramat Gan, Israel
(972) (0) 3-616-1515
250,000
4,650,122
 
NG - The Northern
Group LP
17 Hadar St.
Caesarea, Israel
Fax: (972) (0) 4-626-0816
170,295*
 
3,167,570
 

* Represents Preferred A Shares which are anticipated to be converted by NG -
The Northern Group LP into ordinary shares of SDS upon the Closing.

The address for notices to the Company is:
4 Nafcha Street
 
Jerusalem, Israel
 
95508
 
Fax: 516-887-8253

 
 
 

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EXHIBIT G
 
Form of OCS Undertaking
 

To:
The Research Committee

The Office of the Chief Scientist
Jerusalem

Relating to projects that have been financed by or are currently being financed
by the Office of the Chief Scientist of the Ministry of Industry, Trade and
Labor (the "OCS") (Project no. 34581 and File no. 36325) and to projects of the
Company (as this term is defined below) that may be financed by the OCS in the
future (the "Projects").

 
Undertaking
 

We, the undersigned, PCMT Corporation, a company incorporated, organized and
existing under the laws of the State of Delaware, USA and whose registered
office is at 4 Nafcha Street, Jerusalem, Israel, 95508, having, by an agreement
dated April 30, 2008, purchased 100% of the issued and outstanding share capital
of Suspect Detection Systems (S.D.S.) Ltd. (the "Company");

Recognizing that the Company's research and development Projects are currently,
have been or will be financially supported by the Government of the State of
Israel, through the OCS under and subject to the provisions of The Encouragement
of Research and Development in Industry Law 5744-1984 (the "R&D Law") and the
regulations, rules and procedures promulgated there under;

Recognizing that the R&D Law places strict constraints on the transfer of
know-how and/or production rights, making all such transfers subject to the
absolute discretion of the OCS' research committee (the "Research Committee"),
acting in accordance with the aims of the R&D Law and requiring that any such
transfer receive the prior written approval of the Research Committee;

Hereby declare and undertake:

1.
To observe strictly all the requirements of the R&D Law and the regulations,
rules and procedures promulgated there under, as applied to the Company and as
directed by the Research Committee, in particular those requirements stipulated
under Sections 19, 19A and 19B of the R&D Law relating to the prohibitions on
the transfer of know-how and/or production rights.

2.
As a shareholder of the Company, to make all reasonable efforts that the Company
shall observe strictly all the requirements of the R&D Law and the regulations,
rules and procedures promulgated there under, as applied to the Company and as
directed by the Research Committee, in particular those requirements stipulated
under Sections 19, 19A and 19B of the R&D Law relating to the prohibitions on
the transfer of know-how and/or production rights.

 

     
Date
 
Name (block letters) and signature of Authorized Company Representative and
Company Seal

 
 
 

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