Exhibit 4.8

                     [TRANSLATED FROM THE HEBREW ORIGINAL]


                            SHAREHOLDERS AGREEMENT
                            ----------------------

                Made in Tel Aviv this 27th day of December 2004
                          As amended on 6th July 2005


                                    BETWEEN

                             KOOR INDUSTRIES LTD.
                        Public Company No. 52-001414-3

       of 14 Hamalacha Street, Afek Industrial Park, Rosh Ha'ayin 48091
                                   ("Koor")

                                                                of the one part
                                                                ---------------
                                      AND

                              ELBIT SYSTEMS LTD.
                        Public Company No. 52-004302-7

                of the Advanced Technology Center, Haifa 31053
                                   ("Elbit")

                                                              of the other part
                                                              -----------------

WHEREAS           Koor and Elbit have on signing this Agreement (27th December
                  2004) entered into a share transfer deed (hereinafter
                  referred to as the "Share Transfer Deed"), pursuant to which
                  Elbit will purchase from Koor and Koor will sell to Elbit,
                  in Stage `A' of the Transaction, 1,700,000 Ordinary Shares
                  of 1 NIS par value each of Tadiran Communications Ltd.,
                  which is a public company duly incorporated in Israel
                  (hereinafter the "Company");

AND WHEREAS       after the completion of Stage `A' of the Transaction (as
                  defined in the Share Transfer Deed), Koor will be the holder
                  of at least 2,244,276 Ordinary Shares of 1 NIS par value
                  each of the Company's issued share capital and Elbit will be
                  the holder of at least 2,218,488 Ordinary Shares of 1 NIS
                  par value each of the Company's issued share capital;


<PAGE>


AND WHEREAS       in accordance with the Share Transfer Deed Elbit will
                  purchase from Koor and Koor will sell to Elbit in Stage `B'
                  of the Transaction, as defined in the Share Transfer Deed,
                  after the Amendment thereto, 623,115 Ordinary Shares,
                  although there is a possibility that Stage `B' of the
                  Transaction will not be completed or that, even if Stage `B'
                  of the Transaction is completed, Elbit and Koor will both
                  remain shareholders of the Company;

AND WHEREAS       according to the Share Transfer Deed, Elbit will purchase
                  from Koor and Koor will sell to Elbit in Stage `C' of the
                  Transaction, as defined in the Share Transfer Deed, after
                  the Amendment thereto, 1,621,161 Ordinary Shares, although
                  there is a possibility that Stage `C' of the Transaction
                  will not be completed or that, even if Stage `C' of the
                  Transaction is completed, Elbit and Koor will both remain
                  shareholders of the Company;

AND WHEREAS       the parties wish to set forth the overall relationship
                  between them as shareholders of the Company, as provided
                  below in this Agreement.

NOW, THEREFORE, THE PARTIES HEREBY WARRANT, PROVIDE AND AGREE BETWEEN THEM AS
FOLLOWS:

1.       Preamble, Headings and Interpretation
         -------------------------------------

         1.1        The preamble to this Agreement constitutes an integral
                    part hereof and one of its terms.

         1.2        The clause headings in the Agreement are solely for the
                    sake of convenience and are not to be applied in the
                    interpretation hereof.

         1.3        In this Agreement, the following expressions shall have
                    the meanings ascribed to them, unless expressly stated
                    otherwise:

                    "Shares" or "Shares of the Company" means ordinary shares
                    of 1 NIS par value each in the Company's issued share
                    capital;

                    "Cumulative Holdings" means all the Shares of the Company
                    that the parties to this Agreement hold from time to time;

                    "Transfer" means a sale, gift, realization of a lien (but
                    not the creation of a lien), loan and any other transfer
                    of any kind of a Share and/or any right vested in the
                    Share's owner and/or holder, whether or not for
                    consideration and whether voluntary or involuntary;


<PAGE>


                    "Stock Exchange Sale" means a sale in trading on the Stock
                    Exchange or a sale in a transaction outside the Stock
                    Exchange, through a broker to purchasers whose identities
                    are not known to the seller or a sale to mutual funds in
                    Israel or abroad or provident funds or provident fund
                    management companies;

                    "Qualification Conditions" means all the requirements in
                    accordance with applicable law and pursuant to the
                    Company's incorporation documents for a person to serve as
                    a director of the Company, including security clearance as
                    required in Israel for the purpose of such service;

                    "Core Shares" means 4,462,764 Shares, constituting all the
                    Shares that are held by Koor and/or Elbit on 27th December
                    2004, together with all the bonus shares that may be
                    issued in the future in respect thereof and together with
                    all the Shares that are acquired on issue by virtue of
                    rights that are vested in the context of a rights offering
                    of the Company to its shareholders in respect of those
                    Shares.

         1.4        The following terms shall have the meanings ascribed to
                    them in the Share Transfer Deed: the "First Closing Date",
                    the "Second Closing Date", the "Third Closing Date", the
                    "Stage `A' Completion Deadline", the "Stage `C' Completion
                    Deadline", the "Stage `A' Shares", the "Stage `B' Shares",
                    the "Stage `C' Shares", the "Shares Being Sold", "Stage
                    `A' of the Transaction", "Stage `B' of the Transaction",
                    "Stage `C' of the Transaction", the "Additional Stage",
                    the "Companies Law", the "Stock Exchange", "General
                    Meeting", "Free and Clear", the "Amendment" and "Business
                    Day".

         1.5        The following terms shall have the meanings defined in
                    Section 1 of the [Israel] Securities Law, 5728-1968

                    "securities", "company", "subsidiary", "acquisition of
                    securities", "holding and acquisition" and "control".

         1.6        The following terms shall have the meanings defined in
                    Section 1 of the Companies Law:

                    "dividend", "director", "external director", "public
                    company", "distribution", "bonus shares", "officer",
                    "personal interest", "transaction", "extraordinary
                    transaction" and "act".

2.       The Parties' Warranties and Undertakings
         ----------------------------------------


<PAGE>


         Each party hereby respectively warrants and undertakes to the other
as follows:

         2.1        That it is a duly incorporated public company, that its
                    number with the Companies Registrar is as appears in the
                    preamble hereto and that no actions or proceedings for
                    delisting, liquidation, winding-up, receivership or like
                    acts have been taken or are being threatened against it.

         2.2        That there is no legal or other impediment to its entering
                    into this Agreement and that this Agreement and the
                    performance of its obligations pursuant hereto are not
                    contrary to any judgment, order or direction of a court,
                    to any contract, understanding or agreement to which it is
                    a party, to its incorporation documents or to any other of
                    its obligations, whether by virtue of a contract (oral, by
                    conduct or written) or by virtue of law.

         2.3        That by the time this Agreement enters into effect as
                    provided in Clause 7 below, all the approvals, consents
                    and permits will be obtained and all the necessary
                    proceedings will have been performed, including the
                    approvals of any authorities, government entities or any
                    other body, for its entering into this Agreement and
                    performing its obligations pursuant hereto, and that the
                    signatories on its behalf are those who are empowered to
                    sign this Agreement on its behalf, subject in all cases to
                    obtaining the approval of Elbit's audit committee, board
                    of directors and General Meeting and obtaining the
                    approval of Koor's board of directors to the parties'
                    entering into and performing this Agreement and the Share
                    Transfer Deed.

         2.4        That it is not a party to any voting agreement or other
                    arrangement concerning the Company's Shares with other
                    shareholders of the Company, save for the other party
                    hereto, and it will not enter into any such agreement
                    and/or arrangement so long as this Agreement is in force,
                    except in accordance with the provisions of this Agreement
                    and subject to the provisions of Clause 5.11 below.

3.       Arrangements after the Completion of Stage `A' of the Transaction
         -----------------------------------------------------------------

         After the completion of Stage `A' of the Transaction, as provided in
         the Share Transfer Deed, and until the Second Closing Date, and
         without derogating from the provisions of the Share Transfer Deed,
         the following arrangements shall apply between the parties in
         connection with the Company's management:

         3.1        On completion of Stage `A' of the Transaction, directors
                    shall be appointed to the Company's board of directors in
                    accordance with


<PAGE>


                    Elbit's nomination, as provided in Clause 10.6 of the
                    Share Transfer Deed, and the provisions of Clause 10.6 of
                    the Share Transfer Deed shall be deemed part of this
                    Agreement's provisions.

         3.2        Subject to applicable law, the parties shall act so that
                    on every board of directors' committee of the Company,
                    other than the audit committee, there shall serve at least
                    one director nominated by Elbit, as provided in Clause 3.1
                    above.

         3.3        Subject to applicable law, the parties shall act so that a
                    director of the Company, who has been nominated for the
                    office by Elbit, shall serve as chairperson of the
                    Company's finance committee.

         3.4        After the First Closing Date, the parties shall cooperate
                    at every General Meeting of the Company on the agenda of
                    which is the appointment of directors to the Company, and
                    they shall vote at every such meeting in favor of
                    appointing directors in accordance with Elbit's
                    nomination, as provided in Clause 3.1 of this Agreement,
                    and in favor of the appointment of all the other directors
                    of the Company, including the external directors, in
                    accordance with Koor's nomination.

4.       Arrangements after Completion of Stage `C' of the Transaction or After
         Completion of the Additional Stage
         ----------------------------------------------------------------------

                    After and subject to completion of Stage `C' of the
                    Transaction or after completion of the Additional Stage as
                    provided in the Share Transfer Deed, and without
                    derogating from the provisions of the Share Transfer Deed,
                    if and to the extent that after completion of Stage `C' of
                    the Transaction or of the Additional Stage Koor is a
                    shareholder of the Company, Koor undertakes to participate
                    in every General Meeting and vote in respect of all the
                    Shares held by it on every matter and/or decision that is
                    referred for a resolution of the Company's shareholders in
                    accordance with written instructions that are given to it
                    by Elbit at least seven days before the date the
                    applicable resolution is to be voted on by the Company's
                    shareholders, unless the parties otherwise agree in
                    writing. Koor's said undertaking shall not apply with
                    respect to a resolution of the shareholders concerning the
                    approval of a transaction of the Company in which Elbit or
                    Elbit's controlling shareholders or officers, or any of
                    them, has a personal interest, if such voting as required
                    by Elbit would cause Koor to breach any obligations
                    imposed on it by law. For the avoidance of doubt, it is
                    hereby clarified that Koor shall not be entitled to
                    appoint directors on its own behalf by virtue of its
                    holding those Shares.


<PAGE>


5.       Arrangements between the Parties after Completion of Stage `B' of the
         Transaction
         ---------------------------------------------------------------------

         After completion of Stage `B' of the Transaction as provided in the
         Share Transfer Deed and for so long as Stage `C' of the Transaction
         or the Additional Stage has not been completed, including if Stage
         `C' of the Transaction is rescinded or not performed or if the
         Additional Stage is rescinded or not performed, the following
         arrangements shall apply as between the parties in connection with
         the management of the Company and in respect of all the Cumulative
         Holdings:

         Board of Directors
         ------------------

         5.1        So long as the holdings of each of the parties hereto are
                    not less than the Minimum Holding Percentage, the parties
                    shall act and vote by virtue of all the cumulative
                    Holdings so that there shall be 12 directors on the board
                    of the Company including five who are nominated for office
                    by Elbit, five who are nominated for office by Koor and
                    two external directors, provided that all the directors
                    shall meet the Qualification Conditions. The parties shall
                    also act subject to applicable law so that on all the
                    board of directors' committees there shall be equal
                    representation of the directors who are nominated for
                    office by each party. The parties undertake to act so that
                    this provision is implemented, including, if necessary, by
                    calling a shareholders' meeting of the Company as soon as
                    possible in accordance with applicable law, on the agenda
                    of which shall be the appointment of directors as
                    aforesaid, and they undertake to support the appointment
                    of directors as aforesaid at that meeting.

                    For the purpose of the provisions of this clause 5, the
                    "Minimum Holding Percentage" is 1,478,181 Ordinary Shares,
                    together with all the bonus shares that are allotted in
                    respect of such quantity of shares and all the shares that
                    are acquired on allotment by virtue of rights that are
                    vested in the scope of a rights offer by the Company to
                    its shareholders in respect of such quantity of shares as
                    from the date the Amendment to this Shareholders Agreement
                    becomes effective.

         5.2        (a)      When the term of office of the first of the two
                             external directors serving on the Company's board
                             of directors on the date of signing this
                             Agreement comes to an end, Elbit shall be
                             entitled to nominate a different candidate for
                             the office of external director in his place.
                             When the term of office of the other of the two
                             external directors serving on the Company's board
                             of directors on the date of signing this
                             Agreement comes to an end, Koor shall be entitled
                             to nominate another candidate for the position of
                             external director in his place. Each party shall


<PAGE>


                             act and vote by virtue of all the Shares of the
                             Company that are held by it in favor of the
                             appointment of the candidate nominated by the
                             other party to the position of external director
                             as aforesaid. Said arrangement shall also
                             continue in similar fashion in respect of the
                             appointment to the Company's board of directors
                             of the subsequent external directors so long as
                             there is a legal duty to appoint external
                             directors.

                    (b)      In addition, during the period until the Stage
                             `C' Completion Deadline, if one or two of the
                             five directors who have been appointed on the
                             recommendation of Elbit meet the qualification
                             conditions of an external director, Elbit shall
                             be entitled to propose that the same number of
                             directors (namely one or two) of the five who
                             have been appointed on the recommendation of Koor
                             shall meet the qualification conditions of an
                             external director, and Koor will use its best
                             efforts, subject to the law, to implement Elbit's
                             proposal.

         5.3        Subject to applicable law, the parties shall act so that
                    the Company's articles of association are amended to the
                    effect that the chairperson of the Company's board of
                    directors shall be elected by the Company's General
                    Meeting from among the directors who are then in office,
                    whose office will not expire before the end of that
                    General Meeting or from among the new directors who are
                    elected to office at that General Meeting. It is agreed
                    that the chairperson of the Company's board of directors,
                    for the period of the first 24 months after completion of
                    Stage `B' of the Transaction, shall be a director
                    recommended to that post by Elbit and thereafter for a
                    term of 12 months, the post shall be held by a director
                    recommended to the post by Koor and so on and so forth.
                    The parties shall act by virtue of the Cumulative Holdings
                    to vote in favor of nominees as aforesaid.

         5.4        Subject to applicable law, the parties shall act so that
                    so long as a director recommended by one of the parties
                    hereto serves as chairperson of the Company's board of
                    directors, the Company's finance committee shall be
                    chaired by a director recommended to the post by the other
                    party hereto.

         5.5        If either of the parties wishes the Company to prepare its
                    financial statements also in accordance with US Generally
                    Accepted Accounting Principles (U.S. GAAP), the other
                    party undertakes, subject to the law, to support the same
                    and also to support passing any resolution required for
                    the same by any organ of the Company whose resolution in
                    such respect is necessary.


<PAGE>


         5.6        Should the holdings of either of the parties fall below
                    the Minimum Holding Percentage and provided that its
                    holdings do not fall to less than 9% of the Company's
                    issued share capital, that party shall be entitled to a
                    number of directors equal to its percentage holdings in
                    the Company divided by the total Cumulative Holdings
                    multiplied by the number of directors serving in the
                    Company (rounded to the nearest whole number), provided
                    that the number of directors who are appointed on the
                    recommendation of that party shall not be less than 20% of
                    the number of directors serving in the Company (rounded up
                    to a whole number).

         5.7        Should the holdings of either of the parties fall below
                    the Minimum Holding Percentage and also below 9% of the
                    issued share capital of the Company, provided that its
                    holdings have not fallen below 5% of the Company's issued
                    share capital, that party shall be entitled to a number of
                    directors equal to its percentage holdings in the Company
                    divided by the total Cumulative Holdings multiplied by the
                    number of directors serving in the Company (rounded to the
                    nearest whole number).

         5.8        Should the holdings of either of the parties fall below
                    the Minimum Holding Percentage and also below 5% of the
                    issued share capital of the Company, that party shall not
                    be entitled, pursuant to this Agreement, to representation
                    on the Company's board of directors.

         5.9        It is hereby clarified that if the holdings of a party to
                    the Agreement fall below the percentages specified in
                    Clauses 5.5 to 5.8 above and as a result thereof the
                    number of directors appointed on its recommendation is
                    reduced, as the case may be, that party shall not be
                    entitled to reinstate representation in addition to the
                    representation retained by it, if at all, on the Company's
                    board of directors, even if it subsequently acquires
                    Shares of the Company and again increases its holdings
                    beyond said percentages.

         General Meeting
         ---------------

         5.10       The parties shall coordinate between them in advance the
                    manner in which they will vote on every resolution in the
                    Company's General Meeting. Subject to the provisions of
                    Clauses 5.1 to 5.9 above, the parties shall act and vote
                    by virtue of all the Cumulative Holdings against any
                    proposed resolution in the Company's General Meeting,
                    unless it is first agreed in writing between them to vote
                    in its favor.

         5.11       Should the holdings of a party fall below the Minimum
                    Holding Percentage, provided that its holdings have not
                    fallen below 9% of the


<PAGE>


                    Company's issued share capital, the provisions of Clause
                    5.10 above shall not apply between the parties.

         5.12       Notwithstanding the provisions of Clause 5.11 above, if
                    the holdings of a party fall below the Minimum Holding
                    Percentage and also below 9% of the Company's issued share
                    capital (in this Clause the "First Party"), the First
                    Party undertakes to vote with all its Shares in the
                    Company at every General Meeting in accordance with the
                    other party's instructions, to be given to it in writing
                    at least four days prior to the date of each meeting,
                    except in connection with a shareholders' resolution
                    concerning the approval of a transaction of the Company in
                    which the other party or its controlling shareholders or
                    officers, or any of them, has a personal interest, if so
                    voting would cause the First Party to breach duties
                    imposed on it by law. The other party shall not require
                    the First Party's prior consent as regards its voting by
                    virtue of the Company's shares. Moreover, if the holdings
                    of a party fall below the Minimum Holding Percentage and
                    below 9% of the Company's issued share capital, that party
                    alone shall be bound by the provisions of Clause 2.4 of
                    this Agreement, without the other party being so bound,
                    provided that said party's rights pursuant to this
                    Agreement are not impaired.

         Right of First Refusal
         ----------------------

         5.13       A Transfer of Company Shares from the Core Shares by
                    either of the parties shall not be effective unless made
                    in accordance with the provisions of this Agreement
                    (including a forced sale in receivership or execution
                    proceedings).

         5.14       If either of the parties (in this Clause the "Offeror")
                    wishes to Transfer all or any of the Core Shares it holds
                    to a third party, it shall first offer them to the other
                    party (in this Clause the "Offeree") on the terms and in
                    the manner set out below (in this Clause the "Offer"). The
                    parties hereby give their consent to the granting of a
                    temporary and/or permanent injunction against the making
                    of a transaction that does not comply with the terms of
                    the Clause, and they agree that any transaction whereby
                    either of the parties purports to Transfer the Company's
                    Shares otherwise than in accordance with these provisions
                    shall be null and void.

         5.15       The Offer shall be made in writing and sent to the Offeree.

         5.16       In the Offer, the Offeror shall detail the number of Core
                    Shares that are offered for Transfer (in this Clause the
                    "Offered Shares"), their class, the price requested for
                    each Share (which shall be payable only in cash) and all
                    the material commercial terms in connection with the


<PAGE>


                    Transfer, together with the identity of the purchaser (in
                    this Clause the "Purchaser"), and insofar as the Purchaser
                    is a company, the identity of its controlling
                    shareholders, to the best of the Offeror's knowledge,
                    through the private individuals who control the Purchaser
                    and/or to the companies that control the Purchaser, whose
                    shares are listed for trading on a stock exchange in
                    Israel or the United States. Without derogating from the
                    provisions of Clause 5.22 below, in the case of a sale to
                    an insurance company in Israel, which is purchasing the
                    Shares for investments that are not for its "nostro"
                    and/or to a provident fund and/or trust fund and/or
                    pension fund in Israel, the Offeror shall be entitled to
                    detail a number of insurance companies that are purchasing
                    the Shares otherwise than for their "nostro", and/or
                    provident funds and/or trust funds and/or pension funds,
                    one of which will be the Purchaser. Moreover, in the event
                    of a sale to a provident fund or trust fund or pension
                    fund in Israel, the Offeror need not detail the identity
                    of their controlling shareholders. The Offeree shall keep
                    the contents of the Offer confidential, except as may be
                    necessary in order to exercise its rights pursuant to this
                    Agreement.

         5.17       The Offeree shall be entitled to give written notice to
                    the Offeror within a period of 21 Business Days from the
                    date of receiving the Offer (in this Clause the "Notice
                    Period") that it wishes to accept the Offer and purchase
                    all the Shares offered at the price and on the terms of
                    the Offer (in this Clause the "Acceptance Notice") or that
                    it does not accept the Offer.

         5.18       Should Acceptance Notice be given by the Offeree during
                    the Notice Period, the Shares offered shall be transferred
                    to the Offeree within 14 Business Days of the end of the
                    Notice Period (in this Clause the "Exercise Period"), Free
                    and Clear, in consideration for payment of the price
                    specified in the Offer and on the terms specified in the
                    Offer. Notwithstanding the foregoing if an approval
                    required by law for the Transfer of the Shares offered to
                    the Offeree cannot be obtained during the Exercise Period,
                    the Exercise Period shall be extended by a further period
                    of not more than 21 Business Day (hereinafter in this
                    Clause the "Additional Period"), provided that on
                    obtaining all the approvals required by law during the
                    Additional Period, the Shares offered shall be transferred
                    and the consideration for them shall be paid within two
                    Business Days of the end of the Additional Period.

         5.19       Should Acceptance Notice not be given at the end of the
                    Notice Period or should notice be given to the effect that
                    the Offeree is not accepting the Offer (in this Clause the
                    "Rejection Notice") or should the transaction not be
                    completed within two Business Days of the end of the
                    Additional Period otherwise than due to the Offeror's
                    breach, the Offeror may Transfer to the Purchaser the
                    Shares offered


<PAGE>


                    in consideration for the price specified in the Offer or
                    at a higher price and on the material commercial terms
                    prescribed in the Offer or commercial terms more favorable
                    to the seller, provided that the Shares offered shall be
                    transferred to the Purchaser and all the rights and
                    obligations in accordance with the provisions of this
                    Agreement shall be assigned to it, and provided that the
                    Purchaser assumes all the rights and obligations in
                    accordance with the provisions of this Agreement, subject
                    to the provisions of Clause 5.23 below, within a period of
                    90 Business Days from the end of the Notice Period or from
                    the time the Rejection Notice is given, whichever is
                    earlier.

         5.20       For the purposes of Clauses 5.15 - 5.19 above, a Transfer
                    of Shares from the Core Shares by way of a distribution of
                    a dividend in kind by Koor to its shareholders shall be
                    treated as a Share Transfer made on the date determining
                    the rights to receive the dividend in kind by Koor's
                    shareholders, and such Transfer shall be treated as though
                    made at the average closing price of the Company's Share
                    on the Stock Exchange during the 12 trading days before,
                    and during the 12 trading days after, the date of giving
                    Koor's written Offer as provided in Clause 5.14 above.

         5.21       Notwithstanding the provisions of this Clause 5, a
                    Transfer of Shares from the Core Shares by a party hereto
                    to a related entity shall not be subject to the provisions
                    of this Clause but such a Transfer shall be prohibited and
                    shall be ineffective unless the transferor and transferee
                    have jointly and severally assumed all the transferor's
                    obligations pursuant to this Agreement and confirmed the
                    same in a written notice given in advance to the other
                    party hereto, duly signed by the transferor and the
                    transferee. In this Agreement a "related entity" to a
                    party to the Agreement means a person or entity that
                    controls it or is controlled by it or is under the same
                    control as it, and also an entity to which Shares in the
                    Company are transferred by a party hereto in the course of
                    the transferor party's merger into that entity, pursuant
                    to which the transferor's legal personality is nullified.

         5.22       Notwithstanding the provisions of this Clause 5, a sale on
                    the Stock Exchange of Shares from the Core Shares by a
                    party hereto shall not be subject to the provisions of
                    this Clause 5, provided that it meets all the following
                    conditions: (a) a party to this Agreement shall not sell
                    more than 3% of the Company's issued share capital during
                    a period of 12 months; and (b) a party to the Agreement
                    shall not sell more than 1.5% of the Company's issued
                    share capital in the course of one transaction or one act.
                    Nevertheless, if a party's total holdings of the Company's
                    Shares fall below 5% of the Company's issued share
                    capital, that party may sell the Shares in the course of
                    trading on the Stock Exchange without the application of
                    the provisions of Clauses


<PAGE>


                    5.13 to 5.21. For the avoidance of doubt, the provisions
                    of this Clause 5 shall apply in full to a sale outside the
                    Stock Exchange of Shares from the Core Shares but they
                    shall not apply to a sale on the Stock Exchange or off the
                    Stock Exchange of Shares that are not Core Shares.

         5.23       Condition for Transferring Shares and Joining the
                    Shareholders Agreement
                    --------------------------------------------------

                    Without derogating from the other provisions of this
                    Agreement, including this Clause 5, it is agreed that on
                    any Transfer of Shares from the Core Shares by a party
                    hereto (in this Clause the "Transferor Party") the
                    following provisions shall apply:

                    If the Transferor Party wishes to Transfer all or any of
                    the Core Shares it holds, the Transferor Party may not do
                    so and such a Transfer shall be ineffective unless the
                    recipient of the Shares being transferred (in this Clause
                    the "Acquiror") assumes all the rights and obligations
                    pursuant to this Agreement so that the Transferor Party
                    and the Acquiror shall be jointly entitled to the rights
                    of the Transferor Party pursuant to this Agreement (but
                    not more) and so that the Transferor Party and the
                    Acquiror shall be jointly and severally liable for all the
                    Transferor Party's obligations pursuant to this Agreement,
                    and provided that the number of shareholders that hold the
                    Transferor Party's rights and obligations pursuant to this
                    Agreement shall not exceed two.

6.       Provisions Regarding the Appointment and Replacement of Directors
         -----------------------------------------------------------------

         6.1        If a party to this Agreement requests to replace or bring
                    to an end the term of office of a director nominated to
                    the Company's board of directors by that party, the
                    parties shall act insofar as necessary to hold a General
                    Meeting of the Company and vote in favor of a proposal to
                    remove such a director from office and appoint another
                    director in his place in accordance with the nomination of
                    the party seeking to remove such director from office as
                    aforesaid.

         6.2        The parties shall vote against a proposal to remove a
                    member of the Company's board of directors from office, if
                    his nomination for the office was proposed by Koor or
                    Elbit, unless the party to this Agreement that nominated
                    said director's appointment directs otherwise in advance
                    and in writing.

         6.3        If the position of a member of the board of directors who
                    was elected in accordance with the nomination of Koor or
                    Elbit is vacated for any reason, the parties shall act
                    insofar as necessary to hold a General


<PAGE>


                    Meeting of the Company and vote in favor of removing from
                    office a director who has been appointed by the Company's
                    board of directors in place of the board member whose
                    position has been vacated, if so appointed, and in favor
                    of appointing the candidate nominated by Koor or Elbit, as
                    the case may be, for the position of board member instead
                    of the board member whose position has been vacated,
                    provided that such nominee meets the Qualification
                    Conditions.

         6.4        Before any General Meeting of the Company on the agenda of
                    which is the appointment of directors in the Company, and
                    in accordance with the provisions of the Company's
                    articles of association and applicable law, each party
                    shall give written notice to the Company, with a copy to
                    the other, of the candidates nominated by it for the
                    position of director in the Company.

7.       The Term of the Agreement
         -------------------------

         7.1        This Agreement shall enter into effect on the First
                    Closing Date and remain in force so long as the parties
                    hereto together hold Shares of the Company entitling them
                    to at least 15% of the voting rights in the Company,
                    provided that each party hereto holds Shares of the
                    Company.

         7.2        Should the holdings of a party or the parties to this
                    Agreement, as the case may be, fall below the percentages
                    set out in Clause 7.1 above, this Agreement shall
                    automatically expire and not vest any rights in either of
                    the parties hereto or impose any obligations on either of
                    them. The provisions of the Agreement shall not be renewed
                    or again become effective, even if the holdings of a party
                    or parties to this Agreement increase after it has expired
                    as provided in this Clause.

8.       Confidentiality and Notices
         ---------------------------

         8.1        Subject to applicable law and the provisions of Clause 8.2
                    below, the parties shall not publish or provide
                    information to any third party in connection with this
                    Agreement without the other party's prior written consent
                    to the publication and its contents.

         8.2        The parties shall provide all the reports required by
                    applicable law concerning entering into and performing
                    this Agreement as required by applicable law, by prior
                    coordination, if and insofar as legally possible, with the
                    other party hereto.

         8.3        The parties shall use Confidential Information that comes
                    into their possession in connection with this Agreement or
                    the Company solely for the performance of their
                    obligations pursuant to this Agreement,


<PAGE>


                    and they shall not in any manner provide Confidential
                    Information to any third party.

         8.4        For the purpose of this Clause 8.3, "Confidential
                    Information" - means any information relating to the
                    parties hereto and/or the Company, other than (a)
                    information that was in the public domain or came into the
                    public domain otherwise than due to a breach of this
                    Agreement by a party hereto; and (b) information the
                    disclosure of which is required by law.

         8.5        The obligations pursuant to Clauses 8.1 to 8.4 of this
                    Agreement are not limited in time.

9.       Miscellaneous
         -------------

         9.1        Any modification, amendment and/or addendum, waiver,
                    extension, concession or failure to exercise a right
                    pursuant to this Agreement shall only be effective if done
                    in an express document signed by all the parties hereto
                    and shall only apply to the case specified in such
                    document as aforesaid and shall not derogate from other
                    rights of a party pursuant to this Agreement.

         9.2        The parties hereto may extend or reduce any time specified
                    in this Agreement and waive the performance of any of this
                    Agreement's provisions, either once or several times, by
                    written notice signed by two officers of Koor and of
                    Elbit, without any further authority being necessary.

         9.3        No conduct by either of the parties shall be construed as
                    a waiver of any of its rights pursuant to this Agreement
                    and/or by law or as its waiver of or acquiescence in any
                    breach or non-performance of the terms of the Agreement by
                    the other party or as granting a postponement or extension
                    or as a modification, cancellation or addition of any
                    condition, unless done expressly and in writing.

         9.4        This Agreement fully contains, embodies, merges, expresses
                    and exhausts all the understandings of the parties hereto
                    solely in respect of the matters mentioned herein. Any
                    promises, guarantees, undertakings or representations with
                    regard to the subject matter of this Agreement that were
                    given or made by the parties prior to entering into this
                    Agreement, in writing or orally, that are not specifically
                    expressed herein, shall not augment, modify or derogate
                    from the rights and obligations prescribed herein, and the
                    parties shall not be bound by them, insofar as they were
                    bound, as from the date of this Agreement. Without
                    derogating from the generality of the foregoing, the
                    documents exchanged between the parties before the


<PAGE>


                    signature hereof, including the drafts exchanged between
                    them, shall have no significance in the interpretation of
                    this Agreement. For the avoidance of doubt, the terms of
                    the shareholders agreement made between Koor, Federmann
                    Enterprises Ltd. and HERIS AKTIENGESELLSCHAFT,
                    contemporaneously with the signature of this Agreement
                    shall not be applied in the interpretation of this
                    Agreement.

         9.5        Unless otherwise expressly provided in this Agreement, the
                    parties hereto may not assign or transfer their rights or
                    obligations under this Agreement to any third party or
                    perform this Agreement through any third party, unless the
                    other party's prior written consent has been obtained, and
                    nothing in this Agreement shall be deemed to vest any
                    right in anyone who is not a party hereto.

         9.6        Should either of the parties not enforce or delay in
                    enforcing any of the rights vested in it pursuant to this
                    Agreement and/or by law, in a particular case or series of
                    cases, such shall not be construed as a waiver of said
                    right or of any other rights.

         9.7        This Agreement shall be governed by the laws of the State
                    of Israel. Sole and exclusive jurisdiction in all matters
                    relating to this Agreement is vested only in the courts of
                    the District Court in the City of Tel Aviv - Jaffa and in
                    them alone, and no other court shall have jurisdiction.

         9.8        Notices under this Agreement shall be given in writing to
                    the parties' addresses as set out in the preamble hereto
                    and/or to such other addresses of which the parties give
                    notice in accordance with the provisions of this Clause.
                    Any notice sent by one party to the other by registered
                    mail shall be deemed to have reached the addressee
                    following the passage of three days from the date of being
                    posted and notice that is delivered in person by 17:00
                    hours on any Business Day shall be treated as received on
                    delivery, or if delivered after 17:00 hours on any
                    Business Day, then on the first Business Day after its
                    delivery.

         9.9        The provisions of the Amendment shall become effective
                    immediately after obtaining (1) due approval of the
                    General Meeting of Elbit for Elbit to enter into the
                    Amendment and also (2) due approval of the General Meeting
                    of Elbit for Elbit to enter into the Elisra Transaction,
                    as defined in the Share Transfer Deed. If the approvals of
                    the General Meeting of Elbit as mentioned in (1) and (2)
                    above are not obtained by 6th September 2005 or if it is
                    not possible to complete Stage `B' of the Transaction on
                    the Second Closing Date (as those terms are defined in the
                    Share Transfer Deed after the Amendment) for any reason
                    save for


<PAGE>


                    an impediment due to a breach of the Share Transfer Deed,
                    the provisions of the Amendment shall be ineffective and
                    neither of the parties shall have any claim or suit
                    against the other, without the same derogating from the
                    validity of the provisions of the Share Transfer Deed and
                    the provisions of this Agreement, as existing prior to
                    making the Amendment, and the original provisions of the
                    Share Transfer Deed and this Agreement, prior to the
                    Amendment, shall remain in force.


IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:

/s/ Jonathan Kolber  /s/ Danny Biran      /s/ Joseph Ackerman  /s/ Joseph Gaspar
-------------------  ---------------      -------------------  -----------------
KOOR INDUSTRIES LTD.                      ELBIT SYSTEMS LTD.