Exhibit 4.10

                     [TRANSLATED FROM THE HEBREW ORIGINAL]

                                 Appendix 10.7


                            SHAREHOLDERS AGREEMENT

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


                                    BETWEEN

                             Koor Industries Ltd.
              whose address for the purpose of this Agreement is
         14 Hamalacha Street, Afek Industrial Park, Rosh Ha'ayin 48091
                                   ("Koor")

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

                         1. Federmann Enterprises Ltd.
                           ("Federmann Enterprises")

                          2. Heris Aktiengesellschaft
                                   ("Heris")
           whose address solely for the purpose of this Agreement is
                         99 Hayarkon Street, Tel Aviv
               (Federmann Enterprises and Heris are hereinafter
               jointly and severally referred to as "Federmann")

                                                             of the other part
                                                             -----------------
                          (hereinafter the "Parties")

WHEREAS           on the date of signing this Agreement Federmann is the
                  holder of 19,915,448 Ordinary Shares of 1 NIS par value each
                  of Elbit Systems Ltd, a public company whose Shares are
                  traded on the Tel Aviv Stock Exchange and on Nasdaq in the
                  United States (hereinafter the "Company"), of which
                  Federmann Enterprises is owner of 16,078,990 Ordinary Shares
                  of 1 NIS par value each of the Company and Heris is the
                  owner of 3,836,458 Ordinary Shares of 1 NIS par value each
                  of the Company (those specific Shares and bonus Shares that
                  are in future issued in respect of them, if at all,
                  excluding the Koor Shares, as defined below, are hereinafter
                  the "Federmann Shares");

AND WHEREAS       in accordance with a Share Transfer Deed between Federmann
                  Enterprises and Koor, together with the appendices thereto,
                  including its amendments, of which this Agreement
                  constitutes Appendix 10.7 (herein the "Deed of Sale"),
                  Federmann Enterprises and Koor have agreed upon the sale of
                  3,160,000 (three million one hundred and sixty thousand)
                  Ordinary Shares of 1 NIS par value each of the Company from
                  Federmann Enterprises to Koor, subject to various conditions
                  precedent and in two stages, in the first stage 2,160,000
                  (two million one hundred and sixty thousand) Ordinary Shares
                  of 1 NIS par value each of the Company being sold to Koor,
                  and in the second stage an additional 1,000,000 (one
                  million) Ordinary Shares of the Company being sold to Koor,
                  all subject to and in accordance with the provisions of the
                  Deed of Sale (the specific Shares that are to be transferred
                  to Koor from Federmann Enterprises pursuant to the Deed of
                  Sale and bonus Shares issued in respect of them, if at all,
                  are herein referred to as the "Koor Shares");

AND WHEREAS       the Parties wish to set forth their relationship with
                  respect to their holdings of the Company's Shares.


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

1.       Preamble and Interpretation
         ---------------------------

         1.1        The preamble and appendices hereto constitute an integral
                    part hereof and are as binding as the other terms hereof.

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

2.       Definitions
         -----------

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

         2.1        "Heris" means Heris Aktiengesellschaft (Company No.
                    56-002196-6);

         2.2        "Independent Director" means a director who meets all the
                    independence criteria in accordance with the Foreign Law;


<PAGE>


         2.3        "Stock Exchange" means the Tel Aviv Stock Exchange Ltd. or
                    the Nasdaq National Market or any other stock exchange on
                    which the Company's Shares are listed for trade;

         2.4        "External Director" means as defined in the Companies Law;

         2.5        "Foreign Law" means the law applicable in the United
                    States regarding securities, including the provisions of
                    the Sarbanes Oxley Act and the rules and regulations that
                    have been and are in future issued by virtue thereof, and
                    including the rules of the Nasdaq National Market;

         2.6        "Agreement" means this Agreement together with the
                    appendices hereto, including its amendments;

         2.7        "Company" means Elbit Systems Ltd. (Public Company No.
                    520043027);

         2.8        "First Minimum Quantity" means 3,050,000 (three million
                    fifty thousand) Ordinary Shares, together with all bonus
                    Shares that are issued in respect of them, if any, and
                    together with all the Shares that are issued to Koor by
                    virtue of rights that are vested in Koor solely in respect
                    of the Koor Shares in the context of a rights offering of
                    the Company to its shareholders, if any, all from the time
                    of signing this Agreement;

         2.9        "Second Minimum Quantity" means 2,050,000 (two million
                    fifty thousand) Ordinary Shares, together with all bonus
                    Shares that are issued in respect of them, if any, and
                    together with all the Shares that are issued to Koor by
                    virtue of rights that are vested in Koor solely in respect
                    of the Koor Shares in the context of a rights offering of
                    the Company to its shareholders, if any, all from the time
                    of signing this Agreement;

         2.10       "Transfer" means a sale, gift, realization of a lien (but
                    not the creation of a lien), loan and any other transfer
                    whatsoever 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;

         2.11       "Companies Law" means the [Israeli] Companies Law,
                    5759-1999;

         2.12       "First Minimum Percentage" means 6.45% of the Company's
                    issued share capital at the time of computation;


<PAGE>


         2.13       "Second Minimum Percentage" means 4.32% of the Company's
                    issued share capital at the time of computation;

         2.14       "Business Day" means a day on which the two major banks in
                    Israel are open for business, other than Fridays and
                    holiday eves, which shall not be treated as a Business
                    Day;

         2.15       "Koor" means Koor Industries Ltd. (Public Company No.
                    520014143);

         2.16       "First Closing Date" means as defined in the Deed of Sale;

         2.17       "Second Closing Date" means as defined in the Deed of Sale;

         2.18       "Stock Exchange Sale" means a sale in the context of
                    trading on the Stock Exchange or a sale in a transaction
                    outside the Stock Exchange by means of a distributor to
                    buyers whose identity is unknown to the seller or a sale
                    to trust funds in Israel or abroad or to provident funds
                    or to provident fund management companies;

         2.19       "Koor Shares" means as stated in the preamble hereto;

         2.20       "Federmann Shares" means as stated in the preamble hereto;

         2.21       "Ordinary Shares", "Shares" or the "Company's Shares"
                    means Ordinary Shares of 1 NIS par value each in the
                    Company;

         2.22       "Federmann Enterprises" means Federmann Enterprises Ltd.
                    (Private Company No. 512278391);

         2.23       "Officer" means as defined in the Companies Law;

         2.24       "Free and Clear" means free and clear of any charge,
                    pledge, attachment, levy, debt, lien, claim, right of
                    pre-emption, right of refusal, option, lock-up arrangement
                    or any further or other third party right whatsoever,
                    other than restrictions in respect of the Transfer and/or
                    negotiability of Shares that are imposed pursuant to the
                    Foreign Law (Shares which are not registered under U.S.
                    securities laws);

         2.25       "Federmann" means as stated in the preamble hereto;

         2.26       "Acquisition" means acquisition, purchase, receipt of a
                    gift and any receipt of a Transfer, in any way whatsoever,
                    of a Share and/or right vested in the owner and/or holder
                    of the Share, whether or not for consideration;


<PAGE>


         2.27        "Deed of Sale" means as stated in the preamble  hereto;

         2.28       "Direct Control" means Control deriving from holding
                    Shares alone and not together with others;

         2.29       "Control" means as the term is defined in the [Israel]
                    Securities Law, 5728-1968;

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

3.       The Parties' Warranties
         -----------------------

         3.1        Federmann hereby warrants that Federmann Enterprises is a
                    limited company, duly registered in Israel and that Heris
                    is a foreign company, duly registered in Liechtenstein.

         3.2        Koor hereby warrants that it is a limited company, duly
                    registered in Israel.

         3.3        Each of the Parties warrants that it is empowered to enter
                    into this Agreement and perform all its obligations
                    pursuant hereto and that its signatories hereto are duly
                    empowered to obligate it.

         3.4        Each of the Parties hereto warrants and undertakes that
                    there is no legal impediment and/or no impediment pursuant
                    to its incorporation documents and/or applicable law
                    and/or any order or direction of a court and/or any
                    contract, understanding or agreement to which it is a
                    party, to its entering into this Agreement and performing
                    all its obligations pursuant hereto.

         3.5        Except as set out in this Agreement, each of the Parties
                    hereby warrants that it is in possession of all the
                    approvals and consents necessary for the purpose of
                    signing and performing this Agreement.

         3.6        Each of the Parties further warrants that it is not a
                    party to any agreement, arrangement or obligation that is
                    contrary to and/or impairs its ability to perform all its
                    obligations pursuant hereto.

4.       Voting Agreement - Board of Directors
         -------------------------------------

         4.1        From the Second Closing Date until such time as Koor's
                    holdings of the Koor Shares fall below the First Minimum
                    Percentage or until such


<PAGE>

                    time as Koor's holdings of the Koor Shares fall below the
                    First Minimum Quantity, whichever is earlier, Federmann
                    shall vote by virtue of all its holdings in the Company's
                    Shares in favor of the election to the Company's Board of
                    Directors of such number of candidates as are nominated to
                    office by Koor, which is the greater of:

                    (1)         two directors; or

                    (2)         a number of directors equal to 20% of the
                                number of the Company's directors, including
                                External Directors and including the directors
                                who are elected as aforesaid in accordance
                                with Koor's nomination, rounded up to the
                                nearest whole number.

                    It is hereby agreed that if it is required in accordance
                    with the Foreign Law that a majority of the Company's
                    directors are Independent Directors, Koor undertakes that
                    at least one half of the directors who are elected to
                    office in accordance with its nomination as aforesaid,
                    that number being rounded up to the nearest whole number,
                    will fulfil the conditions required in respect of
                    Independent Directors.

         4.2        After the Second Closing Date, from such time as Koor's
                    holdings of the Koor Shares fall below the First Minimum
                    Percentage or from such time as Koor's holdings of the
                    Koor Shares fall below the First Minimum Quantity,
                    whichever is earlier, until such time as Koor's holdings
                    of the Koor Shares fall below the Second Minimum
                    Percentage or until such time as Koor's holdings of the
                    Koor Shares fall below the Second Minimum Quantity,
                    whichever is earlier, Federmann shall vote by virtue of
                    all its holdings in the Company's Shares in favor of the
                    election of one director who has been nominated by Koor,
                    provided that the candidate fulfils all the Qualification
                    Conditions.

         4.3        From the First Closing Date until:

                    (i)         the Second Closing Date; or

                    (ii)        to the extent that the Second Closing Date
                                does not occur, until such time as Koor's
                                holdings of the Koor Shares fall below the
                                Second Minimum Percentage or until such time
                                as Koor's holdings of the Koor Shares fall
                                below the Second Minimum Quantity, whichever
                                is earlier;

                    Federmann shall vote by virtue of all its holdings in the
                    Company's Shares in favor of the election of one director
                    who has been nominated


<PAGE>


                    by Koor, provided that the candidate fulfils all the
                    Qualification Conditions.

         4.4        From the First Closing Date, so long as Federmann holds
                    20% or more of the Company's issued share capital and so
                    long as Koor holds the Company's Shares, Koor shall vote
                    by virtue of all its holdings in the Company's Shares:

                    4.4.1       In favor of the election of all the directors
                                of the Company whose candidacy for office has
                                been nominated by Federmann, except for the
                                directors for whose election Federmann has
                                undertaken to vote as provided in Clauses 4.1
                                or 4.2 or 4.3, as the case may be, except for
                                a candidate who does not fulfil the
                                Qualification Conditions.

                    4.4.2       Without derogating from the generality of
                                Clause 4.4.1 above, in favor of the
                                appointment of all the external directors
                                whose candidacy is nominated by Federmann.

                    4.4.3       In favor of the appointment of the chairperson
                                of the board of directors who has been
                                nominated for office by Federmann, provided
                                that if at the time of the General Meeting at
                                which the appointment of the chairperson of
                                the Company's board of directors is raised for
                                discussion and vote, Koor is entitled to the
                                restricted right described in Clause 6.3
                                below, then at the time of the General Meeting
                                there shall serve one of the directors who has
                                been elected to office in accordance with
                                Koor's nomination as provided in Clause 4.1
                                above, who is nominated by Koor as Vice
                                chairperson of the Company's board of
                                directors.

         4.5        In Clauses 4.6 to 4.8 below, "Proposing Party" means the
                    Party on whose nomination, as provided in Clauses 4.1 or
                    4.2 or 4.3 or 4.4 above, a particular candidate has been
                    appointed as a director of the Company.

         4.6        If a Proposing Party wishes to replace or terminate the
                    office of a director elected in accordance with its
                    nomination, the Parties shall act, to the extent
                    necessary, to hold a General Meeting of the Company and
                    vote in favor of a proposal to remove said director from
                    office and in favor of the appointment of another director
                    in his place whose candidacy is nominated by the Proposing
                    Party and who fulfils all the Qualification Conditions.

         4.7        The Parties shall vote against a proposal to remove from
                    office a director whose candidacy was nominated by Koor or
                    Federmann,


<PAGE>


                    unless the Proposing Party otherwise instructs in writing
                    and in advance.

         4.8        If the post of a director is vacated for any reason, the
                    Parties shall act, to the extent necessary, to hold a
                    General Meeting of the Company and vote for the
                    appointment as a director of such candidate as nominated
                    by the Proposing Party in place of the director whose post
                    has become vacant, provided that such candidate meets all
                    the Qualification Conditions.

         4.9        Before holding any General Meeting of the Company, on the
                    agenda of which is the appointment of directors, notice
                    shall be given by the Company or by Federmann to Koor in
                    connection with holding the General Meeting and, in
                    accordance with applicable law and the Company's
                    incorporation documents, each Party shall give the Company
                    three Business Days' prior written notice, with a copy to
                    the other, of the candidates nominated by it for the
                    office of a director in the Company, as provided in this
                    Clause 4 above.

         4.10       Should Koor's holdings of the Koor Shares fall below the
                    First Minimum Percentage or should Koor's holdings of the
                    Koor Shares fall below the First Minimum Quantity,
                    whichever is earlier, Koor shall use its best efforts,
                    subject to applicable law, in order to procure that all
                    the directors who have been appointed to office on Koor's
                    nomination as provided in Clause 4.1 above, other than one
                    director, will immediately resign from their office as
                    directors of the Company.

         4.11       Should Koor's holdings of the Koor Shares fall below the
                    Second Minimum Percentage or should Koor's holdings of the
                    Koor Shares fall below the Second Minimum Quantity,
                    whichever is earlier, Koor shall use its best efforts,
                    subject to applicable law, to procure that the director
                    appointed to office on its nomination, as provided in
                    Clauses 4.2 and/or 4.3 above, shall immediately resign
                    from his office as a director.

5.       General Voting Agreement
         ------------------------

         5.1        From the First Closing Date and subject to the provisions
                    of Clause 4 above, Koor undertakes to vote by virtue of
                    all its holdings in the Company's Shares, on every matter
                    and proposed resolution that is put to the Company's
                    General Meeting for decision and/or for a resolution of
                    the Company's shareholders in any manner whatsoever, in
                    accordance with written instructions that are given to it
                    by Federmann at least seven Business Days in advance
                    before the time of the relevant General Meeting or the
                    time of passing the relevant resolution, as the case may
                    be.

                    Solely for the purpose of this Clause 5.1, Koor shall not
                    be deemed holder of the Company's Shares that are
                    exclusively owned by related private companies that are
                    not companies under Koor's Control and by related public
                    companies of Koor. At Federmann's request and subject to
                    applicable law, Koor shall make a recommendation to those
                    companies to vote in accordance with such instructions as
                    have been given to Koor by Federmann as aforesaid.

         5.2        The provisions of Clause 5.1 above shall not apply:

                    (i)         as regards approval by the Company's General
                                Meeting of transactions that are to be
                                approved by reason of the fact that Federmann,
                                Federmann's controlling shareholders or the
                                officers of any of them have a personal
                                interest in them; and

                    (ii)        in connection with a proposal to alter the
                                Company's Articles of Association that is such
                                as to affect Koor's rights in accordance with
                                the Company's Articles of Association in a
                                manner that is prejudicial to Koor in
                                comparison with Federmann.

         5.3        For the performance of the provisions of Clauses 4 and 5
                    above, the Parties undertake to attend every General
                    Meeting of the Company and do all acts necessary, at the
                    times prescribed therefor, so that their voting in the
                    General Meeting by virtue of all their holdings in the
                    Company will be valid and effective in accordance with
                    applicable law and pursuant to the Company's incorporation
                    documents.

6.       Other Non-Transferable Rights
         -----------------------------

         6.1        Koor undertakes to give Federmann written notice
                    immediately after it learns that members of Charles
                    Bronfman's family and/or trusts for the benefit of Charles
                    Bronfman's family have ceased being Koor's controlling
                    shareholders.

                    Federmann may, in its discretion, give written notice to
                    Koor within 90 days of the date on which it receives
                    Koor's written notice as aforesaid that it has decided to
                    bring to an end the additional non-transferable rights set
                    out in Clause 6.3 below (the date on which Federmann's
                    written notice is received by Koor being referred to below
                    in this Clause as the "Termination Date").

         6.2        The provisions of Clauses 6.3 to 6.8 below shall only
                    apply in the period between the Second Closing Date and
                    the earlier of the following two dates:


<PAGE>


                    6.2.1       such time as the number of the Koor Shares
                                that are exclusively owned by Koor falls below
                                the First Minimum Percentage or such time as
                                the number of the Koor Shares that are
                                exclusively owned by Koor falls below the
                                First Minimum Quantity, whichever is earlier.
                                For the avoidance of doubt, Shares owned by a
                                person or entity that is not Koor shall not be
                                deemed as Shares that are exclusively owned by
                                Koor, even if Koor is deemed to hold them by
                                virtue of Clause 17.6 below; or

                    6.2.2       the Termination Date, as defined in Clause 6.1
                                above.

         6.3        The Parties shall act, subject to applicable law, for the
                    appointment of one of the directors who have been elected
                    to office on the nomination of Koor as provided in Clause
                    4.1 above, who shall be nominated by Koor, as Vice
                    Chairperson of the Company's Board of Directors.

         6.4        The Parties shall act, subject to applicable law, so that
                    on every one of the Company's Board of Directors'
                    committees there shall be a member one of the directors
                    elected for office on Koor's nomination as provided in
                    Clause 4.1 above, who shall be nominated by Koor.

         6.5        The Parties shall act, subject to applicable law, so that
                    there shall be established in the Company a board of
                    directors' committee for strategic planning, its members
                    being: one of the directors elected for office on Koor's
                    nomination as provided in Clause 4.1 above, who shall be
                    nominated by Koor, at least one of the external directors
                    and such other directors as determined by the Company's
                    board of directors (hereinafter the "Strategic Planning
                    Committee"). The function of the Strategic Planning
                    Committee shall be to assist and make recommendations to
                    the Company's board of directors on the strategic planning
                    of the Company's business activity.

         6.6        When the tenure of Mr Joseph Ackerman (hereinafter "Mr.
                    Ackerman") as President and CEO of the Company comes to an
                    end, the Parties shall act, subject to the provisions of
                    applicable law, so that the Company's board of directors
                    establishes a special search committee, the composition of
                    which shall include the Chairperson of the board of
                    directors, the Vice Chairperson of the board of directors,
                    a director elected to office on the nomination of
                    Federmann as provided in Clause 4.4.1 above and a director
                    elected to office on the nomination of Koor, as provided
                    in Clause 4.1 above (hereinafter the "Search Committee").
                    The Search Committee shall act for 30 days in an attempt
                    to identify a candidate for the post of the Company's CEO,
                    who is agreed by all the members of the Committee and it
                    shall make


<PAGE>

                    a recommendation to the Company's board of directors to
                    elect that candidate to the post of the Company's CEO. In
                    any event, even if the Search Committee has been unable to
                    locate a candidate agreed by all the members of the Search
                    Committee within 30 days as aforesaid, the Company's CEO
                    shall be elected by the Company's board of directors.

                    For the avoidance of doubt, it is clarified that the
                    Company's President and CEO is currently Mr Ackerman, and
                    that the Company's board of directors may extend Mr
                    Ackerman's tenure as it deems fit, and that the Search
                    Committee mentioned above shall not be established for
                    that purpose.

         6.7        To the extent requested to do so by Koor, Federmann shall
                    vote in the Company's General Meeting by virtue of all its
                    holdings in the Company in order to pass a resolution of
                    the Company approving the Company's entering into a
                    Registration Rights Agreement with Koor, which will vest
                    Koor, so long as it holds 5% or more of the Company's
                    issued share capital, with one demand right on the same
                    conditions, mutatis mutandis, ("Registration Right") as
                    those detailed in the Registration Rights Agreement dated
                    5 July 2000 among the Company, Elron Electronic Industries
                    Ltd. and Federmann (the "Registration Rights Agreement").
                    Federmann hereby undertakes that to the extent that
                    pursuant to the Registration Rights Agreement it is vested
                    with more than one demand right and to the extent that the
                    Company so requires for the purpose of granting the
                    Registration Right to Koor, Federmann shall, without any
                    consideration or compensation, relinquish one demand right
                    that is vested in it pursuant to the Registration Rights
                    Agreement.

         6.8        Should officers or controlling shareholders of Federmann
                    serve as directors of any subsidiary of the Company, the
                    Parties shall act, subject to applicable law, so that the
                    Company also appoints as a director of that subsidiary one
                    of the directors of the Company who has been appointed to
                    office on Koor's nomination as provided in Clause 4 above.
                    The foregoing shall not apply if there is any legal
                    restriction to the appointment of more than one director,
                    who is a director of the Company, to the subsidiary's
                    board of directors as aforesaid.

7.       For the avoidance of doubt, it is clarified that the rights granted
         to Koor pursuant to Clause 6 above, in all its sub-clauses, are
         personal (non-transferable) rights that are not attached to the Koor
         Shares that are held by Koor. Said rights are not assignable and/or
         transferable to any third party, either together with a Transfer of
         all or any of the Koor Shares in the Company or otherwise.


<PAGE>


8.       Restrictions on Transfer of Shares
         ----------------------------------

         8.1        From the First Closing Date, Koor shall not Transfer all
                    or any of the Koor Shares, including in the event of a
                    forced sale due to receivership, execution proceedings or
                    winding-up proceedings, except subject to and in
                    accordance with the provisions of Clauses 10, 11 and 12
                    below.

         8.2        From the First Closing Date, Federmann shall not Transfer
                    all or any of the Federmann Shares, including in the event
                    of a forced sale due to receivership, execution
                    proceedings or winding-up proceedings, except subject to
                    and in accordance with the provisions of Clauses 9 and 12
                    below.

9.       Koor's Tag-Along Right on a Sale of the Federmann Shares
         --------------------------------------------------------

         9.1        Should Federmann wish to Transfer any of the Federmann
                    Shares that constitute more than half the Federmann Shares
                    that are held by Federmann for the time being to a third
                    party (in this Clause 9 the "Third Party"), Federmann
                    shall provide Koor written notice detailing the number of
                    Shares that it intends to Transfer to the Third Party (in
                    this Clause "the Offered Shares"), the identity of the
                    Third Party, the identity of all the Third Party's
                    ultimate interested parties or, to the extent that the
                    Third Party wishes to receive a Transfer of the Offered
                    Shares indirectly through a trustee and/or another person
                    and/or another entity in any manner whatsoever, the
                    identity of every such trustee and other person and entity
                    as aforesaid and the identity of the third party
                    beneficiary and all its ultimate interested parties, the
                    number of Shares that are held by Federmann at the time of
                    giving the notice, all to the level of detail for which
                    the Company and/or the Third Party would be obligated, in
                    accordance with Israeli securities laws, for reporting the
                    identity of the said entities and persons, were the Third
                    Party an interested party in the Company, and the
                    consideration that the Third Party has undertaken to pay
                    Federmann for the Offered Shares, the payment terms and
                    all the other material conditions of the transaction,
                    including the transaction's conditions precedent
                    (hereinafter in this Clause the "Sale Notice").

         9.2        By the end of a period of 7 Business Days starting on the
                    date of Koor's receipt of the Sale Notice (hereinafter the
                    "Tag-Along Notice Period"), Koor may provide Federmann
                    written notice that it wishes to sell to the Third Party
                    the Koor Shares that it holds at that time or a portion
                    thereof together with the Offered Shares and at the price
                    and on the payment terms and other conditions specified in
                    the Sale Notice (in this Clause 9 the "Tag-Along Notice").
                    In the Tag-Along Notice,


<PAGE>


                    which will be provided during the Tag-Along Notice Period,
                    Koor shall specify the quantity of Shares, solely out of
                    the Koor Shares, that Koor wishes to sell the Third Party
                    as aforesaid.

         9.3        Should Koor provide a Tag-Along Notice during the
                    Tag-Along Notice Period, Federmann shall be entitled to
                    Transfer its Shares to the Third Party, provided that the
                    Third Party also purchases from Koor, at the price and on
                    the payment terms and other conditions specified in the
                    Sale Notice, and at the same time, the Koor Shares
                    specified by Koor in the Tag-Along Notice. If the number
                    of Offered Shares, together with the number of the Koor
                    Shares specified in the Tag-Along Notice, exceeds the
                    quantity of Shares that the Third Party is willing to
                    purchase, the quantity of Shares that is purchased by the
                    Third Party shall be apportioned pro rata between
                    Federmann and Koor in the ratio between the number of the
                    Federmann Shares that are held by Federmann prior to
                    completing the Share Transfer to the Third Party and the
                    number of the Koor Shares that are held by Koor prior to
                    completing the Share Transfer to the Third Party.

         9.4        Should Koor not provide a Tag-Along Notice during the
                    Tag-Along Notice Period, Federmann may Transfer the
                    Offered Shares to the Third Party for consideration and on
                    payment terms and other conditions no better to Federmann
                    than those detailed in the Sale Notice, provided that an
                    Agreement for the Transfer of the Offered Shares is signed
                    by Federmann and the Third Party within 30 Business Days
                    of the end of the Tag-Along Notice Period and the Transfer
                    of the Offered Shares pursuant thereto is completed within
                    180 days of the end of the Tag-Along Notice Period, all
                    subject to the provisions of Clauses 12.1 to 12.3 below.

         9.5        For the avoidance of doubt, to the extent that a
                    transaction for the Transfer to the Third Party of the
                    Offered Shares is not signed by the expiration of 30
                    Business Days from the end of the Tag-Along Notice Period
                    or the transaction for the Transfer of the Offered Shares
                    is not completed within 180 days of the end of the
                    Tag-Along Notice Period, Federmann may only Transfer the
                    Offered Shares after again providing a Tag-Along Notice to
                    Koor as provided above in this Clause 9.

         9.6        For the purpose of the foregoing provisions of Clause 9,
                    there shall be deemed as a single Transfer (1) a number of
                    transactions for the Transfer of Shares that are effected
                    with a single Third Party during a six-month period and
                    for such purpose a "Transaction for the Transfer of
                    Shares" includes the grant, Transfer or sale of any option
                    or right to acquire or receive Shares; and the "Single
                    Third Party" includes any related company (as defined in
                    the Securities Law, 5728-1968) of the


<PAGE>


                    Third Party and any interested party (as defined in the
                    Securities Law, 5728-1968) in any of them and includes
                    anyone acting with the Third Party, in cooperation under
                    an agreement, whether written or oral, and also (2) a
                    transaction for the Transfer of Shares (as defined above)
                    in the scope of which there are Transferred in any manner
                    whatsoever - including as a result of a Transfer of
                    Control in Heris from Federmann Enterprises to a Third
                    Party or Third Parties and/or in other subsidiaries of
                    Federmann from Federmann to any Third Party or Third
                    Parties and/or a Transfer of actual economic control of
                    the Federmann Shares that are owned by Heris and/or other
                    subsidiaries of Federmann from Federmann to any Third
                    Party or Third Parties - Shares of Federmann, from
                    Federmann to any Third Party or Third Parties, in a
                    percentage of more than 50% of the Federmann Shares that
                    are then held by Federmann.

         9.7        For the avoidance of doubt, the foregoing shall not
                    preclude Federmann from entering into an agreement to
                    Transfer the Offered Shares to the Third Party before
                    giving the Sale Notice, provided that such does not
                    preclude Koor from tagging along in the sale of the
                    Offered Shares to the Third Party in accordance with the
                    provisions of this Clause 9.

         9.8        Without derogating from and in addition to the provisions
                    of Clause 9.6, the provisions of Clauses 9.1 to 9.7 above
                    shall not apply, and Koor shall not have a Tag-Along
                    Right, in respect of a Transfer of any of the Federmann
                    Shares from Federmann Enterprises to Heris and vice versa.
                    Nevertheless, if Federmann Enterprises sells Control of
                    Heris and at the time of the sale Heris holds more than
                    50% of the Federmann Shares, Federmann shall grant Koor
                    the Tag-Along Right as provided in Clauses 9.1 to 9.7
                    above, mutatis mutandis. To the extent that at the time of
                    the Transfer of Control of Heris, Heris holds other
                    assets, in addition to the Federmann Shares, the value of
                    the Federmann Shares that are held by Heris at that time
                    shall be determined by an appraiser agreed between the
                    Parties, and in the absence of such agreement, then by the
                    chairperson of the accounting firm of Somekh Chaikin
                    (KPMG), who may also appoint himself.

         9.9        It is agreed that the foregoing provisions of Clauses 9.1
                    to 9.8 shall not apply and Koor's Tag-Along Right shall
                    expire from such time as Koor's holdings of the Koor
                    Shares fall below the Second Minimum Percentage or from
                    such time as Koor's holdings fall below the Second Minimum
                    Quantity, whichever is earlier.

10.      Non-Transfer of Shares by Koor
         ------------------------------


<PAGE>


         Koor shall not Transfer the Koor Shares or any of them during the
         period commencing on the date of signing this Agreement and ending at
         the later of the following two dates:

         10.1       on the expiration of 12 months after the First Closing
                    Date; or

         10.2       if the performance of Stage `B' of the Transaction
                    pursuant to the Deed of Sale is completed - the expiration
                    of nine months after the Second Closing Date;

         (hereinafter the "Prohibited Sales Period").

11.      Federmann's Right of First Refusal
         ----------------------------------

         11.1       Subject to the provisions of Clause 10 above and Clause 12
                    below, if Koor wishes to Transfer any of the Koor Shares
                    to a Third Party, it may only do so if it first enters
                    into an agreement with a specific Third Party for the
                    Transfer of those Shares, the agreement being subject to
                    the Right of First Refusal vested in Federmann pursuant to
                    this Agreement, and subject to the following provisions.

                    Koor shall provide Federmann written notice within 2
                    Business Days of entering the agreement with the Third
                    Party, in which it shall notify Federmann that it has
                    entered into a binding agreement for the Transfer of
                    Shares from the Koor Shares to a Third Party (in this
                    Clause 11 the "Third Party"), subject to the Right of
                    First Refusal vested in Federmann pursuant to this Clause
                    11, and in the notice it shall detail the number of Shares
                    that it has undertaken to Transfer to the Third Party (in
                    this Clause the "Offered Shares"), the identify of the
                    Third Party and the identity of all the Third Party's
                    ultimate interested parties or to the extent that the
                    Third Party wishes to receive a Transfer of the Offered
                    Shares indirectly through a trustee and/or other person
                    and/or entity in any manner, then the identity of every
                    such trustee and other person and entity as aforesaid, the
                    identity of the Third Party beneficiary and of all its
                    ultimate interested parties, the number of the Shares held
                    by the Third Party on the date of providing the notice,
                    all to the same level of detail for which the Company
                    and/or the Third Party would be obligated, in accordance
                    with Israeli securities laws, for reporting the identity
                    of the said entities and persons, were the Third Party an
                    interested party in the Company, and the consideration
                    that the Third Party has undertaken to pay to Koor for the
                    Offered Shares (which shall only be cash consideration),
                    the payment terms and all the other material conditions of
                    the transaction, including all the conditions precedent of
                    the transaction (hereinafter in this Clause the "Sales
                    Notice").


<PAGE>


         11.2       Until the end of a period of 21 Business Days commencing
                    on the date of Federmann's receipt of the Sales Notice
                    (hereinafter in this Clause 11 the "Acceptance Notice
                    Period"), Federmann may give Koor written notice that it
                    has decided to purchase the Offered Shares for the
                    consideration and on the payment terms and other
                    conditions detailed in the Sales Notice (hereinafter the
                    "Acceptance Notice").

         11.3       In the event of Acceptance Notice being provided, Koor
                    shall Transfer to Federmann and Federmann shall take a
                    Transfer from Koor of all the Offered Shares, Free and
                    Clear, for the consideration and on the terms and
                    conditions detailed in the Sale Notice, within 7 Business
                    Days of the date on which all the approvals and permits
                    necessary for such transaction as aforesaid in accordance
                    with applicable law are obtained and in any event not
                    later than the expiration of 60 days from the date the
                    Acceptance Notice is provided (hereinafter the "Completion
                    Period"). The Parties shall cooperate in order to obtain
                    all the approvals and permits necessary for the
                    transaction as aforesaid as soon as possible.

         11.4       Should Federmann not provide Koor an Acceptance Notice in
                    writing by the end of the Acceptance Notice Period or
                    should Federmann provide an Acceptance Notice but the
                    transaction mentioned in Clause 11.3 above not be
                    completed by the end of the Completion Period other than
                    due to a breach of this Agreement by Koor, Koor may
                    Transfer the Offered Shares to the Third Party for the
                    consideration and on the payment terms and other
                    conditions detailed in the Sales Notice, provided that the
                    transaction for the sale to the Third Party of the Offered
                    Shares is completed by the expiration of 120 days from the
                    end of the Acceptance Notice Period or from the end of the
                    Completion Period, as the case may be (hereinafter the
                    "Maximum Sales Period"), all subject to the provisions of
                    Clauses 12.1 to 12.3 below.

         11.5       For the avoidance of doubt, should the transaction for the
                    sale of the Offered Shares to the Third Party not be
                    completed by the end of the Maximum Sales Period, Koor may
                    only Transfer the Offered Shares after again providing a
                    Right of First Refusal to Federmann as provided above in
                    this Clause 11.

         11.6       From the end of the Prohibited Sales Period, the
                    provisions of Clauses 11.1 to 11.5 above shall not apply
                    with respect to a Stock Exchange sale of the Koor Shares
                    by Koor in aggregate quantities not exceeding in any
                    12-month period 2% of the Company's issued share capital.


<PAGE>


         11.7       Notwithstanding the provision of Clause 11.6 above, Koor
                    may not Transfer, pursuant to Clause 11.6 above, in the
                    aggregate, more than 300,000 of the Koor Shares that are
                    held by it:

                    11.7.1      unless Federmann Transfers more than 650,000
                                of the Federmann Shares, except on a Transfer
                                subject to Koor's Tag-Along Right pursuant to
                                Clause 9 above, and except for a Transfer to a
                                person or entity, the Shares held by which are
                                deemed as held by Federmann in accordance with
                                the provisions of Clause 17.6 below; or

                    11.7.2      unless the quantity of the Federmann Shares
                                together with the Koor Shares falls below 45%
                                of the Company's issued share capital, other
                                than as a result of a breach of this Agreement
                                by Koor.

12.      Transfer of Shares and Obligations Pursuant to the Agreement
         ------------------------------------------------------------

         Without derogating from the other provisions of this Agreement,
         including Clause 7 above, it is agreed that on any Transfer of the
         Federmann Shares by Federmann that is subject to Koor's Tag-Along
         Right under Clause 9 above, and on any Transfer of the Koor Shares by
         Koor that is subject to Federmann's Right of First Refusal under
         Clause 11 above (hereinafter in this Clause 12 the "Shares Being
         Transferred", and Koor and Federmann being respectively the
         "Transferor Party"), the following provisions shall apply:

         12.1       If the Transferor Party wishes to Transfer all the
                    Federmann Shares or all the Koor Shares, as the case may
                    be, the Transferor Party may not do so and such a Transfer
                    shall be ineffective unless the Transferor Party Transfers
                    and assigns to the transferee the Shares Being Transferred
                    (in this Clause 12 the "Purchaser"), together with the
                    Transfer of the Shares Being Transferred, all the rights
                    and obligations of the Transferor Party pursuant to this
                    Agreement, and the Purchaser and the Transferor Party so
                    confirm in writing to the other Party as provided in
                    Clause 12.3 below. On completion of the assignment and
                    Transfer of all the Transferor Party's rights and
                    obligations as aforesaid, the Transferor Party shall cease
                    being a Party to this Agreement and shall be succeeded by
                    the Purchaser.

         12.2       If the Transferor Party wishes to Transfer only a portion
                    of the Federmann Shares or only a portion of the Koor
                    Shares, as the case may be, then the Transferor Party may
                    not do so and such a Transfer shall be ineffective,
                    unless, together with the Transfer of the Shares being
                    Transferred, the Purchaser assumes all the obligations of
                    the Transferor Party jointly and severally with the
                    Transferor Party and confirms said obligation in writing
                    to the other Party as provided


<PAGE>


                    in Clause 12.3 below. For the avoidance of doubt, it is
                    clarified that the Transferor shall continue to be
                    entitled as against the other Party to all the rights
                    vested in the Federmann Shares or the Koor Shares, as the
                    case may be, that are held by it.

         12.3       In the event that Koor is the Transferor Party, Koor shall
                    provide Federmann, together with the Sales Notice as
                    mentioned in Clause 11.1 above, the written confirmation
                    of Koor and the Purchaser as provided in Clause 12.1 above
                    or the written confirmation of the Purchaser as provided
                    in Clause 12.2 above, as the case may be, duly signed by
                    the Purchaser and/or Koor, as the case may be.

                    In the event that Federmann is the Transferor Party,
                    Federmann shall provide Koor, within 2 Business Days of
                    signing an agreement with the Purchaser for the Transfer
                    of the Offered Shares, as provided in Clause 9.4 or Clause
                    9.7 above, the written confirmation of the Purchaser, as
                    provided in Clause 12.1 above or the written confirmation
                    of Federmann and the Purchaser, as provided in Clause 12.2
                    above, as the case may be, duly signed by the Purchaser
                    and/or Federmann, as the case may be.

         12.4       In addition to the foregoing, even in a case or cases in
                    which Federmann Transfers any of the Federmann Shares that
                    are held by it, the Transfer of which is not subject to
                    Koor's Tag-Along Right pursuant to Clause 9 above,
                    Federmann may, if it so desires, assign and Transfer its
                    obligations pursuant to this Agreement or any of them so
                    that the transferee of the Shares and Federmann shall be
                    jointly and severally liable to Koor for all the
                    obligations pursuant to this Agreement or a portion of
                    them, in such proportion as determined between Federmann
                    and the transferee of the Shares. For the avoidance of
                    doubt, Federmann may exercise its right to assign and
                    Transfer all or any of its obligations as provided in this
                    Clause 12.4 together with a Transfer of any of the
                    Federmann Shares, once or several times, in its
                    discretion.

13.      Limitation on Restrictions and Rights
         -------------------------------------

         The limitations imposed with respect to a Share Transfer and the
         rights vested in the Parties in connection with a Share Transfer
         pursuant to Clauses 9 to 12 above only apply to the Federmann Shares
         and the Koor Shares, and those limitations and rights shall not apply
         with respect to other Shares in the Company that may be held by
         Federmann or Koor, as the case may be.

14.      Tag-Along Right to Purchase
         ---------------------------


<PAGE>


         Should a Party to this Agreement (in this Clause 14 the "Purchasing
         Party") directly or indirectly, including through subsidiaries and/or
         any trustee, acquire Shares of the Company for total consideration in
         excess of US$ 25 million (in this Clause 14 the "Purchased Shares")
         from a Single Third Party, as defined in Clause 9.6 above (in this
         Clause 14 the "Seller"), whether or not on the Stock Exchange (in
         this Clause 14 the "Purchase Transaction"), the other Party to the
         Agreement (in this Clause 14 the "Other Party") shall have a right to
         tag along on such Acquisition as aforesaid, on the terms of the
         Purchase Transaction, and to acquire a portion of the securities that
         are being purchased (in this Clause 14 the "Purchase Tag-Along
         Right") in accordance with the provisions set out below:

         14.1       The Purchasing Party shall provide the other Party written
                    notice within 3 Business Days of the completion of the
                    Purchase Transaction, detailing the terms of the Purchase
                    Transaction that it has made, including the quantity of
                    additional Shares, the price (which shall only be cash
                    consideration), the payment terms, the Seller's identity
                    and every other material condition (in this Clause 14 the
                    "Seller's Notice").

         14.2       Within 14 Business Days of receiving the Purchaser's
                    notice, the Other Party shall give the Purchasing Party
                    written notice if it is tagging along in the Purchase
                    Transaction and of the quantity of Shares, out of the
                    additional Shares, that it wishes to purchase, not
                    exceeding such quantity the ratio between which it and the
                    rest of the additional Shares is equal to the ratio:

                    (i)         if Koor is the Other Party - between the Koor
                                Shares that are held by Koor on the date the
                                Purchaser's notice is given and the Federmann
                                Shares that are held by Federmann on the date
                                the Purchaser's notice is given;

                    (ii)        if Federmann is the Other Party - between the
                                Federmann Shares that are held by Federmann on
                                the date the Purchaser's notice is given and
                                the Koor Shares that are held by Koor on the
                                date the Purchaser's notice is given.

         14.3       Should the Other Party give the Purchasing Party Tag-Along
                    notice at such time as mentioned in Clause 14.2 above, the
                    Purchasing Party shall Transfer to the Other Party Shares
                    of the Company in the quantity specified in the Tag-Along
                    notice, Free and Clear, for the consideration and on the
                    terms detailed in the Purchaser's notice, all within 7
                    Business Days of the date of giving the Tag-Along notice.

15.      Term of the Agreement and Effect of the Agreement


<PAGE>


         15.1       This Agreement shall take effect on the First Closing
                    Date. Should Stage `A' of the Transaction (as the term is
                    defined in the Deed of Sale) not be performed and
                    completed by the end of 3 Business Days after the Stage
                    `A' Completion Deadline (as defined in the Deed of Sale),
                    then this Agreement shall be null and void and
                    ineffective, without either of the Parties having any
                    claim, complaint or demand against the other.

         15.2       This Agreement shall be in effect until the end of a
                    period of 15 years from the date on which it enters into
                    effect as provided in Clause 15.1 above or until such time
                    as Federmann's holdings of the Federmann Shares together
                    with Koor's holdings of the Koor Shares fall below 25% of
                    the Company's issued share capital, whichever is the
                    earlier.

         15.3       For the avoidance of doubt, it is clarified that this
                    Agreement shall not come to an end if Koor or Federmann
                    ceases to hold Koor Shares or the Federmann Shares, as the
                    case may be, if together with a Transfer of the remainder
                    of the Federmann Shares or the Koor Shares, as the case
                    may be, the Transferor Party (as defined in Clause 12
                    above) Transferred and assigned all its rights and
                    obligations pursuant to this Agreement to the Purchaser
                    (as defined in Clause 12 above), and the provisions of
                    this Agreement shall continue to apply and obligate the
                    Purchaser and the Other Party.

16.      Koor's Withdrawal from the Controlling Interest
         -----------------------------------------------

         16.1       Koor may at any time from October 1, 2008, provide written
                    notice to Federmann in which it shall inform Federmann of
                    Koor's desire to bring to an end its rights and
                    obligations pursuant to Clauses 4, 6 (if Koor is entitled
                    to rights pursuant to Clause 6 at that time), 7, 8, 9, 10,
                    11 (except for Clauses 11.6 and 11.7), 12, 13 and 14 of
                    this Agreement (hereinafter in this Clause 16 the "Revoked
                    Clauses"), and on the expiration of 6 months from the date
                    on which Federmann is given Koor's written notice as
                    aforesaid (hereinafter in this Clause 16 the "Expiration
                    Date"), all the Parties' rights and obligations pursuant
                    to the Revoked Clauses shall expire so that the sole
                    rights and obligations that will continue to obligate and
                    entitle the Parties pursuant to this Agreement shall be
                    the rights and obligations in Clause 5 above and this
                    Clause 16, all without prejudice to either of the Party's
                    rights to any relief in respect of a breach of any of the
                    provisions of the Revoked Clauses that occurred prior to
                    the Expiration Date.

         16.2       Should such notice be given by Koor and to the extent that
                    Federmann so wishes, the Parties shall discuss the
                    possibility of Koor's Shares that are held by Koor at that
                    time being acquired by Federmann, alone


<PAGE>


                    or together with others, without the provisions of this
                    Clause being such as to obligate either of the Parties to
                    enter into such a purchase agreement or to permit Koor to
                    Transfer the Koor Shares otherwise than in accordance with
                    the provisions of Clauses 16.3 and 16.4 below.

         16.3       As from the Expiration Date, Koor may Transfer all or any
                    of the Koor Shares that are held by it in any way, either
                    by a Stock Exchange sale or otherwise, including a
                    distribution in kind to its shareholders, subject
                    nevertheless to Federmann's Right of First Offer as
                    provided in Clause 16.4 below or in accordance with the
                    provisions of Clauses 11.6 and 11.7 above.

         16.4       Federmann's Right of First Offer
                    --------------------------------

                    16.4.1      As of the Expiration Date, Koor may not
                                Transfer any of the Koor Shares unless it
                                first gives Federmann written notice detailing
                                the quantity of the Koor Shares that it wishes
                                to transfer (hereinafter the "Offered
                                Shares").

                    16.4.2      Federmann may, but is not required to, within
                                14 Business Days of receiving Koor's notice as
                                aforesaid (hereinafter in this Clause 16.4 the
                                "Offer Period"), provide Koor written notice
                                (hereinafter in this Clause 16.4 "Federmann's
                                Notice"), informing Koor that it wishes to
                                purchase from Koor the Offered Shares or the
                                portion of them as specified by Federmann in
                                Federmann's Notice (hereinafter in this Clause
                                16. the "Shares for Purchase") and the price
                                per Share that it is willing to pay for those
                                Shares (hereinafter in this Clause 16.4 the
                                "Price Offered").

                    16.4.3      Within 7 Business Days of Koor's receiving
                                Federmann's Notice, Koor shall provide
                                Federmann written notice (hereinafter in this
                                Clause 16.4 the "Koor's Notice") if it agrees
                                or if it does not agree to Transfer to
                                Federmann the Shares for Purchase at the Price
                                Offered. Should Koor inform Federmann in
                                Koor's Notice that it agrees to Transfer to
                                Federmann the Shares for Purchase at the Price
                                Offered, Koor shall Transfer to Federmann and
                                Federmann shall accept from Koor a Transfer of
                                the Shares for Purchase, and Federmann shall
                                pay Koor the Price Offered, all by the
                                expiration of 21 Business Days from the date
                                Koor's Notice is received by Federmann
                                (hereinafter in this Clause 16.4 the
                                "Completion Period").


<PAGE>


                    16.4.4      Should Koor inform Federmann in Koor's Notice
                                that it does not agree to Transfer to
                                Federmann the Shares for Purchase at the Price
                                Offered, Koor may Transfer the Shares for
                                Purchase to a Third Party or Third Parties,
                                but only at a price greater than the Price
                                Offered on the same or more favorable payment
                                terms to Koor than those specified in Clause
                                16.4.3 above, without any further obligation
                                of Koor, all within 90 Business Days of the
                                date Koor's Notice is given. For the avoidance
                                of doubt, to the extent that the Shares for
                                Purchase have not been Transferred by Koor to
                                a Third Party as aforesaid within 90 Business
                                Days of the date of Koor's notice being
                                provided, Koor may only Transfer the Shares
                                for Purchase after again providing Federmann
                                the Right of First Offer as provided in this
                                Clause 16.4.

                    16.4.5      Should Federmann not provide Federmann's
                                Notice within the 14 Business Days mentioned
                                in Clause 16.4.2 above or should Federmann
                                state in Federmann's Notice that it wishes to
                                acquire only some of the Offered Shares or if
                                the Transfer of the Shares for Purchase has
                                not been completed by the end of the
                                Completion Period, otherwise than due to a
                                breach of contract by Koor, Koor may, within
                                90 Business Days of the date on which Koor's
                                Notice was provided as provided in Clause
                                16.4.3 above or from the end of the Completion
                                Period, as the case may be, sell the Offered
                                Shares (if Federmann's Notice has not been
                                provided as aforesaid) or that portion of them
                                that are not included in the Shares for
                                Purchase (if Federmann's Notice is provided
                                with respect to only a portion of the offered
                                Shares).

                    16.4.6      For the purpose of Clauses 16.4.3 and 16.4.5
                                above, a Transfer of Shares by means of their
                                distribution as a dividend in kind by Koor to
                                its shareholders shall be deemed as a Transfer
                                of Shares that is made on the date determining
                                the rights to receive the dividend in kind by
                                Koor's shareholders, and such Transfer as
                                aforesaid shall be deemed as though made at
                                the average closing price of the Company's
                                shares on the Tel Aviv Stock Exchange in the
                                12 trading days before and in the 12 trading
                                days after the date of giving Koor's written
                                notice as provided in Clause 16.4.1 above.

17.      Miscellaneous
         -------------


<PAGE>


         17.1       This Agreement may be signed in several separate copies
                    and each copy signed by one of the Parties shall be
                    treated as an original and all together they shall be
                    treated as a single, complete document.

         17.2       No conduct by either of the Parties shall be deemed a
                    waiver of any of its rights pursuant to this Agreement or
                    by law or as its waiver of or acquiescence to in any
                    breach or non-performance of any condition, unless the
                    waiver, acquiescence, postponement, modification,
                    cancellation or addendum has been done expressly and in
                    writing.

         17.3       This Agreement contains, embodies, merges and expresses
                    all the terms and conditions agreed between the Parties on
                    the matters mentioned herein. Any promises, guarantees,
                    agreements, whether written or oral, undertakings or
                    representations on the matters mentioned in this Agreement
                    that were given or made by the Parties prior to the making
                    of this Agreement that have not found specific expression
                    herein shall not be deemed to augment, derogate from or
                    modify the rights and obligations provided in this
                    Agreement or deriving herefrom, and the Parties shall not
                    be bound by them from the date of this Agreement
                    (hereinafter "Revocation of the Obligations Preceding
                    Signature"). It is hereby expressly agreed that the
                    Revocation of the Obligations Preceding Signature shall be
                    effective even in the event that this Agreement is revoked
                    or rescinded for any reason. The foregoing shall not be
                    such as to impair the effect of the Parties' rights and
                    obligations pursuant to the Sale [sic] Agreement.

         17.4       For the avoidance of doubt, the provisions of the
                    Shareholders Agreement between Koor and the Company,
                    including wording that is different from the wording of
                    this Agreement, shall not in any manner be applied in the
                    interpretation of this Agreement. Without prejudice to the
                    generality of the foregoing, the exchanges of documents
                    between the Parties prior to the signature of this
                    Agreement, including the drafts exchanged between them,
                    shall have no significance in the interpretation of this
                    Agreement.

         17.5       Except as otherwise provided in this Agreement, the
                    Parties' rights and obligations pursuant to this Agreement
                    are not assignable and/or transferable. The provisions of
                    this Clause are not such as to affect Federmann's right to
                    exercise its right of first refusal as provided in Clause
                    11 above by means of any third party and/or third parties.

         17.6       In this Agreement any person or entity shall be deemed as
                    holding all the Shares held by it, directly or indirectly
                    and, without prejudice to the generality of the foregoing,
                    all the Shares held, directly or indirectly, by any
                    related entity and by any member of his family, as they
                    are defined in the Securities Law, 5728-1968; and also all
                    the


<PAGE>


                    Shares that are held by any person and/or entity that is
                    construed in accordance with the provisions of the
                    Securities Law, 5728-1968 as holding Shares of the Company
                    together with that person or entity and also all the
                    Shares held through a trustee and/or registration company,
                    and also all the Shares that are held by another
                    shareholder of the Company who is jointly and severally
                    liable with a Party to this Agreement for the obligations
                    pursuant to this Agreement. Nevertheless, a Party to this
                    Agreement shall not, for the purpose of this Agreement, be
                    treated as holding Shares that are held by the other Party
                    to this Agreement.

         17.7       This Agreement shall be governed by the laws of the State
                    of Israel, without taking into account its choice of law
                    rules. Exclusive jurisdiction on all matters relating to
                    this Agreement or deriving herefrom is vested in the
                    competent courts in the City of Tel Aviv-Jaffa and in them
                    alone.

         17.8       Each of the Parties to this Agreement shall bear the legal
                    expenses that it is charged in respect of this Agreement.

         17.9       An obligation to vote by virtue of all of a Party's Shares
                    in the Company in connection with any resolution in any
                    way also includes the obligation to participate in the
                    vote by virtue of all those Shares, and not to vote for
                    any further or other proposed resolution that is such as
                    to contradict, cancel or diminish said resolution.

         17.10      Without being such as to impose any further limitations on
                    the Transfer of Shares other than that expressly provided
                    in this Agreement, each of the Parties undertakes to act
                    in good faith towards the other and not, by act or
                    omission, to cause the frustration of this Agreement's
                    provisions or any of them and/or to make them
                    unrealizable.

         17.11      The Parties hereto may extend any time specified in this
                    Agreement, either once or several times, by written notice
                    signed by two officers of each Party to this Agreement,
                    without any further approval being necessary.

18.      Notices
         -------

         18.1       The Parties' addresses for the purpose of this Agreement
                    are as set out in the heading hereto or any other address
                    in Israel of which one Party gives the other written
                    notice.

         18.2       Any notice pursuant to this Agreement shall be in writing
                    and be sent by registered mail or personal delivery by
                    messenger to the address of


<PAGE>


                    the relevant Party, as mentioned in Clause 18.1 above, and
                    that address shall in all respects in connection with this
                    Agreement also be the address of that Party for the
                    service of court process.

         18.3       Notice that is sent shall be treated as having reached the
                    addressee and come to its knowledge within five Business
                    Days if sent by registered mail or, if delivered in person
                    by messenger by 17:00 hours on any Business Day, it shall
                    be treated as received on the Business Day after delivery.


         IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:


/s/ Jonathan Kolber  /s/ Danny Biran    /s/ Michael Federmann  /s/ Dov Ninveh
-------------------  ---------------    ---------------------  --------------
Koor Industries Ltd.                    Federmann Enterprises Ltd.

                               /s/ Illegible
                               ------------------------
                               Heris Aktiengesellschaft