EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT is made as of May 18, 2005

                                 B E T W E E N:

      SPO MEDICAL EQUIPMENT LTD., a corporation incorporated under the laws of
      Israel.

      (jointly the "Corporation")

      and -

      MICHAEL BRAUNOLD, of Rannana, Israel

      (the "Employee")

CONTEXT OF THIS AGREEMENT

A. The Corporation designs, develops, manufactures and sells prototypes,
products, know-how and technologies used in Reflective Pulse Oximetry
applications.

B. The Corporation wishes to employ the Employee upon the terms and conditions
as set out herein.

C. Consecutively with the execution of this Agreement the Employee is entering
into an employment agreement with SPO Medical Inc., the Corporation's parent
company, as chief executive officer (the Sub- Agreement")

      FOR VALUE RECEIVED, the sufficiency of which is acknowledged, the parties
agree as follows:

                                     PART 1
                                 INTERPRETATION
                                 --------------

1.1 Definitions. In this Agreement, the following terms shall have the following
meanings:

      "Agreement" means this agreement and all schedules attached hereto and all
      amendments made hereto and thereto in writing by the parties.


                                      B-1
<PAGE>

      "Business Day" means a day other than a Saturday or statutory holiday in
      the State of Israel.

      "Person" includes individuals, corporations, limited partnerships, general
      partnerships, joint stock companies, joint ventures, associations,
      companies, trusts or other organizations, whether or not legal entities.

1.2 Entire Agreement. This Agreement together with the agreements and other
documents to be delivered pursuant to this Agreement (or other agreements
pertaining to employee benefits, including, without limitation, stock option and
bonus plan agreements), constitute the entire agreement between the parties
pertaining to the subject matter of this Agreement and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties and there are no warranties, representations or other
agreements between the parties in connection with the subject matter of this
Agreement except as specifically set forth in this Agreement and any document
delivered pursuant to this Agreement. No supplement, modification or waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.

1.3 Sections and Headings. The division of this Agreement into parts and
sections and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Agreement. The terms
"this Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular article, section or other portion hereof and
include any agreement or instrument supplemental or ancillary hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to parts and sections are to parts and sections of this Agreement.

1.4 Number & Gender. Words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall include the
feminine and neuter genders and vice versa.

1.5 Applicable Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Israel applicable therein.

1.6 Currency. Unless otherwise specified, all references herein to currency
shall be references to currency of the United States.

1.7 Calculation of Time. When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date which is the reference date in calculating such period shall be
excluded. If the last day of such period is a non Business Day, the period in
question shall end on the next Business Day.

                                     PART 2
                             APPOINTMENT AND DUTIES
                             ----------------------

2.1 Appointment. The Corporation agrees to employ the Employee as its Chief
Executive Officer upon the terms and conditions contained herein and the
Employee accepts such appointment.


                                      B-2
<PAGE>

2.2 Term. The employment of the Employee hereunder shall commence on the date
hereof and shall continue for an initial term of three years (the "Initial
Term") unless terminated in accordance with the provisions of this Agreement.
This Agreement shall be renewed for successive two year terms (each a "Renewal
Term") unless the Corporation or Employee indicates in writing, more than 90
days prior to the termination of this Initial term or any Renewal term, that it
does not intend to renew this Agreement.

2.3 Duties and Reporting. The Employee will report directly to the board of
directors of the Corporation and shall carry out all duties and responsibilities
which are from time to time assigned to him by the board of directors.

                                     PART 3
                               BENEFITS & EXPENSES
                               -------------------

3.1 Gross Salary. During the term hereof, and subject to the performance of the
services required to be performed hereunder by Employee, the Corporation shall
pay to the Employee for all services rendered hereunder, as salary, payable not
less often than once per month and in accordance with the Corporation 's normal
and reasonable payroll practices, a monthly gross amount equal to U.S. $13,250
(the "Gross Salary") payable in NIS. Translations to Israeli currency shall be
calculated on the basis of the representative rate of exchange published by a
daily newspaper in Israel on the date of payment. This salary shall be reviewed
periodically and may be favorably adjusted along with other benefits
accordingly.

3.2 Bituach Menahalim. The Corporation and the Employee will obtain and maintain
Manager's Insurance (Bituach Menahalim) and Professional Disability Insurance
for the exclusive benefit of the Employee in the customary form. Each of the
Corporation and the Employee shall contribute toward the premiums payable in
respect of such insurance those amounts which would be recognized under
applicable law, but in no event shall such contributed amounts be more than
thirteen and one third percent (13 1/3%) of each monthly Gross Salary payment
from the Corporation and five percent (5 %) of such amount from the Employee. On
termination, Corporation shall assign all such policies to Employee which shall
include all amounts of the funds and benefits accrued under such policies.

3.3 Keren Heshtamlut. The Corporation and the Employee shall maintain an
advancement fund (keren Heshtamlut) for exclusive benefit of the Employee. The
Corporation shall contribute to such fund an amount equal to 7-1/2% of each
monthly Gross Salary payment and the employee shall contribute to such fund an
amount equal to 2-1/2% of each monthly Gross Salary payment. The Employee hereby
instructs the Corporation to transfer to such advancement fund the amount of the
Employee's and the Corporation 's contribution from each monthly Gross Salary
payment. Employee can elect to receive any part of the Corporation's
contribution in cash should this be more efficient for tax purposes at the
Employee's election. On termination, Employee will be eligible to receive all
amounts accrued in the fund.

3.4 Car, Cell Phone. Corporation shall provide Employee with use of automobile
and Corporation shall pay for registration, gas, maintenance and insurance; and
shall provide the Employee with a cell phone and pay for its maintenance and
use. The taxable benefits on these items will be grossed up in the monthly
salary "gilum hatavah".


                                      B-3
<PAGE>

3.5 Expenses. All expenses reasonably incurred by the Employee shall be
reimbursed, together with any applicable sales and goods and services taxes, by
the Corporation within 10 Business Days after presentation by the Employee of
proper invoices and receipts in keeping with the policies of the Corporation as
established from time to time.

3.6 Vacation. The Employee shall be entitled to an aggregate of 25 business days
of paid vacation per contract year (to run consecutively with vacation under the
Sub- Agreement), to be taken at times that are mutually agreeable to the
parties. In addition, the Employee shall be entitled to all paid holidays given
by the Company to its employees. Vacation days shall be prorated for any portion
of a year to the date of termination. Any unutilized vacation days shall accrue
from year to year.

                                     PART 4
                              EMPLOYEE'S COVENANTS
                              --------------------

4.1 Service. The Employee shall devote the whole of his time, attention and
ability to the business of the Corporation and SPO Medical Inc. under the
Sub-Agreement and shall well and faithfully serve the Corporation and shall use
his best efforts to promote the interests of the Corporation. The Employee
appreciates that the Employee's duties may involve significant travel from the
Employee's place of employment, and the Employee agrees to travel as reasonably
required in order to fulfill the Employee's duties. The Employee may sit on
boards of other companies including health care and information technology firms
unless there is a reasonable basis upon which the Corporation may deny him the
right to do so.

4.2 Duties and Responsibilities. The Employee shall duly and diligently perform
all the duties assigned to him while in the employ of the Corporation, and shall
truly and faithfully account for and deliver to the Corporation all money,
securities and things of value belonging to the Corporation which the Employee
may from time to time receive for, from or on account of the Corporation.

4.3 Rules and Regulations. The Employee shall be bound by and shall faithfully
observe and abide by all the rules and regulations of the Corporation from time
to time in force which are brought to his notice.

                                     PART 5
                    CONFIDENTIAL INFORMATION AND DEVELOPMENTS
                    -----------------------------------------

5.1 "Confidential Information" means information, whether or not originated by
the Employee, that relates to the business or affairs of the Corporation, its
affiliates, clients or suppliers and is confidential or proprietary to, about or
created by the Corporation, its affiliates, clients, or suppliers. Confidential
Information includes, but is not limited to, the following types of confidential
information and other proprietary information of a similar nature (whether or
not reduced to writing or designated or marked as confidential):


                                      B-4
<PAGE>

      (i)   work product resulting from or related to work or projects performed
            for or to be performed for the Corporation or its affiliates,
            including but not limited to, the interim and final lines of
            inquiry, hypotheses, research and conclusions related thereto and
            the methods, processes, procedures, analysis, techniques and audits
            used in connection therewith;

      (ii)  computer software of any type or form and in any stage of actual or
            anticipated development, including but not limited to, programs and
            program modules, routines and subroutines, procedures, algorithms,
            design concepts, design specifications (design notes, annotations,
            documentation, flowcharts, coding sheets, and the like), source
            code, object code and load modules, programming, program patches and
            system designs;

      (iii) information relating to developments (as hereinafter defined) prior
            to any public disclosure thereof, including but not limited to, the
            nature of the developments, production data, technical and
            engineering data, test data and test results, the status and details
            of research and development of products and services, and
            information regarding acquiring, protecting, enforcing and licensing
            proprietary rights (including patents, copyrights and trade
            secrets);

      (iv)  internal Corporation personnel and financial information, vendor
            names and other vendor information, purchasing and internal cost
            information, internal services and operational manuals, and the
            manner and method of conducting the Corporation's business;

      (v)   marketing and development plans, price and cost data, price and fee
            amounts, pricing and billing policies, quoting procedures, marketing
            techniques and methods of obtaining business, forecasts and forecast
            assumptions and volumes, and future plans and potential strategies
            of the Corporation that have been or are being discussed; and

      (vi)  all information that becomes known to the Employee as a result of
            employment that the Employee, acting reasonably, believes is
            confidential information or that the Corporation takes measures to
            protect.

5.2 Confidential Information does not include:

      (i)   the general skills and experience gained during the Employee's
            employment or engagement with the Corporation that the Employee
            could reasonably have been expected to acquire in similar employment
            or engagements with other companies;

      (ii)  information publicly known without breach of this Agreement or
            similar agreements; or


                                      B-5
<PAGE>

      (iii) information, the disclosure of which is required to be made by any
            law, regulation, governmental authority or court (to the extent of
            the requirement), provided that before disclosure is made, notice of
            the requirement is provided to the Corporation, and to the extent of
            the requirement, (to the extent reasonably possible in the
            circumstances) the Corporation is afforded an opportunity to dispute
            the requirement.

5.3 "Developments" means all discoveries, inventions, designs, works of
authorship, improvements and ideas (whether or not patentable or copyrightable)
and legally recognized proprietary rights (including, but not limited to,
patents, copyrights, trademarks, topographies, know how and trade secrets), and
all records and copies of records relating to the foregoing, that relates solely
to the Corporation's business and improvements and modifications to it:

      (i)   result or derive from the Employee's employment or from the
            Employee's knowledge or use of Confidential Information;

      (ii)  are conceived or made by the Employee (individually or in
            collaboration with others) during the term of the Employee's
            employment by the Corporation;

      (iii) result from or derive from the use or application of the resources
            of the Corporation or its affiliates; or

      (iv)  relate to the business operations of or actual or demonstrably
            anticipated research and development by the Corporation or its
            affiliates.

For greater certainty, discoveries, inventions, designs, works of authorship,
improvements and ideas (whether or not patentable or copyrightable) of the
Employee that do not relate to the business of the Corporation are not the
subject matter of this Agreement.

                                     PART 6
                           NO CONFLICTING OBLIGATIONS
                           --------------------------

6.1 The Employee warrants to the Corporation that:

      (i)   the performance of the Employee's duties as an employee of the
            Corporation will not breach any agreement or other obligation to
            keep confidential the proprietary information of any other party;
            and

      (ii)  the Employee is not bound by any agreement with or obligation to any
            other party that conflicts with the Employee's obligations as an
            employee of the Corporation or that may affect the Corporation's
            interest in the Developments.

6.2 The Employee will not, in the performance of the Employee's duties as an
employee of the Corporation:


                                      B-6
<PAGE>

      (i)   improperly bring to the Corporation or use any trade secrets,
            confidential information or other proprietary information of any
            other party; or

      (ii)  knowingly infringe the intellectual property rights of any other
            party.

                                     PART 7
                          COMPETITION AND SOLICITATION
                          ----------------------------

7.1 Definitions.

      "Competitive Business" means any business that supplies products or
      services competitive with those then supplied by the Corporation or which
      the Corporation was contemplating supplying when the Employee was employed
      by the Corporation.

      "Employment Period" means the period during which the Employee is employed
      by the Corporation.

      "Termination Date" means the date that the Employee's employment with the
      Corporation is terminated or expires in accordance with Section 2.2 or
      Part 12.

7.2 Non-Competition. The Employee acknowledges that employment by the
Corporation will give the Employee access to the Confidential Information, and
that the Employee's knowledge of the Confidential Information will enable the
Employee to put the Corporation at a significant competitive disadvantage if the
Employee is employed or engaged by or becomes involved in a Competitive
Business. Accordingly, during the Employment Period and for one year after the
Termination Date, the Employee will not, directly or indirectly, individually or
in partnership or in conjunction with any other Person:

      (i) be engaged, directly or indirectly, in any manner whatsoever,
      including, without limitation, either individually or in partnership,
      jointly or in conjunction with any other person, or as an employee,
      consultant, adviser, principal, agent, member or proprietor in any
      Competitive Business;

      (ii) be engaged, directly or indirectly, in any manner whatsoever,
      including, without limitation, either individually or in partnership,
      jointly or in conjunction with any other person, or as an employee,
      consultant, adviser, principal, agent, member or proprietor in any
      Competitive Business in a capacity in which the loyal and complete
      fulfilment of the Employee's duties to that Competitive Business would (i)
      inherently require that the Employee use, copy or transfer Confidential
      Information, or (ii) make beneficial any use, copy or transfer of
      Confidential Information; or

      (iii) advise, invest in, lend money to, guarantee the debts or obligations
      of, or otherwise have any other financial or other interest (including an
      interest by way of royalty or other compensation arrangements) in or in
      respect of any Person which carries on a Competitive Business.


                                      B-7
<PAGE>

The restriction in Subsection 7.2 (iii) will not prohibit the Employee from
holding not more than 5% of the issued shares of a public company listed on any
recognized stock exchange or traded on any bona fide "over the counter" market
anywhere in the world.

For greater certainty, the Employee's obligations under this Section are in
addition to the obligations respecting disclosure and use of Confidential
Information in Part 8.

7.3 No Solicitation of Clients and Suppliers. The Employee acknowledges the
importance to the business carried on by the Corporation of the client and
supplier relationships developed by it and the unique opportunity that the
Employee's employment and the Employee's access to the Confidential Information
offers to interfere with these relationships. Accordingly, the Employee will not
during the Employment Period and for a period of 12 months thereafter directly
or indirectly, contact or solicit any person who the Employee knows to be a
prospective, current or former client or supplier of Corporation (who, in the
case of a former client or supplier of the Corporation, has had dealings with
the Corporation at any time during the 12 month period immediately prior to the
end of the Employment Period) for the purpose of selling to the client or buying
from the supplier any products or services that are the same as or substantially
similar to, or in any way competitive with, the products or services sold or
purchased by Corporation during the Employee's employment or at the end thereof,
as the case may be.

7.4 No Solicitation of Employees. The Employee acknowledges the importance to
the business carried on by the Corporation of the human resources engaged and
developed by it and the unique access that the Employee's employment offers to
interfere with these resources. Accordingly, the Employee will not during the
Employment Period and for a period of 2 years thereafter, induce or solicit,
attempt to induce or solicit or assist any third party in inducing or soliciting
any employee or consultant of the Corporation, to leave the Corporation or to
accept employment or engagement elsewhere.

7.5 Independent Covenants. Each of Subsections 7.2 and 7.3 will be construed as
constituting obligations independent of any other obligations in this Agreement.
The existence of any claim or cause of action the Employee may have or assert
against the Corporation, whether based on this Agreement or otherwise, will not
constitute a defence to the enforcement by the Corporation of any of the
covenants and agreements in the foregoing sections.

                                     PART 8
                            CONFIDENTIAL INFORMATION
                            ------------------------

8.1 Protection of Confidential Information. All Confidential Information,
whether it is developed by the Employee during the Employment Period or by
others employed or engaged by or associated with the Corporation or its
affiliates or clients, is the exclusive and confidential property of the
Corporation or its affiliates or clients, as the case may be, and will at all
times be regarded, treated and protected as such, as provided in this Agreement.

8.2 Covenants Respecting Confidential Information. As a consequence of the
acquisition of Confidential Information, the Employee will occupy a position of
trust and confidence with respect to the affairs and business of the Corporation
and its affiliates and clients. In view of the foregoing, it is reasonable and
necessary for the Employee to make the following covenants regarding the
Employee's conduct during and subsequent to the Employee's employment by the
Corporation.


                                      B-8
<PAGE>

8.3 Non Disclosure. At all times during and subsequent to the Employee's
employment with the Corporation, the Employee will not disclose Confidential
Information to any Person (other than as necessary in carrying out the
Employee's duties on behalf of the Corporation) without first obtaining the
Corporation's consent, and the Employee will take all reasonable precautions to
prevent inadvertent disclosure of any Confidential Information. This prohibition
includes, but is not limited to, disclosing or confirming the fact that any
similarity exists between the Confidential Information and any other
information.

8.4 Using, Copying, etc. At all times during and subsequent to the Employee's
employment with the Corporation, the Employee will not use, copy, transfer or
destroy any Confidential Information (other than as necessary in carrying out
the Employee's duties on behalf of the Corporation) without first obtaining the
Corporation's consent, and the Employee will take all reasonable precautions to
prevent inadvertent use, copying, transfer or destruction of any Confidential
Information. This prohibition includes, but is not limited to, licensing or
otherwise exploiting, directly or indirectly, any products or services that
embody or are derived from Confidential Information or exercising judgment or
performing analysis based upon knowledge of Confidential Information.

8.5 Return of Confidential Information. Within 2 Business Days after the
termination of the Employee's employment on any basis and of receipt by the
Employee of the Corporation's written request, the Employee will promptly
deliver to the Corporation all property of or belonging to or administered by
Corporation including without limitation all Confidential Information that is
embodied in any physical or ephemeral form, whether in hard copy or on magnetic
media, and that is within the Employee's possession or under the Employee's
control.

8.6 Obligations Continue. The Employee's obligations under this Part 8 are to
remain in effect in perpetuity.

                                     PART 9
                              INTELLECTUAL PROPERTY
                              ---------------------

9.1 Ownership. All Developments will be the exclusive property of the
Corporation and the Corporation will have sole discretion to deal with
Developments. For greater certainty, all work done during the Employment Period
by the Employee for the Corporation or its affiliates is a work for hire of
which the Corporation or its affiliate, as the case may be, is the first author
for copyright purposes and in respect of which all copyright will vest in the
Corporation or the relevant affiliate, as the case may be.

9.2 Records. The Employee will keep complete, accurate and authentic notes,
reference materials, data and records of all Developments in the manner and form
requested by the Corporation. All these materials will be Confidential
Information upon their creation.


                                      B-9
<PAGE>

9.3 Moral Rights. The Employee hereby irrevocably waives all moral rights
arising under statute in any jurisdiction or under common law which the employee
may have now or in the future with respect to the Developments, including,
without limitation, any rights the Employee may have to have the Employee's name
associated with the Developments or to have the Employee's name not associated
with the Developments, any rights the Employee may have to prevent the
alteration, translation or destruction of the Developments, and any rights the
Employee may have to control the use of the Developments in association with any
product, service, cause or institution. The Employee agrees that this waiver may
be invoked by the Corporation, and by any of its authorized agents or assignees,
in respect of any or all of the Developments and that the Corporation may assign
the benefit of this waiver to any Person.

9.4 Further Assurances. The Employee will do all further things that may be
reasonably necessary or desirable in order to give full effect to the foregoing.
If the Employee's co-operation is required in order for the Corporation to
obtain or enforce legal protection of the Developments following the termination
of the Employee's employment, the Employee will provide that co-operation so
long as the Corporation pays to the Employee reasonable compensation for the
Employee's time at a rate to be agreed, provided that the rate will not be less
than the last base salary or compensation rate paid to the Employee by the
Corporation during the Employee's employment.

                                     PART 10
                             CONSENT TO ENFORCEMENT
                             ----------------------

      The Employee confirms that all restrictions in Part 8 and 9 are reasonable
and valid and all defences to the strict enforcement thereof by the Corporation
are waived by the Employee. Without limiting the generality of the forgoing, the
Employee hereby consents to an injunction being granted by a court of competent
jurisdiction in the event that the Employee is in any breach of any of the
provisions stipulated in Part 8 and 9. The Employee hereby expressly
acknowledges and agrees that injunctive relief is an appropriate and fair remedy
in the event of a breach of any of the said provisions.

                                     PART 11
                       WARRANTIES, COVENANTS AND REMEDIES
                       ----------------------------------

11.1 The obligations of the Employee as set forth in Parts 6 through 9 will be
deemed to have commenced as of the date on which the Employee was first employed
by Corporation. The Employee warrants that the Employee has not, to date,
breached any of the obligations set forth in any of those Sections. Any breach
or threatened breach of those sections by the Employee will constitute Just
Cause for immediate termination of the Employee's employment or engagement by
the Corporation.

11.2 The Employee understands that the Corporation has expended significant
financial resources in developing its products and the Confidential Information.
Accordingly, a breach or threatened breach by the Employee of any of Parts 6
through 9 could result in unfair competition with the Corporation and could
result in the Corporation and its shareholders suffering irreparable harm that
is not capable of being calculated and that cannot be fully or adequately
compensated by the recovery of damages alone. Accordingly, the Employee agrees
that the Corporation will be entitled to interim and permanent injunctive
relief, specific performance and other equitable remedies, in addition to any
other relief to which the Corporation may become entitled.


                                      B-10
<PAGE>

11.3 The Employee's obligations under each of Parts 6 through 9 are to remain in
effect in accordance with each of their terms and will exist and continue in
full force and effect despite any breach or repudiation, or alleged breach or
repudiation, of this Agreement or the Employee's employment (including, without
limitation, the Employee's wrongful dismissal) by the Corporation.

                                     PART 12
                                   TERMINATION
                                   -----------

12.1 Termination by the Employee. The Employee may terminate this Agreement upon
60 Business Days prior written notice given by the Employee to the Corporation.
The Corporation, at its sole discretion, may elect to accept the 60 Business
Days written notice or to reduce or eliminate the notice period. In such event,
the Employee's employment shall terminate on the earlier day elected by the
Corporation. Such election on the part of the Corporation will not alter the
nature of the termination as voluntary and the Corporation will not be required
to pay any severance or termination payments in respect of a termination by the
Employee under this Section 12.1. Upon the termination of employment by the
Employee under this Section 12.1 the Corporation shall pay to the Employee all
bonuses and other benefits earned or accrued up to the date of termination, but
otherwise all obligations of the Corporation under this Agreement shall end.

12.2 Definition of "Just Cause". "Just Cause" means:

(i) Employee's conviction of, or plea of nolo contendere, to any felony or to a
crime involving moral depravity or fraud; (ii) Employee's commission of an act
of dishonesty or fraud or breach of fiduciary duty or act that has a material
adverse effect on the name or public image of the Company, as determined by the
Board provided the Board affords the Employee the opportunity to personally
appear before the Board in order to state his case prior to the Board voting to
so terminate the Employee; (iii) Employee's commission of an act of willful
misconduct or gross negligence, as determined by the Board provided the Employee
shall have the opportunity to state his case before the Board prior to the Board
taking such decision to so terminate the Employee; (iv) the failure of Employee
to perform his duties under this Agreement or the Sub Agreement; (v) the
material breach of any of Employee's material obligations under this Agreement
or the Sub Agreement; (vi) the failure of Employee to follow a directive of the
Board; or (vii) excessive absenteeism, chronic alcoholism or any other form of
addiction that prevents Employee from performing the essential functions of his
position with or without a reasonable accommodation; provided, however, that the
Company may terminate Employee's employment forJust Cause, as to (iv) or (v)
above, only after failure by Employee to correct or cure, or to commence or to
continue to pursue the correction or curing of, such conduct or omission within
ten (10) days after receipt by Employee of written notice by the Company of each
specific claim of any such misconduct or failure.


                                      B-11
<PAGE>

12.3 Termination by the Corporation for Just Cause. The Corporation may
terminate this Agreement at any time for Just Cause without notice and (except
as provided in the immediately following sentence) without payment of any
compensation by way of anticipated earnings, damages, or other relief of any
kind whatsoever. Upon the termination of employment by the Corporation for Just
Cause, the Corporation shall pay to the Employee all salaries, bonuses, vacation
and other benefits earned or accrued up to the date of termination, but
otherwise all obligations of the Corporation under this Agreement end.

12.4 Termination or Decision not to Renew by the Corporation for Other Than Just
Cause. The Corporation may terminate this Agreement at any time for other than
Just Cause or decide not to renew this Agreement upon any renewal date for other
than Just Cause upon the following terms:

      (a) if the Corporation so terminates this Agreement at any time during the
      Initial Term of this Agreement, the Corporation shall pay to the Employee
      an amount equal to the Gross Salary payable for the longer of (a) the
      period from the date of such termination to the end of the Initial Term as
      if the Agreement had not been so terminated and (b) twelve months and
      during such period Employee shall have use of a vehicle in accordance with
      Section 3.4.; and

      (b) if the Corporation so terminates this Agreement after the Initial Term
      or during a Renewal Term or so fails to renew the Initial Term or any
      successive Renewal Term the Corporation shall pay the Employee an amount
      equal to the Gross Salary then payable to the Employee for a period of
      twelve months as if the Agreement had not been so terminated or had been
      renewed and during such period Employee shall have use of a vehicle in
      accordance with Section 3.4; and

      (c ) upon any such termination or failure to renew, all bonuses or other
      benefits earned or accrued up to the date of termination or expiry shall
      be paid by the Corporation, but except for such payments and the payments
      to be made pursuant to Sections 12.4(a) or (b), as applicable, all
      obligations of the Corporation under this Agreement shall end upon such
      termination or failure to renew. Payments under Sections 12.4(a) or (b)
      shall be payable twice monthly subject to deductions required under law.

12.5 Termination by the Employee for Good Reason. The Employee may terminate
this Agreement at any time upon the occurrence of any of the following events
(each a "Good Reason"), if such occurrence takes place without the express
written consent of the Employee:

      (i)   a change in the Employee's title or position or a material
            diminution in the Employee's duties or the assignment to the
            Employee of duties which materially impairs the Employee's ability
            to function in his current capacity for the Corporation, or, with
            respect an assignment of duties only, is materially inconsistent
            with his duties;

      (ii)  any material change in the Employee's direct reporting obligations;

      (iii) Termination or decision not to renew by SPO Medical Inc. for other
            than just cause under the Sub Agreement.


                                      B-12
<PAGE>

In the event that the Employee terminates this Agreement for Good Reason, he
shall be entitled to the same payments and benefits as provided in Section 12.4
of this Agreement as if the Corporation had terminated this Agreement at the
time that the Employee terminates this Agreement under this Section 12.5.

12.6 Full and Final Release. In order to be eligible for the payments as set
forth in this Section 12 the Employee must (i) execute and deliver to the
Corporation a general release, in a form satisfactory to the Corporation, and
(ii) be and remain in full compliance with his obligations under this Agreement.

12.7 Fair and Reasonable. The parties confirm that the provision contained in
Sections 12.4 and 12.5 are fair and reasonable and that all such payments shall
be in full satisfaction of all claims which the Employee may otherwise have at
law against the Corporation including, or in equity by virtue of such
termination of employment.

12.8 Return of Property. Upon the termination of the Employee's employment for
any reason whatsoever, the Employee shall at once deliver or cause to be
delivered to the Corporation all books, documents, effects, money, computer
equipment, computer storage media, securities or other property belonging to the
Corporation or for which the Corporation is liable to others, which are in the
possession, charge, control or custody of the Employee.

12.9 Provisions Which Operate Following Termination. Notwithstanding any
termination of this Agreement for any reason whatsoever, provisions of this
Agreement necessary to give efficacy thereto shall continue in full force and
effect.

12.10 Board. Notwithstanding the foregoing, the termination of Employee's
employment hereunder for any reason shall automatically be deemed as Employee's
resignation from the Board of Directors of the Corporation and any affiliates
without any further action, except when the Board shall, in writing, request a
continuation of duty as a Director in its sole discretion.

12.11 Sub-Agreement. Termination of the Sub Agreement shall automatically be
deemed termination of this Agreement for like reasons and the applicable
provisions of this Agreement shall apply.

                                     PART 13
                                     GENERAL
                                     -------

13.1 Benefit & Binding. This Agreement shall enure to the benefit of and be
binding upon the respective successors and permitted assigns of the parties
hereto.

13.2 Amendments & Waivers. No amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by all of the parties
hereto. No waiver of any breach of any provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided in the written waiver, shall be
limited to the specific breach waived.

13.3 Time. Time shall be of the essence of this Agreement.


                                      B-13
<PAGE>

13.4 Assignment. Neither this Agreement nor the rights and obligations hereunder
shall be assignable by either party without the consent of the other.

13.5 Severability. If any provision of this Agreement is determined to be
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provision and all other provisions
hereof shall continue in full force and effect.

13.6 Attornment. For the purposes of all legal proceedings this Agreement shall
be deemed to have been performed in the State of Israel and the labour courts of
Kfar Saba shall have jurisdiction to entertain any action arising under this
Agreement.

                                     PART 14
                                 ACKNOWLEDGEMENT
                                 ---------------

      The Employee acknowledges that:

      (i)   the Employee has received a copy of this Agreement;

      (ii)  the Employee has had sufficient time to review and consider this
            Agreement thoroughly;

      (iii) the Employee has read and understands the terms of this Agreement
            and his obligations under this Agreement;

      (iv)  the restriction placed upon the Employee by this Agreement are
            reasonably necessary to protect the Corporation's proprietary
            interests in the Confidential Information and the Developments and
            will not preclude the Employee from being gainfully employed in a
            suitable capacity following the termination of the Employee's
            employment, give the Employee's knowledge and experience;

      (v)   the Employee has been given an opportunity to obtain independent
            legal advice, or such other advice as the Employee may desire,
            concerning the interpretation and effect of this Agreement and by
            signing this Agreement the Employee has either obtained advice or
            voluntarily waived the Employee's opportunity to receive the same;
            and

      (vi)  this Agreement is entered into voluntarily by the Employee.

                                     PART 15
                                     NOTICES
                                     -------

      Any demand, notice or other communication (the "Notice") to be given in
connection with this Agreement shall be given in writing on a Business Day and
may be given by personal delivery or by transmittal by facsimile addressed to
the recipient as follows:


                                      B-14
<PAGE>

To the Corporation:  3 HaGavish St., Kfar Saba, Israel
                     Attention:
                     Facsimile: 09-764-4851

To the Employee:     236 Ahuza #1, Rannana, Israel

or such other address or facsimile number as may be designated by notice by any
party to the other. Any Notice given by personal delivery will be deemed to have
been given on the day of actual delivery and if transmitted by facsimile before
3:00 pm on a Business Day, will be deemed to have been given on that Business
Day and if transmitted by facsimile after 3:00 pm on a Business Day, will be
deemed to have been given on the next Business Day after the date of
transmission.

                                     PART 16
                               FURTHER ASSURANCES
                               ------------------

      The parties shall from time to time execute and deliver all such further
documents and do all acts and things as the other party may reasonably require
to effectively carry out or better evidence or perfect the full intent and
meaning of this Agreement.

                                     PART 17
                                 FAX SIGNATURES
                                 --------------

      This Agreement may be signed either by original signature or by facsimile
signature.


                                      B-15
<PAGE>

                                     PART 18
                                  COUNTERPARTS
                                  ------------

      This Agreement may be executed by the parties in one or more counterparts,
each of which when so executed and delivered shall be an original and such
counterparts shall together constitute one and the same instrument.

      IN WITNESS WHEREOF the parties have duly executed this Agreement.

                                         SPO MEDICAL EQUIPMENT LTD.

                                         /s/ Israel Sarussi
                                         Per: Director




                                         /s/ Michael Braunold

                                         MICHAEL BRAUNOLD


                                      B-16