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                                    ADDENDUM

This Addendum is made as of 16 June, 2003 (the "Addendum"), by and among (i)
Rafael Armament Development Authority Ltd. ("Rafael"), (ii) Galram Technologies
Industries Ltd. ("Galram"),), (iii) DEP Technologies Holdings Limited ("DEP"),
and (iv) RDC Rafael Development Corporation Ltd. ("RDC"), to amend Section 7.1
of the Joint Venture Agreement dated July 1993 by and among the parties hereto
(the "Joint Venture Agreement).

1.   Unless otherwise set forth herein, all capitalized terms shall have the
     meaning ascribed to them in the Joint Venture Agreement.

2.   Definitions. For the purpose of this Addendum:

     2.1. "Affiliate" shall mean with respect to any entity or person, any other
          entity or person controlling, controlled by or under common control
          with such entity or person.

     2.2. "Company's Value" shall mean, in connection with either public or
          private offering of the securities of any NewCo, as defined hereunder:
          (A) the aggregate number of shares of NewCo on a fully diluted basis
          immediately prior to the consummation of the said offering, after
          giving effect to the conversion of all convertible securities and the
          exercise of all securities exercisable into the shares of NewCo (the
          "Securities"), multiplied by (B) the price per share set under the
          proposed offering.

     2.3. "Exit" shall mean, with respect to any NewCo, the earlier to occur of
          (i) the initial public offering of the Securities of NewCo ("IPO");
          (ii) the sale of at least 80% of NewCo's Securities held by RDC; (iii)
          the sale of all or substantially all of the assets or shares of NewCo;
          or (iv) the merger of NewCo with another entity, where NewCo is not
          the surviving entity.

     2.4. "Exit Consideration" shall mean the following consideration to be
          received by RDC pursuant to an Exit:

          2.4.1. If the Exit is pursuant to an IPO, then (A) the aggregate
               number of shares of NewCo held by RDC immediately prior to the
               IPO, multiplied by (B) the price per shares set under the IPO;
               and otherwise

          2.4.2. In all other Exit events, the fair market value of the
               consideration actually received by RDC pursuant to or in
               connection with an Exit, whether in cash, assets and/or
               securities.

     2.5. "NewCo" shall have the same meaning as defined under Section 3 below.

     2.6. "Rafael Management" shall mean for the purpose of this Agreement (i)
          the management of Rafael, which generally includes the CEO, the vice
          president for finance and control and the General Counsel of Rafael,
          or (ii) in the event that the organization described above is not
          functioning, the CEO of Rafael.





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3.   Amendment to Section 7.1.2. Subject to the provisions of Section 8 below,
     Section 7.1.2 of the Joint Venture Agreement is hereby replaced in its
     entirety with the following:

     "(A) In the event that RDC shall identify Other Technologies which it
          wishes to exploit commercially, it shall advise Rafael in writing of
          its wish to obtain license to exploit such Technologies in the
          non-military market. The notice by RDC shall specify the Technologies
          in question, and the plan of RDC for its development and exploitation.

     (B)  Following the said notice, RDC shall incorporate a new entity
          ("NewCo"), and Rafael shall grant NewCo a world-wide, exclusive,
          royalty-free transferable (subject to the restrictions below) and
          perpetual field-of-use license to use and commercially exploit the
          relevant Other Technologies in the non-military field of use (the
          "Other Technologies License"). Notwithstanding the foregoing, Rafael
          may rescind the Other Technology License in the event of a material
          breach of its terms on behalf of NewCo, including without limitations,
          if NewCo shall use such license outside its field of use. The transfer
          of the Other Technology License shall be subject to Rafael's prior
          approval, which shall not be withheld other than for (i) military
          defense restrictions or due to Israel's security considerations, or
          (ii) if the transferee is an entity which, at the time of such
          assignment, directly competes with Rafael in the military market.

     (C)  In consideration for the Other Technologies License, RDC shall grant
          Galram an option (the "Option") to receive from RDC shares of NewCo,
          constituting up to 3% of all of NewCo's outstanding share capital on a
          fully diluted basis as of the date of the grant of the Option, subject
          to the Anti-Dilution Protection and adjustments to be made in
          accordance with the provisions of section (E) below, including all
          outstanding warrants, options, options to employees under approved
          option plan, etc. (the "Option Shares"), for the exercise price equal
          to the par value of the share per each such Option Share (the
          "Exercise Price") . For the avoidance of any doubt, the grant of the
          Option and the transfer of the Option Shares shall not be subject to
          any first-refusal and/or any similar rights of the other shareholders
          of NewCo. For the avoidance of any doubt, the Option (provided granted
          prior to the termination hereof) shall survive the termination of this
          Addendum, and shall only be terminated in accordance with the
          provision hereof.

     (D)  The number of Option Shares to which the Option shall be exercisable
          into will be increased upon each issuance of new Securities by NewCo,
          so that the Option Shares will continue to constitute 3% of NewCo's
          share capital as set forth above following such issuance (the
          "Anti-Dilution Protection"), all of which exercisable for the
          respective Exercise Price, until the earlier to occur of the following
          events:

          (i) The end of a 4 (four) years period commencing as of the
          incorporation of NewCo, provided however, that if an offer or a
          transaction for the





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          issuance of shares or any other Securities is outstanding or under
          negotiations or discussions, then only at such time when such proposed
          transaction is consummated or no longer in effect;

          (ii) The raising of funds by NewCo from non-Affiliated investors
          through either public or private offering of NewCo's Securities,
          provided however that the pre-money Company's Value of NewCo, in
          connection with the proposed offering, shall be valued at not less
          than US$66,000,000.

          (iii) Immediately prior to the expiration of the Option pursuant to
          the provisions of Sub-Section (F) below.

     (E)  In the event of a stock split, stock reverse split, issuance of bonus
          shares, or any other reorganization or recapitalization of the share
          capital of NewCo, the number of Option Shares and the Exercise Price
          shall be accordingly adjusted to reflect such recapitalization;
          provided however that such adjustment shall be made only to the extent
          not already covered under the Anti Dilution Protection hereunder.

     (F)  The Option shall expire immediately prior to the consummation of an
          Exit or the winding up, liquidation or dissolution of NewCo, whichever
          occurs earlier."

4.   Amendment to Section 7.1.3. Subject to the provisions of Section 8 below,
     Section 7.1.3 of the Joint Venture Agreement is hereby replaced in its
     entirety with the following:

     "(A) In the event that Rafael and/or Galram identify Other Technologies and
          wish, on their own initiative, to cooperate with a third party in the
          commercial exploitation of such technologies in the non-military
          market through a jointly held, directly or indirectly, vehicle (the
          "Vehicle") or to sell or license any Other Technologies, they will
          serve RDC a business plan prepared by a "Big 5" firm of Independent
          Certified Public Accountants, describing the features of the Other
          Technologies in question and setting out the major elements and terms
          of the venture as contemplated by Rafael and/or Galram (the
          "Venture"), including description of intellectual property aspects,
          market definition, relevant financial projections and such other
          similar matters, all in accordance with high professional standards
          (the "Business Plan").

     (B)  RDC shall then have the right to notify Rafael in writing within the
          next 30 days, whether or not it is interested in the Venture. Rafael
          and/or Galram shall make their best reasonable efforts to provide RDC
          with any additional information available to Rafael it shall require
          in this respect.

     (C)  If RDC shall not notify Rafael that it is interested in the Venture as
          aforesaid, then Rafael Management shall be at liberty to approve the
          further development and research of, and/or the search for third-party
          partners for such Venture (the "Management Approval"). In such event,
          Rafael shall so





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          notify RDC in writing and RDC shall have the right to notify Rafael in
          writing within the next 30 days after receipt of a written notice
          regarding such Management Approval, that it is interested in the
          Venture.

     (D)  If RDC shall not notify Rafael that it is interested in the Venture as
          aforesaid following the Management Approval, then Rafael and/or Galram
          shall be at liberty to approach any third party, and to negotiate and
          consummate a respective agreement therewith. In such event RDC shall
          be subject to customary confidentiality undertakings with respect to
          the Business Plan and will not be entitled to make any use whatsoever
          of the data disclosed to it thereunder.

     (E)  If RDC notifies Rafael and/or Galram that it is interested in the
          Venture in accordance with the provisions of either sub-section (B) or
          (C) above, then the provisions of sub-sections 7.1.2 (B)-(F) shall
          apply, mutatis mutandis. In such event RDC shall reimburse Rafael
          and/or Galram for their reasonable direct costs and expenses to third
          parties incurred in connection with the preparation of the Business
          Plan."

5.   Amendment to Section 7.1.4. Subject to the provisions of Section 8 below,
     Section 7.1.4 of the Joint Venture Agreement is hereby replaced in its
     entirety with the following:

     "(A) In the event that Rafael and/or Galram are approached by a third party
          (the "Proposing Party") which proposes to cooperate with Rafael and/or
          Galram in the development and in the commercial exploitation in the
          non-military market of Other Technologies through a Vehicle, they
          shall give written notice of such proposal to RDC and provide RDC with
          a Business Plan prepared in accordance with the provisions of
          Sub-Section 7.1.3 (A) above.

     (B)  RDC shall then have the right to notify Rafael and/or Galram in
          writing within the next 30 days whether it is interested to acquire
          Rafael's and/or Galram's proposed participation in the Vehicle (the
          "Assignment").

     (C)  If RDC shall not notify Rafael that it is interested in the Venture as
          aforesaid, then Rafael Management shall be at liberty to approve the
          further development and research of, and/or the search for third-party
          partners for such Venture, including the Proposing Party (the
          "Management Approval"). In such event, Rafael shall so notify RDC in
          writing and RDC shall have the right to notify Rafael in writing
          within the next 30 days after receipt of a written notice regarding
          such Management Approval, that it is interested in the Venture.

     (D)  If RDC shall not notify Rafael and/or Galram that it is interested in
          the Venture as aforesaid following the Management Approval, then
          Rafael and/or Galram shall be at liberty to negotiate and consummate a
          respective agreement with the Proposing Party. In such event, RDC
          shall be subject to customary non-confidentiality undertakings with
          respect to the Business





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          Plan and will not be entitled to make any use whatsoever in the data
          disclosed to it thereunder.

     (E)  If RDC shall notify Rafael and/or Galram that it is interested in the
          Venture in accordance with the provisions of either sub-section (B) or
          (C) above, RDC shall conduct the negotiations with the Proposing
          Party, and a representative of Rafael and/or Galram shall be allowed
          to attend such negotiations. Upon execution and delivery by RDC and
          the Proposing Party of a term sheet or any other form of agreement
          concerning the Venture (the "Agreement"), RDC shall so notify Rafael.

          The provisions of Section 7.1.2 (B)-(F) shall apply, mutatis mutandis,
          with respect to any entity to be incorporated pursuant to the said
          Agreement between RDC and the Proposing Party (including, without
          limitation, Rafael's undertaking to grant the Other Technologies
          License to such NewCo). In addition, RDC shall reimburse Rafael and/or
          Galram for their reasonable direct costs and expenses to third
          parties, if any, incurred in connection with the preparation of the
          Business Plan.

     (F)  If an Agreement is not executed between RDC and the Proposing Party
          within 90 days as of RDC's notice to Rafael that it is interested in
          the Venture, then Rafael and/or Galram shall be at liberty to
          negotiate and consummate an agreement with such Proposing Party,
          provided however, that the terms and conditions thereunder are not
          less favorable to such Proposing Party than the terms and conditions
          earlier proposed by RDC. RDC shall be entitled to be notified of the
          consummation and of the relevant terms and conditions of such
          agreement, and shall be subject to similar non-disclosure undertaking
          as set under Sub-Section (D) above."

6.   Survival of Provisions.

     6.1. The provisions of sub-sections 7.1.1, 7.1.5 and 7.1.6, and all other
          provisions of the Joint Venture Agreement shall remain as set forth
          under the Joint Venture Agreement effective immediately prior to the
          execution hereof.

     6.2. Notwithstanding any of the foregoing, the provision of this Addendum
          shall not apply to the microelectronics project, known as the "TARASH"
          project.

7.   Management Services.

     7.1. During the term of this Addendum, as defined under Section 8 below,
          DEP shall provide or cause any entity wholly-owned by DEP or which
          wholly owns DEP to provide to any NewCo incorporated by RDC pursuant
          to the provisions of this Addendum (including without limitation,
          pursuant to any Venture with third parties, other than Rafael)
          management services (the "Services"), from time to time.

     7.2. In consideration for the Services, DEP shall be entitled to receive
          from RDC with respect to each such NewCo, irrespective of the amount
          or extent of





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          Services provided, subject to the consummation of an Exit with respect
          to such NewCo, a management fee as follows (the "Management Fee"):

          7.2.1. The Management Fee shall be calculated as 3.5% of the positive
               balance, if any, between (A) the value of the Exit Consideration,
               minus (B) US$50,000,000, provided however that in no event shall
               the Management Fee exceed the amount of US$2,310,000 with respect
               to any single NewCo.

          7.2.2. The payment of the Management Fee to DEP shall be in the same
               means as the payment of the Exit Consideration (for example, if
               the Exit Consideration shall be paid to RDC in stock or debt,
               then the Management Fee to be paid by RDC to DEP shall be in the
               same kind of stock or debt, etc.). Upon the written consent of
               RDC and DEP, the Management Fee payable pursuant to an IPO will
               be payable in securities, rather than cash.

          7.2.3. The Management Fee to DEP shall be payable immediately after
               the consummation of an Exit, except as set forth below:

               (i) If the Exit Consideration is received in connection with an
               IPO, the Management Fee will be payable only when RDC shall have
               actually sold shares of NewCo pursuant to such IPO. If RDC will
               elect to sell such shares of NewCo in several portions, it will
               be entitled to pay DEP only up to one third (1/3) of the
               consideration received pursuant to each such sale on the account
               of the Management Fee, until such Management Fee is paid in full.

               (ii) If the Exit Consideration is received in securities of
               another company which are not publicly traded, or are subject to
               any lock-up or similar restriction ("Restricted Securities"),
               then such Management Fee shall be payable to DEP only upon the
               earlier of the following: (A) such Restricted Securities will be
               sold in consideration for cash or asset or securities other than
               Restricted Securities, or (B) RDC shall have first sold such
               Restricted Securities pursuant to a public offering, or (C) the
               lock-up or similar restrictions applicable to such Restricted
               Securities shall have expired.

               For the avoidance of any doubt, the Management Fee shall be
               calculated according to the value of the original Exit
               Consideration and will not be affected from the deferred payment
               hereunder.

          7.2.4. RDC's undertaking hereunder to pay DEP the Management Fee for
               Services rendered during the term of this Addendum shall survive
               the termination hereof for a period of additional 24 months, with
               respect to each New Company to which DEP has provided such
               Services for an aggregate period of at least 24 months.





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8.   Term and Termination. This Addendum shall be effective as of the execution
     hereof and for a period of 3 (three) years thereafter (the "Original
     Term"), and shall be automatically renewed for additional 3 (three) year
     periods (each an "Additional Term") upon the termination of the Original
     Term and each Additional Term, respectively; all unless terminated by a
     written notice to be sent by either party to all other parties at least 6
     months prior to the end of the Original Term or any Additional Term,
     respectively.

     Upon the termination hereof according to the provisions of this Section 8,
     the provisions of the Joint Venture Agreement effective immediately prior
     to the execution hereof shall apply and shall remain in full force and
     effect. The provisions of Sections 9 and 10 hereof shall survive the
     termination of this Addendum.

9.   Assignment of Rights. The parties hereby agree and acknowledge that
     pursuant to the transformation of Rafael Armament Development Authority
     ("Rafael Authority") into an entity incorporated under the Israeli law
     under the name of Rafael Armament Development Authority Ltd., all of the
     rights and obligations of Rafael Authority under the Joint Venture
     Agreement have been assigned to Rafael on January 1, 2002, and Rafael
     hereby accepts and assumes all such rights and obligations and acknowledges
     the rights and obligations of the other parties under the Joint Venture
     Agreement, to the extent exist, including without limitations all rights
     and obligations of RDC; all with effect as of the date of the said
     assignment. Rafael represents and warrants that the said assignment has not
     and will not constitute a default under, or breach of any agreement or law
     or any other instrument to which Rafael is a party or by which it is bound,
     and does not require the consent of any person or entity.

10.  DEP Share Purchase. Rafael acknowledges that it is aware of the proposed
     purchase by Elron Electronics Industries Ltd. ("Elron") of all shares and
     capital notes held by Discount Investment Corporation Ltd ("DIC") in DEP,
     and of the proposed assignment to Elron of all the loans made by DIC to
     RDC, and agrees that such purchase and assignment shall not in any manner
     affect DEP's rights and obligations under the Joint Venture Agreement and
     this Addendum, provided however that the said purchase and assignment will
     not constitute a default under, or breach of any agreement or law or any
     other instrument to which either DEP, DIC or Elron are a party or by which
     they are bound, and will not require the consent of any person or entity
     (unless such consents shall be duly obtained).

                              [SIGNATURE PAGE NEXT]





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IN WITNESS HEREOF, the parties hereto have executed this amendment as of the
date first above written:

RAFAEL ARMAMENT                           DEP TECHNOLOGIES HOLDINGS
DEVELOPMENT AUTHORITY LTD.                LIMITED


By: /s/ Giora Shalgi  /s/ Michael Wainer  By: /s/Paul Weinberg  /s/ Doron Birger
    ------------------------------------      ----------------------------------


GALRAM TECHNOLOGIES
INDUSTRIES LTD.


By: /s/ Michael Ryce  /s/ Michael Wainer
    ------------------------------------


RDC RAFAEL DEVELOPMENT CORPORATION LTD.


By: /s/ Reuben Baron  /s/ Michael Ryce
    ------------------------------------

DIC Acknowledgement. DIC hereby acknowledges that this Addendum does not affect
in any manner whatsoever any obligation or liability of DIC, to the extent
applicable, under the Joint Venture Agreement and the Assignment of Rights dated
July 3, 1993, between DIC, PEC Israel Economic Corporation and DEP.

DISCOUNT INVESTMENT
CORPORATION LTD.


By: /s/ Michel Dahan  /s/ Raanan Cohen
    ----------------------------------