<PAGE>

                                                                     Exhibit 4.5

                         SHAREHOLDERS' RIGHTS AGREEMENT
                         ------------------------------

     THIS SHAREHOLDERS RIGHTS AGREEMENT (this "Agreement") made as of the 18th
day of January, 2001, by and among:

 STOREAGE NETWORKING TECHNOLOGIES LTD., a private company organized under the
 laws of the State of Israel, with offices at Gutwirth Science Center, Building
 640, Technion City, Haifa, Israel (the "Company");

 -and-

 IIS INTELLIGENT INFORMATION SYSTEMS LTD., a private company that is a wholly-
 owned subsidiary of IIS INTELLIGENT INFORMATION SYSTEMS LTD. organized under
 the laws of the State of Israel, with offices at Gutwirth Science Center,
 Building 640, Technion City, Haifa, Israel ("IIS");

 -and-

 NELSON NAHUM, of 36a Shimkin Street, Haifa (the "Key Employee");

 -and-

 OPHIRTECH LTD., a company organized under the laws of the State of Israel, with
 offices at 8 Shderot Shaul Hamelech, Tel Aviv, Israel ("Ophir");

 -and-

 KOONRAS TECHNOLOGIES LTD., a company organized under the laws of the State of
 Israel, with offices at 21 Ha'arba'ah Street, Tel Aviv, Israel ("Koonras");

 -and-

GENESIS PARTNERS II L.D.C., a Limited Duration Company organized under the laws
of the State of Cayman Islands ("Genesis Partners") and GENESIS PARTNERS II
(Israel) L.P., a limited partnership organized under the laws of the Cayman
Islands ("Genesis Partners (Israel)"), with offices at Top Tower, 50 Dizengoff
St., Tel Aviv, Israel (Genesis Partners and Genesis Partners (Israel) shall be
referred to collectively as "Genesis");

-and-

CISCO SYSTEMS, INC., a public company incorporated under the laws of the state
of California ("Cisco"), with office at 170 West Tasman Drive, San Jose,
California, 95134-17066,   U.S.A.

                                      -1-
<PAGE>

-and-

MORGAN KEEGAN & COMPANY, INC., MORGAN KEEGAN OPPORTUNITY FUND, L.P. and MORGAN
KEEGAN EMPLOYEE INVESTMENT FUND, L.P., corporations incorporated under the laws
of the state of Delaware (collectively, "Morgan"), with offices at 50 North
Front Street, Memphis, Tennessee  38103, U.S.A.

-and-

The other investors listed in Annex 1 attached hereto (the "Other Investors").
                              -------

(Ophir, Koonras, Genesis and IIS shall be referred, collectively, as the
"Initial Purchasers"; Cisco, Morgan and the Other Investors shall be referred
to, collectively, as the "Additional Purchasers"; each of the Initial Purchasers
and the Additional Purchasers shall be referred to individually as a "Purchaser"
and collectively as "Purchasers")

Each of the above mentioned parties to this Agreement shall be referred to as a
"Party" and all of such parties as the "Parties".

                              W I T N E S S E T H:

     WHEREAS, the Initial Purchasers purchased 4,139,271 Series B Convertible
Preferred Shares of the Company (the "Preferred B Shares") in accordance with
the terms of that certain Share Purchase Agreement, dated December 13, 2000, as
amended on January 18, 2001 (the "Initial SPA"); and

     WHEREAS, the Additional Purchasers are subscribing for additional Preferred
B Shares in accordance with the terms of the Share Purchase Agreement, dated
January 18, 2001 (the "Additional SPA")

(the Initial SPA and the Additional SPA shall be referred to, collectively, as
the "Share Purchase Agreement"); and

     WHEREAS,  the Parties wish to terminate the Shareholders Rights Agreement
entered into on October 21, 1999 and the Shareholders Rights Agreement entered
into on December 13, 2000, among certain shareholders of the Company and the
Company (collectively, the "Previous SRA") so that, all the provisions of the
Previous SRA would have no further force or effect (as of the date of this
Agreement), and as of the date of this Agreement would be replaced by all the
provisions of this Agreement as detailed below; and

     WHEREAS, in order to induce the Company and its shareholders to approve the
issuance of the Preferred B Shares to the Additional Purchasers and to induce
the Additional Purchasers to invest funds in the Company pursuant to the Share
Purchase Agreement, the Parties hereby agree that certain rights shall be
granted to the

                                      -2-
<PAGE>

Company's shareholders as set forth herein;

NOW, THEREFORE, in consideration of the mutual premises and covenants set forth
herein, the Parties hereby agree as follows:


1.   Affirmative Covenants
     ---------------------

     1.1. Delivery of Financial Statements. The Company shall deliver to (a)
          --------------------------------
          each holder of Preferred B Shares and each holder of Series A
          Convertible Preferred Shares (the "Preferred A Shares") and (b) each
          holder of Ordinary Shares for so long as such holder owns more than 5%
          of the outstanding share capital in the Company on a fully diluted
          basis (in each case in this Section 1 an "Entitled Shareholder"):

          1.1.1. As soon as practicable, but in any event within fifty (50) days
               after the end of each fiscal year of the Company, audited
               consolidated financial statements of the Company and of the
               Company's subsidiary - StoreAge Networking Technologies, Inc.
               (the "Subsidiary"), including the balance sheet as of the end of
               such year and statements of income and cash flow of the Company
               for such year, setting forth in each case in comparative form the
               figures for the previous fiscal year, all in reasonable detail,
               United States dollar denominated, prepared in accordance with US
               generally accepted accounting principles ("GAAP"), audited by a
               firm of Independent Certified Public Accountants who are members
               of the Israeli Institute of Certified Public Accountants and are
               affiliated with one of the "Big Five" accounting firms (an
               "Israeli CPA"), accompanied by an opinion of such firm which
               opinion shall state that such balance sheet and statements of
               income and cash flow have been prepared in accordance with GAAP
               consistently applied, and present fairly and accurately the
               financial position of the Company as of their date, and that the
               audit by such accountants in connection with such financial
               statements has been made in accordance with US generally accepted
               auditing standards, and in a form suitable for such Entitled
               Shareholder to conform with the reporting requirements which
               apply to a publicly traded company; and

          1.1.2. As soon as practicable, but in any event within forty five (45)
               days after the end of the first, second and third quarter in each
               year, the unaudited, but reviewed, consolidated financial
               statements of the Company and of the Subsidiary, including the
               balance sheet as at the end of each such period and unaudited
               statements of income and cash flow of the Company for such
               period, setting forth in each case in comparative form the
               figures for the corresponding period of the previous fiscal year,

                                      -3-
<PAGE>

                 all in reasonable detail, United States dollar-denominated,
                 certified, by the chief financial officer of the Company (the
                 "CFO"), reviewed by an Israeli CPA and in a form suitable for
                 such Entitled Shareholder to conform with the reporting
                 requirements which apply to a publicly traded company. The
                 CFO's certificate shall state that such financial statements
                 were prepared in accordance with GAAP consistently applied.

          1.1.3. As soon as practicable, but in any event within fifteen (15)
                 days after the end of each calendar month, the Company shall
                 deliver to the Entitled Shareholders monthly management reports
                 containing information of the business of the Company for such
                 month in the form acceptable to the Company and the Purchasers
                 and any such other reports as shall from time to time be
                 directed by the Board of Directors.

          1.1.4. At least forty five (45) days prior to the first day of each
                 fiscal year, the Company shall prepare and present to the
                 Entitled Shareholders detailed financial and operational
                 projections for the year and a financial summary projection,
                 broken down into yearly and quarterly financial forecasts and
                 other such projections as directed by the Purchasers.

          1.1.5. Any other information as may be reasonably requested by the
                 Entitled Shareholders, including, inter alia, information
                 required for the purpose of preparing or filing a prospectus
                 and/or any other filing pursuant to the securities authorities
                 and/or any other information required under any law. It is
                 agreed that in such events the Entitled Shareholder may be
                 entitled to transfer that information, if necessary for the
                 purposes mentioned above, to any of its affiliates or
                 subsidiaries, provided that the Entitled Shareholder shall
                 reimburse the Company for any and all expenditure which is
                 borne by the Company in connection with obtaining or providing
                 such information, if information of that kind in not obtained
                 by the Company in the ordinary course of business.

          1.1.6. All of the information provided under this Section 1.1 shall be
                 presented to the Purchasers in English.

    1.2. Additional Information. Until a firm commitment underwritten public
         ----------------------
         offering managed by an internationally recognized underwriter of
         Ordinary Shares of the Company yielding at least $30 million (Thirty
         Million US Dollars) net to the Company and which reflects a pre-
         offering valuation of the Company of more than U.S. $150,000,000 (One
         Hundred Fifty Million US Dollars) ("Qualified IPO"), the Company will
         permit the authorized representative of each Entitled Shareholder at
         such Entitled Shareholder's expense, full and free access, at
         reasonable times and upon reasonable notice, to any of the properties
         of the Company, including its books and records, and to discuss its
         affairs, finances and accounts with the Company's officers


                                      -4-
<PAGE>

               and auditors. Without derogating from the foregoing, should the
               Company receive written notification from a Party that it does
               not desire to receive any further Confidential Information (as
               defined herein) from the Company, as provided in Section 12.2
               below, such Party shall not be entitled to any additional
               information pursuant to this Section 1.2.

          1.3. Delivery of Information to Directors. In addition, the Company
               ------------------------------------
               will deliver to each of the Preferred Directors (as defined
               below), to the Cisco and Koonras Observers and to the Directors
               appointed by IIS the following information: (a) promptly
               following the occurrence of any Event, as defined hereinafter
               likely to have a material adverse effect upon the Company or its
               business, a written summary of such Event and its foreseeable
               implications. "Event" - includes, without limitation: (i) any
               material change in the information that was known to the Company
               which may have a material adverse affect on the Company; (ii)
               occurrence of new Events that render the information supplied to
               the Entitled Shareholders untrue or incomplete in any material
               way; or (iii) occurrence of any technological impediment which
               may cause a material adverse change in the current or prospective
               business of the Company; and (b) with reasonable promptness, such
               other information and data with respect to the Company, as an
               Entitled Shareholder may from time to time reasonably request.
               This Section 1.3 shall not derogate from any rights which any
               Entitled Shareholder or the directors designated by any of them
               may be entitled to under applicable law.

          1.4. Accounting. The Company will maintain and cause each of its
               ----------
               subsidiaries to maintain adequate records and books of accounts,
               and a system of accounting established and administered in
               accordance with GAAP consistently applied, and will reserve on
               its books and cause each of its operating subsidiaries to reserve
               on its books all such proper reserves as shall be required by
               GAAP.

          1.5. Insurance. The Company will maintain and shall pay all premiums
               ---------
               and maintain in full force and effect, employers liability, fire
               and casualty insurance policies with coverage sufficient in
               amount to allow it to replace its material properties, which
               might be damaged or destroyed. In addition to the foregoing, at
               the direction of the Board of Directors, the Company shall obtain
               from financially sound and reputable insurers a product liability
               insurance policy as is necessary for the Company to conduct its
               business. The Company shall obtain a Directors and Officers
               liability insurance policy in an amount as shall be determined by
               the Company's Board of Directors, within such time as resolved by
               the Board of Directors. All the above insurance shall be of such
               type and in such amount customary for companies similarly
               situated.

          1.6. Confidentiality and Non-Competition Agreements. Unless otherwise
               ----------------------------------------------
               specifically approved by the Board of Directors, the Company will
               not employ or otherwise

                                      -5-
<PAGE>

               contract with, or continue to employ or otherwise contract with,
               any person who will have access to confidential information with
               respect to the Company and its operations unless such person has
               executed and delivered a Confidentiality and Non-Competition
               Agreement in such form approved by the Company's Board of
               Directors.

          1.7. Protection of Intellectual Property. The Company undertakes to
               -----------------------------------
               use its best efforts to diligently protect any future development
               of the Company and of its subsidiaries by, inter alia, filing for
               patents in the United States and other jurisdictions, conducting
               searches to verify the status of the intellectual property, and
               taking such customary measures, in any such case, to protect the
               secrecy and value of the Company's and its subsidiaries
               intellectual property. The Company shall avoid and shall cause
               its subsidiaries to avoid an infringement of intellectual
               property rights of others of which it is aware, including by the
               design and use of non-infringing products, processes or the like.

          1.8. Employee Stock Option Plan. All options issued after the Closing
               --------------------------
               of the Share Purchase Agreement to employees, officers and
               consultants of the Company shall be in accordance with the
               Company's current employee stock option plan or any other
               employee stock option plan adopted by the Board of Directors.

          1.9. Use of Proceeds. The Company shall use the net cash proceeds from
               ---------------
               the sale of the Preferred B Shares in the manner set forth in
               Section 7 of the Share Purchase Agreement.

          1.10. Internal Auditor. Until an IPO, as long as Koonras holds more
                ----------------
               than 20% of the issued and outstanding share capital of the
               Company (on an as-converted basis), then, upon the demand of
               Koonras, the Company's Board of Directors shall appoint an
               internal auditor (as such term defined in the Companies Law -
               1999) to the Company.

          1.11. Compensation. The Company shall not pay and shall cause its
                ------------
               subsidiaries to not pay to its directors, officers and key
               employees management compensation in excess of that compensation
               customarily paid to management in companies in similar business
               without the consent of the Board or Directors.

          1.12. Reserved Conversion Shares. The Company shall at all time
                --------------------------
               reserve and keep available out of its authorized but unissued
               shares of Ordinary Shares, for the purpose of effecting the
               conversion of the Preferred B Shares and the Preferred A Shares
               and otherwise complying with the terms of this Agreement and the
               terms of the Share Purchase Agreement, such number of its duly
               authorized shares of Ordinary Shares as shall be sufficient to
               effect the conversion of the Preferred B Shares from time to time
               outstanding or otherwise comply with the terms of this Agreement
               and the terms of the Share Purchase Agreement.

          1.13. Restrictive Agreements Forbidden. The Company shall not become a
                --------------------------------
               party to any agreement, which by its terms restricts the
               Company's

                                      -6-
<PAGE>

               performance of this Agreement, the Share Purchase Agreement and
               any and all agreement and instruments entered by the parties
               hereunder and thereunder, or the Amended Articles.

          1.14. Compliance with Laws. The Company shall comply, and cause its
                --------------------
               subsidiaries to comply, with all applicable laws, rules,
               regulations and orders, noncompliance with which could materially
               and adversely affect their respective business or condition,
               financial or otherwise.

          1.15. IIS-StoreAge Agreement. The Company and IIS agree that, for such
                ----------------------
               time as Cisco (together with any Permitted Transferee of Cisco,
               as defined in the Amended Articles) holds shares in the Company
               constituting 5% or more of the issued and outstanding share
               capital of the Company, the Company and IIS shall not amend the
               agreement entered between the Company and IIS (in the form
               attached to the Share Purchase Agreement as Exhibit R(1) without
                                                           ------------
               the prior written consent of Cisco.

2.      Negative Covenants
        ------------------

        2.1.    Prior to such time as the consummation of a Qualifying IPO the
                following actions and resolutions shall not be taken by the
                Company (and the Company shall not cause any subsidiary thereof
                to take such action) without first obtaining the written consent
                of at least two of the Preferred Directors, as defined below (in
                the case of actions of the Board of Directors), or the written
                consent of the holders of at least a 70% of the Preferred A
                Shares and Preferred B Shares then issued and outstanding
                collectively (in the case of actions of the shareholders):

                2.1.1.  voluntary liquidation, winding up, reorganization,
                        merger or consolidation with or into any corporation or
                        entity, or sale, assignment, lease, or other disposition
                        of all or substantially all of the Company's assets;

                2.1.2.  the declaration or payment of any dividend (whether in
                        cash or shares) or any other distribution of cash or
                        other assets;

                2.1.3.  any amendment to or modification of the Company's
                        Articles or Memorandum of Association;

                2.1.4.  Without limitation to Section 2.2 below, any increase in
                        or modification of the Company's authorized share
                        capital, and the issuance of any securities of the
                        Company (including but not limited to option, warrants
                        etc.) at an exercise or price per share which is lower
                        than US$ 3.28695 (purchase price per each Preferred B
                        Share), subject to recapitalization adjustments;

                2.1.5.  any material change in the nature or character of the
                        business as currently conducted or contemplated to be
                        conducted by the Company;

                2.1.6.  any transaction, agreement or arrangement, which is not
                        in the

                                      -7-
<PAGE>

                        ordinary course of business of the Company relating to
                        the Company's intellectual property;

                2.1.7.  the terms of an IPO;

                2.1.8.  the purchase of any securities or substantially all of
                        the assets, of any person or entity;

                2.1.9.  entering into any transaction with (i) any shareholder
                        or director of the Company or any of their respective
                        affiliates, shareholders, partners, directors or
                        officers or (ii) with any officer of the Company;

                2.1.10. any loan granted to the Company exceeding the amount of
                        US$100,000, the imposition of liens and/or charges on
                        any of the Company's assets and any grant of guarantees
                        to or by the Company;

                2.1.11. any loan granted by the Company exceeding the aggregate
                        amount of US$50,000;

                2.1.12. designation or discharge of the chief executive officer
                        and other executive officers of the Company;

                2.1.13. approval of the annual budget and working plan and any
                        expenditure which deviates therefrom;

                2.1.14. redemption on the Company's shares;

                2.1.15. call on the Company's shares;

                2.1.16. any amendment to the Company's Stock Option Plan or the
                        adoption of any compensation or stock plan; and

                2.1.17. entering into any engagement and/or agreement and/or
                        commitment and/or undertaking with Morgan Keegan &
                        Company, Inc.

        2.2.    Prior to the consummation of a Qualifying IPO, the following
                actions of the Company shall require the affirmative vote of the
                holders of Preferred A Shares or Preferred B Shares (in each
                case, each voting as a separate class), as the case may be:

                2.2.1.  The authorization, creation and/or issuance of
                        securities of the Company with rights same, pari passu
                        or superior to the rights conferred upon the holders of
                        Preferred A Shares or Preferred B Shares, as the case
                        may be; and

                2.2.2.  Any action which would have the effect of amending or
                        affecting the rights, preferences and privileges of the
                        Preferred A Shares or Preferred B Shares, as the case
                        may be.

3.      The Company's Board of Directors
        --------------------------------

        3.1.    Prior to the consummation of a Qualifying IPO, the Board of
                Directors of the Company and the board of each subsidiary
                thereof shall consist

                                      -8-
<PAGE>

                of not more than seven (7) directors, appointed as follows:

                3.1.1.  The majority of holders of Preferred A Shares shall
                        collectively be entitled to appoint one (1) member to
                        the Company's Board of Directors (the "Preferred A
                        Director");

                3.1.2.  The majority of holders of Preferred B Shares shall be
                        entitled to appoint two (2) members to the Company's
                        Board of Directors (the "Preferred B Directors");
                        (the Preferred A Director and the Preferred B Directors
                        shall be referred to herein, collectively, as the
                        "Preferred Directors")

                3.1.3.  The holder(s) of the majority of the Ordinary Shares
                        shall be entitled to appoint two (2) members to the
                        Company's Board of Directors.

                3.1.4.  The Company's Chief Executive Officer shall serve as a
                        member of the Board of Directors.

                3.1.5.  An additional member (one), who shall be an industry
                        expert, shall be appointed to the Board of Directors by
                        the other members of the Board.

        3.2.    For so long as Koonras holds 5% or more of the issued and
                outstanding share capital of the Company, it shall be entitled
                to appoint 1 non-voting observer to the Board of Directors of
                the Company.

        3.3.    For so long as Cisco holds 5% or more of the issued and
                outstanding share capital of the Company, it shall be entitled
                to appoint 1 non-voting observer to the Board of Directors of
                the Company and a member to the technical advisory sub-committee
                of the Board of Directors of the Company.

4.      Conversion and Anti-Dilution
        ----------------------------

        4.1.    The holders of Preferred Shares shall be entitled to broad-based
                anti- dilution protection. The terms of such anti-dilution
                protection are as described in Exhibit B.
                                               ---------

        4.2.    The Preferred A and B Shares are convertible into Ordinary
                Shares of the Company. The Conversion terms are as described in
                Exhibit B.
                ---------

5.      Liquidation Preference
        ----------------------
        The Preferred B shares will be senior to all other equity securities of
        the Company in the event of actual or deemed liquidation of the Company,
        bankruptcy or winding up of the Company, or sale of all or substantially
        all of the assets of the Company for cash or assets. The terms of the
        liquidation preference are as described in Exhibit B.
                                                   ---------

6.      Dividends
        --------

        The holders of Preferred B Shares and the holders of Preferred A Shares
        shall have a dividend preference. The terms of such preference are as
        described in Exhibit B.
                     ---------

                                      -9-
<PAGE>

7.      Key Employee No Sale
        --------------------

        7.1.    Until the earlier of: (i) a Qualifying IPO, (ii) Deemed
                Liquidation, where the shareholders of the Company prior to the
                merger do not hold more than 50% of the surviving entity, or
                (iii) sale of all or substantially all of the Company's assets
                (the "Restrictive Period") Key Employee shall not sell,
                transfer, assign, pledge or otherwise dispose of any shares of
                the Company held by him (each a "Transfer"), except to Permitted
                Transferees (as such term is defined in the Amended Articles),
                provided that such Permitted Transferee agrees in writing to be
                bound by the provisions of this Agreement and the Amended
                Articles including the No-Sale provision set forth in this
                Subsection 7.1, and except as provided pursuant to Section 7.2
                herein, as if such Permitted Transferees were Key Employee.

        7.2.    Notwithstanding the foregoing, during the Restrictive Period Key
                Employee shall be entitled to sell, in one or more transactions,
                shares of the Company owned by him not exceeding in the
                aggregate $200,000 (Two Hundred Thousand US Dollars) in value.

        7.3.    In the event that the Key Employee or any of his Permitted
                Transferees should sell any shares in contravention of this
                Agreement (a "Prohibited Transfer"), the Purchasers may proceed
                to protect and enforce their rights by suit in equity or by
                action at law, whether for the specific performance of any term
                contained in this Agreement or for an injunction against the
                breach of any such term or in furtherance of the exercise of any
                power granted in this Agreement, or to enforce any other legal
                or equitable right of the holders of Preferred A and B Shares or
                to take one or more of such actions.

8.      Exit
        ----

        The Parties shall have the right to transfer their respective shares in
        the Company, together with the right of first refusal and tag-along
        rights. The terms of such right to transfer shares are as described in
        the Amended Articles attached hereto as Exhibit B.
                                                ---------

9.      Bring-Along
        -----------

        The Parties agree that "bring-along" provisions with respect to sale of
        shares of the Company will be as set forth in Exhibit B.
                                                      ---------

10.     Preemptive Rights
        -----------------

        The Parties shall have preemptive rights in the event of issue of any
        additional shares of the Company. The terms of such preemption right are
        as described in Exhibit B.
                        ---------

11.     Right of First Refusal
        ----------------------

        The Parties shall have right of first refusal to purchase any shares
        of the

                                      -10-
<PAGE>

        Company offered for sale by and shareholder of the Company. The
        terms of such right are as described in Exhibit B.
                                                ---------

12.     Confidentiality
        ---------------

        12.1.   The Parties hereby undertake to maintain in strict
                confidentiality all trade, business, technical or other
                information regarding the Company, its affiliated entities and
                their business affairs including, without limitation, all
                marketing, sales, technical and business know-how, intellectual
                property, trade secrets, identity and requirements of customers
                and prospective customers, the Company's methods of doing
                business and any and all other information relating to the
                operation of the Company (collectively, the "Confidential
                Information"). The Parties shall at no time disclose any
                Confidential Information to any person, firm, or entity, and for
                any purpose, without the prior written consent of the Company
                and shall use their best efforts to cause their authorized
                representatives not to disclose such information without the
                prior written consent of the Company.

        12.2.   Confidential Information shall not include information that (i)
                is or becomes part of the public domain other than as a result
                of breach of this Agreement, (ii) becomes available to the
                Parties on a non-confidential basis from a source other than the
                Company, provided that the source is not bound with respect to
                that information by a confidentiality agreement with the Company
                or is otherwise prohibited from transmitting that information by
                a contractual legal or other obligation, (iii) have been in the
                possession or known to the parties prior to disclosure of the
                information by the Company, (iv) have been developed by or for
                them or their related entities without use of the Confidential
                Information, (v) becomes available to the Parties by wholly
                lawful inspection or analysis of products offered for sale,
                provided, however, that no Party shall be entitled to use or
                disclose such Confidential Information except in connection with
                its investment in the Company and in no event shall use it in a
                way that may materially adversely affect the Company's business,
                unless expressly authorized by the Company in writing, or (vi)
                is transmitted by a Party after receiving written notification
                from the other Party that it does not desire to receive any
                further Confidential Information. To avoid any doubt it is
                hereby clarified that the foregoing exclusions shall not be
                construed to exclude information pertaining to any and all
                intellectual property assigned and/or transferred by IIS to the
                Company. Notwithstanding the foregoing, each Party may disclose
                information with respect to the Company, which it is required to
                disclose pursuant to judicial action or other governmental
                agency action or applicable law or regulation. In the event
                either Party becomes legally compelled to disclose any
                Confidential Information, each Party shall provide the other
                with prompt notice. Both Parties shall cooperate with each other
                to the fullest extent possible so that the relevant Party may
                seek a protective order or other appropriate remedy, at its own
                expense.

                                      -11-
<PAGE>

        12.3.   Subject to the Section 10.11 (Public Announcements) of the Share
                                              ----------------------------------
                Purchase Agreement, all institutional investors in the Company
                ------------------
                may, without first obtaining such written consent, make general
                statements, not containing Confidential Information or technical
                information, regarding the nature and progress of the Company's
                business, and may provide summary information regarding the
                Company's financial information in its reports to its respective
                shareholders or limited partners and may, if required by law,
                annex to such reports the full financial information to be
                provided hereunder by the Company.

13.     Miscellaneous
        -------------

        13.1.   Termination of the Previous SRA. By entering into this
                -------------------------------
                Agreement, the shareholders of the Company hereby terminate the
                Previous SRA as of the date of this Agreement, and as of the
                date of this Agreement all the rights and privileges granted to
                either party by virtue of such Agreement shall become null and
                void.

        13.2.   Further Assurances. Each of the Parties hereto shall perform
                ------------------
                such further acts and execute such further documents as may
                reasonably be necessary to carry out and give full effect to the
                provisions of this Agreement and the intentions of the Parties
                as reflected hereby.

        13.3.   Governing Law; Jurisdiction. This Agreement shall be governed by
                ---------------------------
                and construed exclusively according to the laws of the State of
                Israel, without regard to the conflict of laws provisions
                thereof. Any dispute arising under or in relation to this
                Agreement shall be resolved exclusively in the competent courts
                for the Tel Aviv-Jaffa district, and each of the Parties hereby
                submits irrevocably to the jurisdiction of such court.

        13.4.   Successors and Assigns. Except as otherwise expressly limited
                ----------------------
                herein, this Agreement shall be binding upon and inure to the
                benefit of and be enforceable by the Purchasers and the Company
                and their respective successors and assigns. None of the rights,
                privileges, or obligations set forth in, arising under, or
                created by this Agreement may be assigned or transferred without
                the prior consent in writing of each Party to this Agreement,
                with the exception of (a) assignments and transfers from a
                Purchaser to any other entity which controls, is controlled by
                or is under common control with, such Purchaser, (b) assignments
                and transfers to a Purchaser's limited partners and to
                affiliated limited partnerships managed by the same management
                company or managing general partner or by an entity which
                controls, is controlled by, or is under common control with,
                such management company or managing general partner, (c)
                assignments and transfers to any investment fund or trust or
                partnership controlled or managed or advised or promoted by a
                Purchaser and (d) assignment and transfer from the Company to a
                company which has succeeded to substantially all of the business
                and assets of the Company in compliance with this Agreement and
                has assumed in writing its obligations under this Agreement.

                                      -12-
<PAGE>

        13.5.   Entire Agreement; Amendment and Waiver. Subject to Section 13.2,
                --------------------------------------
                this Agreement, the Exhibits hereto, the Share Purchase
                Agreement and the schedules thereto, the Registration Agreement
                and the schedules thereto, the Warrant and the Amended Articles
                constitute the full and entire understanding and agreement
                between the Parties with regard to the subject matters hereof
                and thereof, and as of the date hereof, supersedes all other
                agreements between or among any of the parties with respect to
                the subject matter hereof, including the Previous SRA (but
                excluding the Share Purchase Agreement executed on October 21,
                1999). Any term of this Agreement may be amended, waived or
                discharged (either prospectively or retroactively and either
                generally or in a particular instance), by a written instrument
                signed by all the Parties to this Agreement.

        13.6.   Notices, etc. All notices and other communications required or
                -------------
                permitted hereunder to be given to a party to this Agreement
                shall be in writing and shall be telecopied or mailed by
                registered or certified mail, postage prepaid, or sent by e-mail
                (provided that telephone confirmation of receipt is provided) or
                otherwise delivered by hand or by messenger, addressed to such
                party's address as set forth below or at such other address as
                the party shall have furnished to each other party in writing in
                accordance with this provision:

<TABLE>
<S>                                             <C>
                If to the Company:               StoreAge Networking Technologies Ltd.
                                                 Gutwirth Science Center, Building 640,
                                                 Technion City, Haifa, Israel
                                                 Fax: +972-4-8329040
                                                 Attn: Eli Shapira, CEO
                                                 E-mail:  Eshapira@store-age.com

                With a copy (which will not      Kleinhendler & Halevy
                 constitute notice) to:          30 Kalisher Street
                                                 Tel-Aviv 65257
                                                 Fax:  972-3-5107528
                                                 Attention:  Nitzan Hirsch-Falk
                                                 E-Mail:  nitzan@khlaw.co.il

                If to IIS:                       IIS Intelligent Information Systems
                                                 Investments (1994) Ltd.
                                                 Gutwirth Science Center, Building 640,
                                                 Technion City, Haifa, Israel
                                                 Fax: +972-4-8329040
                                                 Attn: Robi Hartman
                                                 E-mail:  Rhartman@westendgroup.com
                If to Key Employee:              Nelson Nahum
                                                 36a Shimkin Street,
                                                 Haifa, Israel
                                                 Fax: ___________________

</TABLE>

                                      -13-
<PAGE>

<TABLE>
          <S>                                     <C>
              If to Ophir:                          3 Danieal Frish St., 13th Floor
                                                    Tel Aviv, Israel
                                                    Fax: +972-3-6095851
                                                    E-mail: yrmo@netvision.net.il
                                                    Attn: Yirmi Kaplan
              With a copy (which will not           Baratz, Gilat, Bar-Nathan & Co., Law
               constitute notice) to:               Offices
                                                    8 Shaul Hamelech Blvd.
                                                    Tel Aviv 64733 Israel
                                                    Fax: 972-3-696-0986
                                                    E-mail:  lori@bgb-law.co.il
                                                    Attn: Lori Almouli-Confino, Adv.
              If to Koonras:                        21 Ha'arba'ah Street, Tel Aviv, Israel
                                                    Fax:  972-3-6957511
                                                    E-mail:  ashachar@poalim-investments.co.il
                                                    Attn: Avi Shahar
              With a copy (which will not           Baratz, Gilat, Bar-Nathan & Co., Law
               constitute notice) to:               Offices
                                                    8 Shaul Hamelech Blvd.
                                                    Tel Aviv 64733 Israel
                                                    Fax: 972-3-696-0986
                                                    E-mail:  lori@bgb-law.co.il
                                                    Attn: Lori Almouli-Confino, Adv.
              If to Genesis:                        50 Top Tower, Tel Aviv, Israel
                                                    Fax:  972-3-5262696
                                                    E-mail: eyal@genesispartners.co.il
                                                    Attn: Eyal Kishon
              With a copy (which will not           Baratz, Gilat, Bar-Nathan & Co., Law
               constitute notice) to:               Offices
                                                    8 Shaul Hamelech Blvd.
                                                    Tel Aviv 64733 Israel
                                                    Fax: 972-3-696-0986
                                                    E-mail:  lori@bgb-law.co.il
                                                    Attn: Lori Almouli-Confino, Adv.
              If to Morgan Keegan                   Morgan Keegan & Company, Inc.
                                                    50 North Front Street
                                                    Memphis, TN  38103, U.S.A.
                                                    Fax:001-(901)-579-4979
                                                    E-mail: Bill.Ryan@morgankeegan.com
                                                    Attn:  William D. Ryan
</TABLE>

                                      -14-
<PAGE>

<TABLE>
<S>                                     <C>
        If to Cisco Systems, Inc.               170 West Tasman Drive
                                                San Jose, California, 95134-17066
                                                U.S.A.
                                                Attn: Senior Vice President, Legal and
                                                Government Affairs
                                                Fax: 001-(408)-5265925
        With a copy (which will not             Zellermayer, Pelossof and Co., Adv.
         constitute notice) to:                 Rubinstein House, 20 Lincoln St.
                                                Tel Aviv, Israel
                                                Attn: Guy Even Ezra, Adv.
                                                Fax: 972-3-6255500


        If to the Other Investors               To their respective addresses set forth in
                                                Annex 1
</TABLE>

        or such other address with respect to a party as such party shall notify
        each other party in writing as above provided. Any notice sent in
        accordance with this Section shall be effective (i) if mailed, five (5)
        business days after mailing, (ii) if sent by messenger, upon delivery,
        and (iii) if sent via telecopier, upon transmission and electronic
        confirmation of receipt or (if transmitted and received on a
        non-business day) on the first business day following transmission and
        electronic confirmation of receipt.

13.7.   Delays or Omissions. No delay or omission to exercise any right, power,
        -------------------
        or remedy accruing to any party upon any breach or default under this
        Agreement, shall be deemed a waiver of any other breach or default
        theretofore or thereafter occurring. Any waiver, permit, consent or
        approval of any kind or character on the part of any party of any breach
        or default under this Agreement, or any waiver on the part of any party
        of any provisions or conditions of this Agreement, must be in writing
        and shall be effective only to the extent specifically set forth in such
        writing. All remedies, either under this Agreement or by law or
        otherwise afforded to any of the Parties, shall be cumulative and not
        alternative.

13.8.   Severability. If any provision of this Agreement is held by a court of
        ------------
        competent jurisdiction to be unenforceable under applicable law, then
        such provision shall be excluded from this Agreement and the remainder
        of this Agreement shall be interpreted as if such provision were so
        excluded and shall be enforceable in accordance with its terms;
        provided, however, that in such event this Agreement shall be
        interpreted so as to give effect, to the greatest extent consistent with
        and permitted by applicable law, to the meaning and intention of the
        excluded provision as determined by such court of competent
        jurisdiction.

                                      -15-
<PAGE>

13.9.   Construction. All capitalized terms not defined herein shall have the
        ------------
        meaning ascribed to such term in the Share Purchase Agreement.

13.10.  Counterparts. This Agreement may be executed in any number of
        ------------
        counterparts, each of which shall be deemed an original and enforceable
        against the Parties actually executing such counterpart, and all of
        which together shall constitute one and the same instrument. Signatures
        appearing on a faxed page shall be deemed original signatures and shall
        be enforceable against the Parties transmitting such signature pages by
        facsimile.

13.11.  Titles, Subtitles, Preamble and Schedules. The titles and subtitles used
        -----------------------------------------
        in this Agreement are used for convenience only and are not to be
        considered in construing or interpreting this Agreement. The preamble
        and Schedules form an integral and inseparable part of this Agreement.

                  [REMAINING OF PAGE INTENTIONALLY LEFT BLANK]

                                      -16-
<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed on the date herein
above set forth:



_________________________            ____________________
STOREAGE NETWORKING                     OPHIRTECH LTD.
TECHNOLOGIES LTD.


______________________________       ______________________________
IIS INTELLIGENT INFORMATION                  KOONRAS TECHNOLOGIES LTD.
SYSTEMS LTD.


_________________________________    ___________________________
GENESIS PARTNERS II L.D.C                    CISCO SYSTEMS, INC.


_________________________________    _______________________
GENESIS PARTNERS II (ISRAEL) L.P.            NELSON NAHUM


__________________________________    _______________________________
MORGAN KEEGAN & COMPANY, INC.          MORGAN KEEGAN OPPORTUNITY
                                         FUND, L.P.

___________________________________________________
MORGAN KEEGAN EMPLOYEE INVESTMENT FUND, LP


___________________________________     ___________________________
THE CHALLENGE FUND-ETGAR II L.P.

                                      -17-