---

---

Exhibit 4.2

May 24, 2005

LETTER OF AGREEMENT (LOA)Between Cimatron Ltd., Microsystem Srl 
and all the Shareholders of Microsystem Srl

Replacing any Previous Memorandum and Other
Correspondence

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | This Letter
  of Agreement (this LOA) is
  made as of the 9th day of May 2005, by and among Microsystem Srl,
  an Italian corporation (Microsystem
  or the Company), Cimatron Ltd.
  an Israeli company (or any of its affiliates) (Cimatron or the Purchaser),
  Enrico Gardini (Gardini),
  Alberto Zega (Zega), Roberto
  Rizzo (Rizzo) and Esa Software
  S.p.A. (ESA) (each of Gardini, Zega, Rizzo, and ESA a Seller and together, the
Sellers). Microsystem Srl (including any
  and all related affiliates, holdings and businesses, if any) is evaluated
  (100%) at US$2,550,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|   | For the
  purposes of this LOA, affiliates of Microsystem (hereinafter Affiliates) shall mean any entity in
  which Microsystem holds, directly or indirectly, any shares, quotas or
  capital (including, (i) Trend S.r.l.; (ii) Cad Cam Studio S.r.l.; (iii) Smart
  Team Italia S.r.l., and (iv) Solid World srl).                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|2. | The
  transaction will be divided into three phases:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|   | 2.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Phase 1  at
  the First Closing (the First Closing),
  which will be the closing of Phase 1, Microsystem shall increase its capital
  reserving all such increase to Cimatron which will acquire and receive an
  issuance of quotas constituting immediately following the First Closing 27.5%
  (on a post-money fully diluted basis) of Microsystem capital directly from
  Microsystem for the consideration detailed in sub- section 2.1.1 below:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2.1.1.
  Investment by Cimatron in Microsystem at the First Closing of the sum of
  575,000 EURO of which 568,730 EURO will be paid as share capital premium and
  6270 EURO as payment of nominal value of shares. Such consideration will be
  used by Microsystem to pay its debts to Cimatron.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2.1.2.
  [intentionally reserved].                                                                                                                                                                                                                                                                

---

---



| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  |  | 2.1.3. Conditions to the
  First Closing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| |  |  | Cimatrons
  obligation to consummate the First Closing is subject to the fulfillment
  prior to, or at the First Closing of all the following conditions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| |  |  | 2.1.3.1. The Sellers shall
  amend Microsystem by-laws in order to enable the increase of capital in favor
  of Cimatron. The increase of the capital shall be made in accordance with the
  applicable laws and the by-laws of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.1.3.2. The By-law of
  Microsystem shall be further amended in order to make any transfer of quotas
  contingent on Cimatrons prior written approval (gradimento).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.1.3.3. All the
  representations of Microsystem and the Sellers set forth in Exhibit 2.1.3A
  attached hereto shall be true and correct as of the date of this LOA and as
  of the date of the First Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.1.3.4. Cimatron shall be
  granted all the rights set forth in Exhibit 2.1.3B attached hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.1.3.5.
  Microsystem and the Seller shall have performed and undertake to perform all
  the covenants set forth in Exhibit 2.1.3C attached hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  |  | 2.1.3.6. The
  Articles of Association and By-laws and all other corporate documents of each
  of (i) Microsystem, (ii) Trend S.r.l.; (iii) Cad Cam Studio S.r.l.; and (iv)
  Smart Team Italia S.r.l., shall be amended so that (a) all of Cimatron rights
  detailed in this LOA will be included therein, (b) that the quorum for any
  shareholders meeting and any shareholders resolution  including
  extraordinary meetings - will be 51% so as to give Cimatron (at the time
  Cimatron will hold 51% of Microsystem share capital) full control of
  Microsystem and to give Microsystem full control of its Affiliates (except
  for Solid World srl.), (c) that the vote required in order to amend any
  Articles, By-laws or any other corporate document of such entities will be
  51%. All such corporate documents to be in a Form satisfactory to Cimatron
  at Cimatrons sole and absolute discretion. Such satisfaction will be
  communicated to Microsystem and the Sellers in writing.
| |  |  | 2.1.3.7. Cimatron will receive a legal opinion from counsel to
  Microsystem in a Form satisfactory to Cimatron at Cimatrons sole and absolute
  discretion to be communicated in writing to Microsystem.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

- 2 -

---

---



| |                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.1.3.8. Cimatron shall receive validly
  executed First Call Option and Second Call Option (as such term are defined
  below), each in a Form satisfactory to Cimatron at Cimatrons sole and
  absolute discretion. All such shares and options issued to
  Cimatron being free and clear of any pre-emptive, first refusal, co-sale or
  any other third party rights and claims.
| |                                                                                                                                                                                                                                                                                                                                                                                     
| | 2.1.3.9. All consents, waivers and approvals
  of any kind or type required in order to consummate the transactions
  contemplated in this LOA and in the First Call Option and the Second Call
  Option will be received and presented to Cimatron.                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                     
| | 2.1.3.10. All the shareholders of
  Microsystem will enter into a shareholders agreement with Cimatron in a Form
  satisfactory to Cimatron.                                                                                                                                                                                                                                        

| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | 2.2. | Phase 2  at
the First Closing Cimatron will be granted a call option (the First Call
Option) for a period of twenty four (24) months starting immediately
following the First Closing. The option will be to acquire up to 23.5% of
Microsystem capital (on a post-money fully diluted basis) from Enrico
Gardini, Alberto Zega and Roberrto Rizzo (the First Call Option Sellers) (in equal parts between the
First Call Option Sellers) (or such other number of shares as will be
required to bring Cimatrons holdings immediately following the exercise of
such call option (plus the shares acquired in Phase 1) to 51% of Microsystem
share capital (on a post-money fully diluted basis) (with ability to fully
control Microsystem). The call option exercise will be at a total price of up
to US$599,250 for all such shares. The exercise of such call option by
Cimatron shall be referred to herein as the Second Closing. The rights of
Cimatron following the Second Closing will be as set forth in Exhibit 2.1.3C
attached hereto.                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| | 2.3. | Phase 3 
  effective only in case the call option of Cimatron in Phase 2 was exercised
  in full by Cimatron. Cimatron will have a call option (the Second Call Option) and the Sellers will
  have a put option to realize Phase 3 for a period of 30 days (the Phase 3 Exercise Period) starting
  immediately after the expiration of a period of twelve (12) month from the
  Second Closing. The option of Cimatron will be to acquire from the Sellers
  all of Microsystem remaining capital not then owned by Cimatron, such that
  Cimatron - alone or together with an other entity designated by Cimatron -
  will be the owner of 100% of Microsystem share capital (including shares
  owned currently by ESA Software). The Option of the Sellers will be (i)
  exercisable only during thePhase 3
  Exercise Period, and (ii) to force Cimatron to buy the remaining
  outstanding shares of Microsystem then held by them. Such acquisition by
  Cimatron, if effected (whether due to the call option or the put option),
  will be at a total price of: $1,249,500.

- 3 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | No
  Publicity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Microsystem
  and the Sellers will keep this LOA and its contents in strict confidence and
  no announcement or any other disclosure to any person or entity of the
  proposed transaction between the parties, the terms set forth in this LOA, or
  the status of discussions between the parties will be made without the prior
  written approval of Cimatron except as required by law. The Non Disclosure
  Agreement signed by the parties will continue to apply. Cimatron may disclose
  this LOA and the transactions contemplated hereby to its shareholders and
  otherwise as required by any laws or regulations applicable to Cimatron.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4. | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 4.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Following
  the signing of this LOA, Cimatron may conduct an additional due diligence
  review (including without limitation, legal, financial (including audited
  accounts), and business due diligence). Subject to the representations and
  warranties of Microsystem and the Sellers under this LOA being complete, true
  and correct, the outcome of any such further due diligence investigation
  conducted shall not effect the valuation of Microsystem under this LOA. The
  Sellers, and Microsystem will cooperate fully and provide all required
  information to complete such due diligence by Cimatron.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 4.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Both parties
  acknowledge that such corporate documents, shareholders agreements and
  options granted to Cimatron will include additional terms and conditions,
  including representations, warranties and covenants, which are standard for a
  transaction of this type.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 4.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | This LOA is
  a binding agreement and subject to the terms and conditions of this LOA,
  Microsystem and the Sellers will use its best efforts to take, or cause to be
  taken, all action, and to do, or cause to be done, all things necessary,
  proper or advisable under applicable laws and regulations to consummate and
  make effective the transactions contemplated by this LOA.                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 4.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Each party
  will bear its own expenses with respect to the matters contemplated herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 4.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Each party
  acknowledges that this LOA replaces any prior LOA or MOU (which is hereby
  canceled) and any correspondence, conducts, dealings or any other action
  between the parties with respect to the subject matter of this LOA                                                                                                                                                                                                                                                                                                                                                                                    

- 4 -

---

---



| |      |                                                                                                                                                                                                                                                                                                                                                                   
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.6. | The parties
  expect that the target date for the First Closing shall be July 1, 2005 and
  that the final forms of the First Call Option, Second Call Option, legal
  opinion and shareholders agreement will be finalized within 10 days following
  the signing of this LOA.                                                                                   
| |      |                                                                                                                                                                                                                                                                                                                                                                   
| | 4.7. | This LOA
  will be governed by, and construed in accordance with, the laws of the State
  of Israel, without regard to its principles of conflicts of laws and
  adjudicated exclusively in Israel; provided, however, that Cimatron may at
  its sole discretion also initiate a claim in Italy under either Israeli laws
  or Italian laws at Cimatrons choice.
| |      |                                                                                                                                                                                                                                                                                                                                                                   
| | 4.8. | This LOA
  shall only become effective and binding when signed by Cimatron, Microsystem
  and all the shareholders of Microsystem. In case the LOA is not signed within
  20 days by all the parties mentioned above, it shall become null and void.                                                                                                              

- 5 -

---

---



|                                                                                                          |                         |                 |            |                        |  | 
|--------------------------------------------------------------------------------------------------------- | ----------------------- | --------------- | ---------- | ---------------------- |  | 
|CIMATRON LTD.                                                                                             |                         | MICROSYSTEM SRL
|                                                                                                          |                         |                 |            |                       
|By:                                                                                                       | /s/ Yossi
  Ben Shalom. |                 | By:        | /s/ Enrico
  Gardini  
|                                                                                                          |                         |                 |            |                        |  | 
|                                                                                                          | /s/ Zvika
  Naggan      |                 |            |                       
|                                                                                                          |                         |                 |            |                        | 
|Name:                                                                                                     |                         |                 | Name:      |                       
|                                                                                                          |                         |                 |            |                       
|Title:                                                                                                    |                         |                 | Title:     |                       
|                                                                                                          |                         |                 |            |                       
|Date:                                                                                                     |                         |                 | Date:      |                       
|                                                                                                          |                         |                 |            |                       
|We agree to
  be bound by the terms hereof [All
  Shareholders of Microsystem should sign this Document]: |                         |                 |           
|                                                                                                          |                         |                 |            |                       
|Name:                                                                                                     | Enrico
Gardini          |                 | Name:      | Roberto
Rizzo         
|                                                                                                          | /s/ Enrico
  Gardini    |                 |            | /s/ Roberto
  Rizzo   
|                                                                                                          |                         |                 |            |                        |  | 
|Title:                                                                                                    |                         |                 | Title:     |                       
|                                                                                                          |                         |                 |            |                       
|Date:                                                                                                     |                         |                 | Date:      |                       
|                                                                                                          |                         |                 |            |                       
|Name:                                                                                                     | Alberto
Zega            |                 | Name:      | Esa
Software Spa      
|                                                                                                          | /s/ Alberto
  Zega      |                 | Singed By: | /s/
  Antonello Morina
|                                                                                                          |                         |                 |            |                        |  | 
|Title:                                                                                                    |                         |                 | Title:    
|                                                                                                          |                         |                 |            |                       
|Date:                                                                                                     |                         |                 | Date:     
|                                                                                                          |                         |                 |            |                       

- 6 -

---

---



Exhibit 2.1.3 A

Representations of Microsystem and the
Sellers to Cimatron as of the Date of this LOA and As of the First Closing:

The Company
and each of the Sellers, jointly and severally represent, warrant and covenant
(except that representations and warranties of any Seller are made severally
and not jointly in relation to each other Seller) to the Purchaser as of the
date hereof and as the First Closing as follows, and hereby acknowledge that
the Purchaser is entering into this LOA in reliance thereon (all except as set
forth in Annex A attached to this Exhibit 2.1.3A:

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | Organization
  and Permits. The Company and each of its Affiliates
  are duly organized and validly existing as corporations under the laws of
  Italy, and have (i) all requisite corporate power and authority to own, lease
  and operate their properties and assets and to conduct their business as now
  being conducted and (ii) all franchises, permits, licenses, and any similar
  authority necessary to conduct their business as now being conducted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | Capitalization.
  The authorized and outstanding capital of the Company and of its Affiliates
  is set forth in Annex A. There are no, and as of the First Closing there will
  not be, any outstanding or authorized subscriptions, options, warrants,
  calls, rights, commitments, convertible securities or any other agreements
  directly or indirectly obligating the Company or any of its Affiliates to
  issue any additional shares or securities convertible into, or exchangeable
  for, or evidencing the right to subscribe for, any shares of the Company or
  any affiliate. The Company and any of its Affiliates are not a party or
  subject to any agreement or understanding, and, to the best of the Companys
  and Sellers knowledge, there is no agreement or understanding between any
  persons and/or entities, which affects or relates to the voting or giving of
  written consents with respect to any security of the Company or any of its
  Affiliates.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 3. | Title;
  Enforceability. The Sellers own and have full title
  to the shares subject to the First Call Option and the Second Call Option (as
  defined in this LOA) free and clear of all liens, charges, encumbrances,
  debt, restrictions, rights, claims, options to purchase, proxies, voting
  trusts and other voting agreements and any other third party rights of any
  kind and type. As of the date hereof and as of the First Closing Date, and
  upon exercise of the First Call Option and the Second Call Option, the
  Purchaser will acquire from the Sellers good and marketable title to the
  shares under said options, free and clear of all liens, charges,
  encumbrances, debt, restrictions, rights, claims, options to purchase,
  proxies, voting trusts and other voting agreements and any other third party
  rights of any kind and type.                                                                                                                  

- 7 -

---

---



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4. | Valid
  Issuance of First Closing quotas. The quotas issued
  to Cimatron at the First Closing, when issued, sold, delivered and paid for
  in accordance with the terms of this Agreement for the consideration expressed
  herein, will be duly and validly issued, fully paid, and non-assessable, and
  will be free of any liens, charges, encumbrances, debt, restrictions, rights,
  claims, options to purchase, proxies, voting trusts and other voting
  agreements and any other third party rights of any kind and type including,
  without limitation, preemptive rights, and restrictions on transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 5. | Subsidiaries.
  Except as set forth in Annex A attached to this Exhibit 2.1.4A, (which shall
  include full ownership structure of each entity) the Company does not own any
  of the issued and outstanding share capital of any other company or other
  entity, and is not a participant in any partnership, joint venture or similar
  arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 6. | Compliance
  with Laws and Instruments. Neither the execution,
  delivery or performance of this LOA, including the issuance of the shares at
  the First Closing and the issuance and exercise of the First Call Option and
  the Second Call Option will: (A) conflict with, result in a breach or
  violation of, or (with or without the passage of time and giving of notice) a
  default under any of the terms, conditions and provisions of: (i) any of the
  Companys and any of its Affiliates corporate documents; (ii) any judgment,
  order, injunction, decree, or ruling of any court or governmental authority,
  domestic or foreign, to which the Company and any of its Affiliates or any of
  the Sellers is subject; (iii) any agreement, contract, lease, license or
  commitment to which the Company and any of its Affiliates or any of the
  Sellers is party or to which it is subject; or (iv) applicable laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 7. | Litigation.
  There is no legal action, suit, claim or other proceeding in any court of law
  pending against the Company or any of its Affiliates or any of the Sellers,
  or to the best of the Companys and the Sellers knowledge, threatened
  against the Company or any of its Affiliates or against any of the Sellers
  (including, but not limited to, such as may be related to the Company, the
  Sellers shares in the Company, this LOA, the transactions contemplated
  hereby or the use by any of the Companys or any of its Affiliates
  employees, in connection with the Companys business, of any information or
  techniques allegedly proprietary to any of their former employers, or their obligations
  under any agreements with prior employers). To the best of the Companys and
  the Sellers knowledge, there is no cause which may constitute a basis for
  any of the foregoing. Neither the Company nor any of its Affiliates are not a
  party or subject to the provisions of any order, writ, injunction, judgment
  or decree of any court or government agency or instrumentality. There is no
  legal action, suit, claim or other proceeding in any court of law pending
  against the Sellers, or to the best of the Sellers knowledge, threatened
  against the Sellers in connection with their ownership of their shares in the
  Company or this LOA. The Sellers do not have and will not have any claim or
  demand of any kind against the Company or any of its Affiliates.

- 8 -

---

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 8.  | Financial
Statements. Enclosed as Annex A are financial
statements of the Company and the Affiliates for the fiscal year ending
December 31, 2004 (the Financial Statements) approved by the Board of
Auditors of Microsystem and the shareholders of Microsystem. The Financial
Statements have been prepared in accordance with generally accepted
accounting principles in Italy applied on a consistent basis throughout the
periods indicated and with each other. The Financial Statements fairly
present the financial condition, operating results, assets, liabilities,
commitments and profits of the Company and any of its Affiliates as of the
dates, and for the periods, indicated therein. Except as set forth in the
Financial Statements, the Company is not aware of any bad or doubtful debts
on its books at the date hereof. Except as reflected, disclosed or reserved
for in the Financial Statements, the Company and its Affiliates do not have
any indebtedness or liability (whether accrued, absolute, contingent or otherwise)
nor any outstanding commitments or obligations of any kind (whether or not
such obligations or commitments are presently considered liabilities of the
Company or the Affiliates under generally accepted accounting principles),
including to the Sellers or any officers, shareholders or consultants of the
Company or the Affiliates. In addition, within 21 days from the First
Closing, Microsystem shall deliver to Cimatron audited financial statements
of the Company and the Affiliates for the fiscal year ending December 31,
2004 performed by an auditor reasonably acceptable to Cimatron (the 2004 Audited Financials).
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | Subject to
  the representations of Microsystem and the Sellers under this LOA being true
  and correct and provided that the audit conducted by the outside accounting
  firm on the 2004 Audited Financials is based on the same facts that were the
  basis for the Financial Statements, then, any differences due to applying
  different evaluation criteria for certain assets and debts of Microsystem and
  it Affiliates shall not effect the valuation of Microsystem under this LOA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 9.  | Related
  Party Transactions. No shareholder, employee,
  officer, director, employee or agent of the Company or any of its Affiliates,
  including, without limitation, the Sellers, nor any member of the immediate
  family of any such person, is indebted to the Company or any of its
  Affiliates, nor is the Company or any of its Affiliates indebted (or
  committed to make loans or extend or guarantee credit) to any of them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | 10. | Except as
  set forth in Annex A, there are no existing arrangements or transactions
  between the Company or any of its Affiliates and any officer, director, or
  holder of 5% or more of the capital stock of the Company or any of its
  Affiliates, or to the best knowledge of the Company any affiliate or
  associate of any such person. Neither the Company nor any of its Affiliates
  has entered into any arrangement or transaction with any officer, director,
  or holder of 5% or more of the capital stock of the Company or any of its
  Affiliates on terms that differ from those which would govern a like
  transaction with an unaffiliated third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

- 9 -

---

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 11. | Disclosure.
  The Company and each of the Sellers has fully provided the Purchaser with all
  the information that the Company believes is reasonably necessary to enable a
  reasonable Purchaser to make such decision. Neither this Agreement, nor any
  other statements or certificates made or delivered in connection herewith or
  therewith (together with all other representations and warranties given
  herein) contains any untrue statement of a material fact or omits to state a
  material fact necessary to make the statements herein or therein not
  misleading. There is no fact that the Sellers and the Company have not
  disclosed to the Purchaser in writing that might have a material adverse
  effect on the Company (including its Affiliates) or their financial condition
  or business or that might materially adversely effect the ability of the
  Company to perform its obligations under this LOA or the First Call Option or
  the Second Call Option.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 12. | The
  consolidated financial statements of Microsystem and its Affiliates for the
  period ended December 31, 2004 and a list of all compensation and other
  rewards received during the year 2004 by directors and shareholders of
  Microsystem and its Affiliates or anyone on their behalf from Microsystem and
  its Affiliates are attached hereto as Annex A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

- 10 -

---

---



Exhibit 2.1.3B

Covenants of Microsystem and each of the
Sellers towards Cimatron:

(i) The
Sellers hereby waive all rights of pre emptive, first refusal, first offer,
co-sale or any other participation rights concerning the issuance and sale of
shares to Cimatron n accordance with this LOA.

(ii)
Microsystem and the Sellers undertake to take all required actions, including
without limitation voting their shares, in order to implement the provisions of
this LOA and of the First Call Option and the Second Call Option (including
amending any corporate documents).

(iii) Prior to
the First Closing, each shareholder (all the Sellers) of Microsystem will have
executed a Non-disclosure, Non-competition and Assignment of Inventions
Agreement in the form satisfactory to Cimatron.(iii) Financial Statements.
Microsystem and its Affiliates (except for Solid World srl.) shall maintain a
system of accounting established and administered in accordance with Italian
generally accepted accounting principles consistently applied shall use
auditors acceptable by Cimatron, will keep full and complete financial records
and will furnish to Cimatron the following reports: (a) As soon as practicable
after the end of each fiscal year, and in any event within 30 days thereafter,
consolidated audited financial statements of Microsystem and its Affiliates in
such detail as is necessary in order for Cimatron to satisfy the any regulatory
requirements applicable to it, including a translation of such statements, or
such parts thereof as indicated by Cimatron, into US generally accepted
accounting principles performed by an auditor reasonably acceptable to
Cimatron; and (b) as soon as practicable after the end of the first, second,
and third quarter in each year, and in any event within 30 days thereafter,
consolidated unaudited reviewed quarterly financial statements of Microsystem
and its Affiliates, including a translation of such statements, or such parts
thereof as indicated by Cimatron, into US generally accepted accounting
principles performed by an auditor reasonably acceptable to Cimatron, and (c)
as soon as practicable after the First Closing and in any event within 30 days
thereafter, consolidated audited financial statements of Microsystem and its
Affiliates, as of the First Closing Date including a translation of such
statements, or such parts thereof as indicated by Cimatron, into US generally
accepted accounting principles performed by an auditor reasonably acceptable to
Cimatron. All the above at Microsystem sole cost and expense.

(iv)
Microsystem acknowledges that Cimatron is publicly traded, and will furnish to
Cimatron with reasonable promptness, such information and data with respect to
the Microsystem or its Affiliates as Cimatron may from time to time request
including in order to comply with reporting, disclosure, filing, audit, accounting, regulatory, tax or
other similar requirements imposed
on Cimatron.

- 11 -

---

---



(v) Veto
Rights. Following the First Closing Microsystem and any of its Affiliates
(except for Solid World srl.) and the Sellers will not, without the prior
written consent of Cimatron take any of the action set forth in Schedule B attached hereto or adopt any resolution to
effect any such action. Such veto rights to be valid for a minimum period of 36
months following the First Closing. In the event that Cimatron (i) reaches 51%
of Microsystem share capital (quotas) within such 36 months the veto rights
shall continue as long as Cimatron holds at least 51% of the share capital, and
(ii) in the event that Cimatron does not reach 51% of the share capital
(quotas) of Microsystem within such 36 month period, then (a) all the veto
rights set forth in Schedule B attached hereto (except the veto right mentioned
under sub-section 5 of Schedule B  Related Party transaction) shall cease to
apply and Cimatron will have all rights as any other shareholder in Microsystem,
and (b) the veto right mentioned under sub-section 5 of Schedule B  Related
Party transaction will remain in force for as long as Cimatron holds shares
(quotas) in Microsystem.

(vi) Restrictions
on Transfer. The Sellers undertake that as long as any of the options
detailed in the LOA are exercisable, they shall not sell, transfer, assign,
encumber, pledge, hypothecate, or otherwise encumber or dispose of in any way
or grant to third parties any rights with respect to any shares or other
securities of Microsystem held by them.

(vii) Visits
and Discussions. The Company and its Affiliates (except for Solid World
srl.) will permit the Purchaser and the authorized representatives of the
Purchaser, at all reasonable times during normal business hours following
reasonable notice and as often as reasonably requested, to visit and inspect,
any of the properties of the Company and its Affiliates (except for Solid World
srl.), including their books and records and lists of security holders and
shall be allowed to copy them, and to discuss the affairs, finances, and
accounts of the Company and its Affiliates (except for Solid World srl.) and
receive any information requested from their officers.

(viii) each
Seller undertakes not to engage, establish, open or in any manner whatsoever
become involved, directly or indirectly, either as an employee, owner, partner,
agent, shareholder, director, consultant or otherwise, in any business,
occupation, work or any other activity which is reasonably likely to involve or
require the use of any of the Companys or any of its Affiliates assets or
confidential information or that competes with the activity of the Company or
of any of its Affiliates or engage in any activity related to marketing,
distribution, advising, sale, maintenance or installation of CAD CAM systems or
solutions targeting the manufacturing and/or tooling industries. The non
compete obligations provided in this LOA shall remain in force for a period of
5 years from the date of this LOA or from the expiration of the statutory non
compete obligation. Notwithstanding the above, in the event that following the
exercise by Cimatron of the First Call Option (or the ownership by Cimatron
otherwise of 51% of Microsystem), Microsystem or such relevant Affiliate (except
for Solid World srl.) then dismisses those Sellers who hold directorship
position in Microsystem and/or in any of its Affiliates (except for Solid World
srl.) from such position (other then for just cause), then such dismissed
Director shall be subject to the non compete obligation mentioned above only
for a period of 12 months from the date of such dismissal.

- 12 -

---

---



(ix) each
Seller undertakes not to induce any employee of the Company or any of its
Affiliates to terminate such employees employment therewith and any customer
or supplier of the Company to terminate its relations with the Company or any
of its Affiliates and shall not have any contact or relations of any kind with
any such customer or supplier in any matter competitive to the business of the
Company.

(xiii) The
Company and the Sellers, jointly and severally, agree to indemnify, defend and
hold harmless the Purchaser in case of any breach or misrepresentation of any
covenant, representation or warranty made by the Company and/or the Sellers
under this LOA or the First Call Option or the Second Call Option
(collectively, Breaches) and
from and against all claims, suits, losses, liabilities and damages to the
Purchaser (collectively, Losses)
based upon or arising out of any Breach.

- 13 -

---

---



Exhibit 2.1.3C

Rights attached to the shares to be held by
Cimatron following the First
Closing (by agreement with all other shareholders of Microsystem and its
Affiliates(except for Solid World srl.)):

| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | All rights
  of the highest rank attached to all other shares of the highest rank (as of
  the First Closing) of the capital of the Company, including without
  limitation: voting rights, rights to receive dividends, rights to receive
  notice and attend all shareholders meetings, rights to receive all distribution
  upon liquidation of the Company.                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (ii)  | From the
  First Closing Cimatron will be entitled to appoint at it sole discretion
  either (a) one director to Microsystem board of directors and to the Board of
  directors of each of Microsystem Affiliates (except for Solid World srl.) and
  to the Board of Auditors or (ii) one observer (fully entitled to receive all
  information and attend board meetings, but without a right to vote) to
  Microsystem board of directors and to the Board of directors of each of
  Microsystem Affiliates (except for Solid World srl.).
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (iii) | Cimatron
  will have first refusal to buy all shares offered for sale by any shareholder
  of Microsystem. Cimatron will not be subject to any restriction of any kind
  or type whatsoever on the sale and transferability of its shares in
  Microsystem (including, but not limited to, any first refusal rights, co-sale
  rights, Board of Directors approval)                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (iv)  | Cimatron
  will have pre-emptive rights to acquire shares from Microsystem upon any new issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (v)   | Co-sale
  rights to join in any sale of shares of Microsystem by any shareholder of
  Microsystem. Cimatron shall not be subject, with respect to its shares in
  Microsystem, to any co-sale or similar rights to any other shareholder or
  party.                                                                                                                                                                                                                                                                                         

- 14 -

---

---



Rights attached to the shares to be held by
Cimatron following the Second
Closing:

| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (vi)  | From the
  Second Closing Cimatron will be entitled to appoint ALL the directors
  appointed to Microsystem Board of Directors; except that the other shareholders
  of Microsystem will be entitled to appoint one director to the Board of
  Directors of Microsystem as long as they hold shares in Microsystem..
  Cimatron will also be granted all other means required in order to fully
  control Microsystem and all of Microsystem Affiliates (except for Solid World
  srl.).
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (vii) | All the
  other rights and covenants granted to Cimatron as of the First Closing will
  still remain in full force and effect.                                                                                                                                                                                                                                                                                                                                                          

- 15 -

---

---



Schedule B Veto Rights of Microsystem and
/or all Sellers

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  | Alter or
  change the Articles of Association, By Laws and all other incorporation
  documents and the rights, preferences, or privileges of any of the shares or
  other securities;                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2.  | Create any
  class or series of shares or other securities or issue any shares or
  securities of any kind or type (including without limitations any debt
  securities, convertible securities, warrants, options, etc.);                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3.  | Effect an
  initial public offering, merger or sale of shares or any portion of its
  assets or other transaction that resulting in a change in control;                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4.  | Declare or
  pay any dividend or other distribution of cash, shares, or other assets or
  redeem or repurchase any shares;                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5.  | Effect any
  interested party transaction or amend any existing interested party
  transaction, including without limitation any business transaction (including
  employment or consulting agreement) with any of the Sellers or any officer,
  director or shareholders of the Company or of any of its Affiliates or any
  relative of such person or entity under its control (Interested Person) or any transaction in
  which an Interested Person has any financial or other interest;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6.  | Effect any
  dissolution, liquidation or other winding up of the Company or any affiliate
  or the cessation of all or any part of the business of the Company or any
  affiliate;                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|7.  | Create a
  material change in the Companys and/or any of its Affiliates (except for
  Solid World srl.) business. Furthermore, the Company undertakes not to sell
  or otherwise dispose of, or pledge, any shares/quotas or participation rights
  of Microsystem in any of its Affiliates;                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|8.  | Approve
  incurrence of indebtedness in excess of US$100,000 (whether in one
  transaction or a series of transactions);                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|9.  | Create any
  mortgage, pledge or other security interest on all or any part of the assets
  of the Company or its Affiliates (except for Solid World srl.);                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10. | Appoint,
  remove or replace the Companys Chief Executive Officer;                                                                                                                                                                                                                                                                                                                                                                                                                            

- 16 -

---

---



SHAREHOLDERS AGREEMENT

THIS
SHAREHOLDERS AGREEMENT (this Agreement)
made as of the 1st of July 2005 (the Effective
Date) by and among Microsystem S.r.l., an Italian corporation (the
Company), Cimatron Ltd. an
Israeli company (Cimatron),
Enrico Gardini (Gardini),
Alberto Zega (Zega), Roberto
Rizzo (Rizzo), and ESA Software
S.p.A (ESAand together with Gardini, Zega and Rizzo, the Sellers). Cimatron and the Sellers
shall
be referred to collectively as the Shareholders.
Participation to the Companys share capital shall be referred herein as
Quotas and/or Participation.

W I T N E S S E T H :

WHEREAS,
pursuant to that certain Letter of Agreement, dated May 24, 2005, by and among
the Company, Cimatron and the Sellers (the Letter
of Agreement), Cimatron purchased a Quota of the share capital of
the Company equal to 27.5 % of the same and received an option to purchase all
the remaining Quotas held by the Sellers and the Sellers received an option to
sell a certain percentage of their Participation in the Companys share capital
to Cimatron, all under the terms and conditions of the Letter of Agreement; and

WHEREAS,
the Company and the Shareholders desire to set forth certain matters regarding
the management of the Company and the transfer of the Quotas; and

WHEREAS,
Cimatron entered into the Letter of Agreement based upon the terms and
covenants of this Agreement, and

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

|   |                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Restrictions on Transfer
|   |                         
|   | 1.1.                     | For purposes
  of this Agreement, the term Transfer shall include any sale, assignment,
  encumbrance, disposition, grant of any option or other right to acquire,
  pledge, lien, hypothecation, conveyance in trust, gift, transfer by bequest,
  devise or descent, and transmissions to receivers, levying creditors,
  trustees or receivers in bankruptcy proceedings or general assignees for the
  benefit of creditors, whether voluntary or by operation of law, directly or indirectly,
  of Quotas directly or beneficially owned by a Shareholder. The term
  Transfer shall not include the transfer of quotas to heirs of a deceased
  shareholder, provided such heirs shall undertake in writing to be bound by
  all the terms and conditions of this Agreement, the First Call Option and the
  Second Call Option (as defined under the Letter of Agreement).

---

---



| |      |                                                                                                                                                                                                                                         
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.2. | No
  Shareholder may Transfer any Quotas without complying with the terms of this
  Agreement. Any attempted transfer in violation of this Agreement shall be
  void and of no force and effect and shall not be honored by the Company.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | No Transfer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Notwithstanding
  anything to the contrary, as long as any of the First Call Options or the
  Second Call Options (as defined under the Letter of Agreement) granted by any
  of the Sellers to Cimatron under the Letter of Agreement is exercisable by
  Cimatron (the No Transfer Period),
  the Sellers may not Transfer their Participation, whether in whole or in part
  to third parties, and any such Transfer shall be void and of no force and
  effect and shall not be honored by the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Rights of First Refusal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 3.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Following
  the No Transfer Period, if at any time any Seller proposes to Transfer in
  whole or in part their Participation in the Company (a Disposition), then such Seller (a Selling
Shareholder) shall give Cimatron
  a written notice of such Disposition (the Transfer
  Notice), which Transfer Notice shall include a description of the
  Participation to be transferred (Offered
  Quota and/or Offered Participation), the identity of the
  transferee and the consideration and material terms and conditions upon which
  the Selling Shareholder wishes to make the proposed Disposition.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 3.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Cimatron
  shall have a pre-emption right to purchase all of the Offered Participation
  at the same price and subject to the same material terms and conditions as
  described in the Transfer Notice. Cimatron may exercise such pre-emption
  right and, thereby purchase all of the Offered Participation, by notifying
  the Selling Shareholder and the Company in writing, within twenty one (21)
  business days following receipt of the Transfer Notice (the Purchase Notice).                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 3.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Subject to
  the provisions of Section 2 of this Agreement, the Selling Shareholder shall
  be free, within 90 days of the date of expiration of the purchase option, to
  sell the Offered Participation not purchased by Cimatron to a third party at
  the price and on the terms contained in the Transfer Notice. If there is no
  sale within such 90-day period, the Selling Shareholder shall not sell or
  transfer the Offered Participation, or any other acquired Participation
  before or after the date hereof, without complying again with the provisions
  of this Section 3.                    

- 2 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 3.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | For avoidance
  of doubt, Cimatron may Transfer all or part of its Quotas without complying
  with this Section 3 and without any other limitation whatsoever, including
  without limitation, first refusal and co-sale and without the need for any
  approval from the other Shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | Co-Sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Following
  the No Transfer Period and provided Cimatron has not exercised its pre-emption
  right under Section 3, the Sellers may not Transfer any part of their
  Participation in the Company from time to time owned by them unless the
  prospective purchaser offers to purchase from Cimatron, on terms no less
  favorable than those offered to the Sellers, such percentage of the
  Participation to be purchased up to that portion determined by multiplying
  the size of the Participation to be purchased by the purchaser (the Offered
  Quota) by a fraction (i) the numerator of which is the percentage of the
  share capital of the Company owned by Cimatron; and (ii) the denominator of
  which is the total percentage of the share capital of the Company which are
  then owned by Cimatron and by the Sellers proposing to sell their
  Participation. Cimatron shall have twenty one (21) days to decide whether to
  accept any offer to purchase pursuant to this Section 4 and may accept such
  offer in whole or in part.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | Preemptive Rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 5.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | If the
  Company proposes to issue or sell any New Securities (as defined below), the
  Company shall grant, prior to such issuance, to Cimatron the right to
  purchase its pro-rata share in the Company of the New Securities, thereafter
  maintaining its proportionate equity ownership in the Company. A
  Shareholders pro-rata share, for purposes of this Section, is the ratio of
  the percentage of the share capital owned by such Shareholder immediately
  prior to the issuance of the New Securities (on an as converted basis) in
  relation to the share capital of the company issued and outstanding
  immediately prior to the issuance of New Securities (on an as converted
  basis). Cimatron shall have a right of over-allotment such that if any
  shareholder declines or fails to exercise a right of such shareholder to
  purchase its pro-rata share of the New Securities, Cimatron may purchase such
  declining shareholders portion.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 5.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | In the event
  the Company proposes to issue New Securities, it shall give Cimatron written
  notice of its intention, describing the type of New Securities, their price
  and the general terms upon which the Company proposes to issue the same.
  Cimatron shall have twenty one (21) days after such notice is mailed or delivered
  to elect to purchase its pro rata share of such New Securities and any
  additional Quota as may be available for over-allotment, upon the terms and
  conditions specified in the notice, by giving written notice to the Company
  and stating therein the maximum amount of New Securities elected to be
  purchased.                                                                                                                                                                                                                                                                                                         

-
3 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | The Company
  shall have thirty (30) days thereafter to sell, or enter into an agreement to
  sell, to any third party, the remainder of the New Securities with respect to
  which the Cimatrons preemptive right was not exercised, at a price and upon
  terms no more favorable to the purchasers thereof than specified in the
  Companys notice. In the event the Company has not sold, or entered into an
  agreement to sell, the New Securities within the thirty (30) day period, the
  Company shall not issue or sell any New Securities without first complying
  with the provisions of this Section 4.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 5.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | For the
  purpose of this Section New Securities
  shall mean any quota or any equity interest in the Company, whether now
  authorized or not. including, without limitation, debt securities.                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6. | Veto Rights                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company
  and any of the entities in which the Company holds, directly or indirectly,
  any shares, quotas or capital (Affiliates)
  (except for Solid World S.r.l. .) and the Sellers will not, without the prior
  written consent of Cimatron take any of the actions set forth in this Section
  6 or adopt any board, shareholders or other resolution to effect any such
  action. Such veto rights to be valid for a minimum period of 37 months
  following the Effective Date. In the event that Cimatron (i) reaches 51% of
  the Companys share capital (quotas) within such 37 months the veto rights
  shall continue as long as Cimatron holds at least 51% of the share capital of
  the Company, and (ii) in the event that Cimatron does not reach 51% of the
  share capital (quotas) of the Company within such 37 month period, then (a)
  all the veto rights set forth in this Section 6 hereto (except the veto right
  mentioned under Section 6.5  Related Party transactions) shall cease to
  apply and Cimatron will have all rights as any other shareholder of the
  Company, and (b) the veto right mentioned under Section 6.5  Related Party
  transactions will remain in force for as long as Cimatron holds a
  Participation in the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 6.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Alter or
  change the Articles of Association, By Laws and all other incorporation
  documents and the rights, preferences, or privileges of any of the Quotas or
  other securities;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 6.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Create any class
  or series of shares, quota or other securities or issue or increase any
  shares, quota or securities of any kind or type (including without
  limitations any debt securities, convertible securities, warrants, options,
  etc.);                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 6.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Effect an
  initial public offering, merger or sale of Quotas or any portion of its
  assets or other transaction that resulting in a change in control;                                                                                                                                                                                                                                                                                                                                                                                                                                                               

-
4 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 6.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Declare or
  pay any dividend or other distribution of cash, Quotas, or other assets or
  redeem or repurchase any Quotas;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Effect any
  interested party transaction or amend any existing interested party
  transaction, including without limitation any business transaction (including
  employment or consulting agreement) with any of the Sellers or any officer, director
  or shareholders of the Company or of any of its Affiliates or any relative of
  such person or entity under its control (Interested
  Person) or any transaction in which an Interested Person has any
  financial or other interest, pay any monies to any of the Shareholders of the
  Company or its Affiliates (except for Solid World Srl) except for the annual
  payments due to such shareholder to whom annual payments are listed in
  Exhibit A, attached hereto.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Effect any
  dissolution, liquidation or other winding up of the Company or any affiliate
  or the cessation of all or any part of the business of the Company or any
  affiliate;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Create a
  material change in the Companys and/or any of its Affiliates (except for
  Solid World S.r.l.) business. Furthermore, the Company undertakes not to sell
  or otherwise dispose of, or pledge, any quotas or participation rights of the
  Company in any of its Affiliates (for clarity, including Solid World);                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Approve
  incurrence of indebtedness in excess of US$100,000 (whether in one
  transaction or a series of transactions);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Create any
  mortgage, pledge or other security interest on all or any part of the assets
  of the Company or its Affiliates (except for Solid World srl.);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 6.10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Appoint,
  remove or replace the Companys Chief Executive Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|7. | Voting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In the event
  that Cimatron reaches 51% of the Companys share capital (quotas) within 37
  months following the Effective Date and as long as Cimatron holds at least
  51% of the share capital of the Company, the Sellers undertake to vote their
  Quota in the Company (and any other Quotas in the Company over which they
  exercise voting control) or take any actions by way of written consent in the
  same manner as Cimatron votes its Quota in the Company, at Cimatrons
  absolute sole discretion.

- 5 -

---

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8.  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company
  and its Affiliates (except for Solid World srl.) shall maintain a system of
  accounting established and administered in accordance with Italian generally
  accepted accounting principles consistently applied shall use auditors
  acceptable by Cimatron, will keep full and complete financial records and
  will furnish to Cimatron the following reports: (a) As soon as practicable
  after the end of each fiscal year, and in any event within 30 days
  thereafter, consolidated audited financial statements of the Company and its
  Affiliates in such detail as is necessary in order for Cimatron to satisfy
  the any regulatory requirements applicable to it, including a translation of
  such statements, or such parts thereof as indicated by Cimatron, into US
  generally accepted accounting principles performed by an auditor reasonably
  acceptable to Cimatron; and (b) as soon as practicable after the end of the
  first, second, and third quarter in each year, and in any event within 30
  days thereafter, consolidated unaudited reviewed quarterly financial
  statements of the Company and its Affiliates, including a translation of such
  statements, or such parts thereof as indicated by Cimatron, into US generally
  accepted accounting principles performed by an auditor reasonably acceptable
  to Cimatron, and (c) as soon as practicable after the Effective Date and in
  any event within 30 days thereafter, consolidated audited financial statements
  of the Company and its Affiliates, as of the Effective Date including a
  translation of such statements, or such parts thereof as indicated by
  Cimatron, into US generally accepted accounting principles performed by an
  auditor reasonably acceptable to Cimatron. All the above shall be at the
  Companys sole cost and expense.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|9.  | Supply of Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company
  acknowledges that Cimatron is publicly traded, and will furnish to Cimatron
  with reasonable promptness, such information and data with respect to the
  Company or its Affiliates as Cimatron may from time to time request including
  in order to comply with reporting, disclosure, filing, audit, accounting,
  regulatory, tax or other similar requirements imposed on Cimatron.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10. | Visits and Discussions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company
  and its Affiliates (except for Solid World srl.) will permit Cimatron and the
  authorized representatives of Cimatron, at all reasonable times during normal
  business hours following reasonable notice and as often as reasonably
  requested, to visit and inspect, any of the properties of the Company and its
  Affiliates (except for Solid World srl.), including their books and records
  and lists of security holders and shall be allowed to copy them, and to
  discuss the affairs, finances, and accounts of the Company and its Affiliates
  (except for Solid World srl.) and receive any information requested from
  their officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

- 6 -

---

---



|    |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | No-Competition; No-Solicitation
|    |                                
|    | 11.1.                           | Each Seller
  undertakes towards the Company and Cimatron not to engage, establish, open or
  in any manner whatsoever become involved, directly or indirectly, either as
  an employee, owner, partner, agent, shareholder, director, consultant or
  otherwise, in any business, occupation, work or any other activity which is
  reasonably likely to involve or require the use of any of the Companys or
  any of its Affiliates assets or confidential information or that competes
  with the activity of the Company or of any of its Affiliates, or engage in
  any activity related to marketing, distribution, advising, sale, maintenance
  or installation of CAD CAM systems or solutions targeting the manufacturing
  and/or tooling industries. These non compete obligations shall remain in
  force for a period of 5 years from the Effective Date or from the expiration
  of the statutory non compete obligation. Notwithstanding the above, in the
  event that following the exercise by Cimatron of the First Call Option (or
  the ownership by Cimatron otherwise of 51% of the Company), the Company or
  such relevant Affiliate (except for Solid World srl.) then dismisses those
  Sellers who hold directorship position in the Company and/or in any of its
  Affiliates (except for Solid World srl.) from such position and any other
  position the Seller holds in the Company and any of its Affiliates and as
  long as such Seller does not otherwise continue as an officer or employee or
  in any other position in the Company or any Affiliate (other then for just
  cause), then such dismissed Director shall be subject to the non compete
  obligation mentioned above only for a period of 12 months from the date of
  such dismissal. For avoidance of doubt, if the Seller voluntarily terminates
  his position with the Company or any of its Affiliates, the non compete
  obligations shall remain in force for a period of 5 years from the date of
  termination.
|    |                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | 11.2.                           | Each Seller
  undertakes towards the Company and Cimatron not to induce any employee of the
  Company or any of its Affiliates to terminate such employees employment
  therewith and any customer or supplier of the Company to terminate its
  relations with the Company or any of its Affiliates and shall not have any
  contact or relations of any kind with any such customer or supplier in any
  matter competitive to the business of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

- 7 -

---

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12. | No Preference                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Quota
  held by Cimatron shall have all the rights and privileges of the highest rank
  attached to all other Quotas of the highest rank of the Company, including
  without limitation: voting rights, rights to receive dividends, rights to
  receive notice and attend all shareholders meetings, rights to receive all
  distribution upon liquidation or any other distribution of the Company. All
  Shareholders will vote their Quotas to enforce all rights of Cimatron
  hereunder.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|13. | Composition of the Board of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | 13.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | The
  Companys Board of Directors (the Board)
  shall consist of up to five directors to be designated, replaced and removed
  by written notice to the Company as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 13.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Following
  the Effective Date, Cimatron will be entitled to appoint at it sole
  discretion either (i) one director to the Companys Board of Directors and to
  the Board of Directors of each of the Companys Affiliates (except for Solid
  World srl.) and to the Board of Auditors of the Company and its Affiliates
  (except for Solid World srl.) or (ii) one observer (fully entitled to receive
  all information and attend board meetings, but without a right to vote) to
  the Companys Board of Directors and to the Board of Directors of each of the
  Companys Affiliates (except for Solid World srl.). In addition to the
  director appointed by Cimatron, 3 directors shall be appointed by the
  shareholders, which initially shall be E.Gardini, R.Rizzo, A.Morina.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 13.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Following
  the exercise by Cimatron of the First Call Option (or the ownership by
  Cimatron otherwise of 51% of the Company) Cimatron shall be entitled to
  appoint all the directors appointed to the Companys Board of Directors and
  to the Board of Directors of each of the Companys Affiliates (except for Solid
  World srl.); except that the other shareholders of the Company shall be
  entitled to appoint one director to the Board of Directors of the Company as
  long as they hold Quotas in the Company.                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 13.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | The Company
  shall obtain from financially sound and reputable insurers a Directors and
  Officers insurance policy with appropriate coverage satisfactory to
  Cimatron. In addition, the Company shall issue to each of the directors
  appointed by Cimatron an indemnification undertaking providing each such director
  indemnification to the full extent permitted under the law, in the form
  acceptable to Cimatron.                                                                                                                                                                                                                                                                                                                                                              

- 8 -

---

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 13.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Subject to
  the Companys prior approval, all reasonable out-of-pocket expenses incurred
  by all the directors for attending Board and committees meetings and
  performing their duties as directors shall be reimbursed by the Company.
  Board meetings shall be held by telephone conference call. Microsystem shall
  bear travel expenses of the directors appointed by Cimatron if Board meetings
  are held in Italy.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|14. | Conduct of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Since June
  2004 and until the exercise or expiration of the Second Call Option, the
  Company and each of the Affiliates have not and will not perform any action
  not in the ordinary course of business, consistent with past practices,
  without the prior written consent of Cimatron, including without limitations,
  management compensation raise, merger and acquisitions, sale of material
  assets, issuance of Quotas or convertible securities, distribution of
  dividends or other distributions, structural changes, material change in the
  business of the Company or the Affiliates, transactions with or any payments
  or distributions or transfer to the Sellers or any other interested parties
  of any monies.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|15. | Control of Company Following the
  exercise of the First Call Option, the Company and the Sellers shall take any
  action, sign any document and amend the incorporation documents of the
  Company and its Affiliates if necessary in order to give Cimatron a complete
  control of the Company and its Affiliates, as requested by Cimatron at its
  sole discretion.                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|16. | Miscellaneous.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | 16.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 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 (including voting his Quota) and the intentions of the parties as
  reflected thereby.                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | 16.2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Successors
  and Assigns; Assignment. Except as otherwise
  expressly limited herein, the provisions hereof shall inure to the benefit
  of, and be binding upon, the successors, assigns, heirs, executors, and
  administrators of the parties hereto. None of the rights, privileges, or
  obligations of the Sellers set forth in, arising under, or created by this
  Agreement may be assigned or transferred without the prior consent in writing
  of Cimatron. Cimatron may assign or transfer any of its rights, privileges,
  and obligations under this Agreement.

- 9 -

---

---



| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 16.3. | Entire
  Agreement; Amendment and Waiver. This Agreement and
  the Schedules hereto constitute the full and entire understanding and
  agreement between the parties with regard to the subject matters hereof and
  thereof, and supersedes all prior agreements and understandings among or
  between any of the parties relating to the subject matter hereof and thereof,
  except for the Letter of Agreement. Any term of this Agreement may be amended
  and the observance of any term hereof may be waived (either prospectively or
  retroactively and either generally or in a particular instance) with the
  written consent of parties to this Agreement.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 16.4. | 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
  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:                                                                                                                                                                                      

| |                      |                                                                   
| | -------------------- | ------------------------------------------------------------------
| | If to the
  Company: | Microsystem
  Srl.                                                
| |                      | Via
  C.Collodi n.1                                               
| |                      | 40012 Calderara di Reno (BO) -Italy                               
| |                      | Attn: Enrico Gardini                                              
| |                      | Fax: 39
  -051- 4145689                                           
| |                      |                                                                   
| | If to
  Cimatron     | Cimatron
  Ltd.                                                   
| |                      | 11 Gush Etzion St.                                                
| |                      | Givat Shmuel 54030 Israel                                         
| |                      | Attn: Zvi
  Naggan                                                
| |                      | Fax:
  972-3-5312192                                              
| |                      |                                                                   
| | With a copy
  to     | Meitar
  Liquornik Geva & Leshem Brandwein                        
| |                      | 16 Abba Hillel Rd.                                                
| |                      | Ramat Gan 52506 Israel                                            
| |                      | Attn. Ronen
  Bezalel, Adv.                                       
| |                      | Fax:
  972-3-6103111                                              
| |                      |                                                                   
| | If to Gardini        | Enrico Gardini , via Rimodello 16, 40050 Monteveglio (BO)  Italy 
| |                      |                                                                   
| | If to Zega           | Alberto Zega, via Mascarella 116, 40126 Bologna  Italy           
| | If to Rizzo          | Roberto Rizzo, Via Martiri della Libertà 68, 31100 Treviso - Italy

- 10 -

---

---



| |  | 
| |  | 

| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | 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, seven (7) 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 (provided,
  however, that any notice of change of address shall only be valid upon
  receipt).                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 16.5. | 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.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 16.6. | 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.                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 16.7. | Law and
  Jurisdiction. This Agreement will be governed by,
  and construed in accordance with, the laws of the State of Israel, without
  regard to its principles of conflicts of laws and adjudicated exclusively in
  Israel; provided, however, that Cimatron may at its sole discretion also
  initiate a claim in Italy under either Israeli laws or Italian laws at
  Cimatrons choice.                                                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 16.8. | Counterparts.
  This Agreement may be executed in any number of facsimile 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

- 11 -

---

---



IN
WITNESS WHEREOF, the parties hereto have executed this Agreement in one or more
counterparts as of the date and year first above written.

|                 |                      |               |                    |                        
|---------------- | -------------------- | ------------- | ------------------ | -----------------------
|Microsystem Srl. |                      | Cimatron Ltd.
|                 |                      |               |                    |                        
|By:              | /s/ Enrico
  Gardini |               | By:                | /s/ Yossi
  Ben Shalom.
|                 |                      |               |                    |                        
|Name:            |                      |               | By:                | /s/ Zvika Naggan       
|                 |                      |               |                    |                        
|Title:           |                      |               | Name:              |                        
|                 |                      |               |                    |                        
|                 |                      |               | Title:             |                        
|                 |                      |               |                    |                        
|                 |                      |               |                    |                        
|                 | /s/ Enrico
  Gardini |               |                    | /s/ Roberto
  Rizzo    
|                 |                      |               |                    |                        
|                 | Enrico
  Gardini     |               |                    | Roberto
  Rizzo        
|                 |                      |               |                    |                        
|                 | /s/ Alberto
  Zega   |               | ESA Software S.p.A
|                 |                      |               |                    |                        
|                 | Alberto Zega         |               |                    |                        
|                 |                      |               | By:                | /s/ Antonello Morina   
|                 |                      |               |                    |                        
|                 |                      |               | Name:              |                        
|                 |                      |               |                    |                        
|                 |                      |               | Title:             |                        
|                 |                      |               |                    |                        

- 12 -

---

---



FIRST CALL OPTION

to Purchase up
to 23.5 percent of the share capital (Subject to Adjustment) of Microsystem Srl. (the Company) held by
Enrico Gardini, Alberto Zega and Roberto Rizzo at the Exercise Price (as
defined below) per each one percent of the Companys share capital

VOID AFTER 12:00 p.m. (prevailing Tel Aviv
time)

On The Termination Date

THIS IS TO CERTIFY THATCimatron
Ltd. (Holder) or its assignee is
entitled to purchase, subject to the provisions of this Option (the Option), from Enrico Gardini, Alberto Zega
and Roberto Rizzo (the Sellers),
pro rata to their holdings in the Company, at any time on or following the date
hereof (the Effective Date) and
until the date that is 24 months following the Effective Date (the Termination Date), an aggregate of up to
23.5 percent (the Optioned Participation),
of the Companys share capital held as of the Effective Date by Sellers at an
exercise price of US$ 25,500 per each one percent of the Companys share
capital (the Exercise Price).

|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|-- | ------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | EXERCISE OF OPTION
|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|   | 1.1                | Subject to
  the provisions hereof, this Option may be exercised in whole or in part, at
  any time or from time to time on or after the Effective Date and until the
  Termination Date.
|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|   |                    | This Option
  shall be exercised by the Holder by presentation and surrender hereof to the
  Sellers of:                                                                                 
|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|   |                    | (i)                                                                                                                                                                                       | a written
  notice of exercise; and                                                                                                                                                                                                                                                                               
|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|   |                    | (ii)                                                                                                                                                                                      | payment to
  the Sellers of the Exercise Price for the portion of the Optioned
  Participation specified in such notice, upon execution by the Seller and the
  Holder of the deed of transfer of such Optioned participation, with
  authencitated signature, in compliance to the provisions of the Italian law.
|   |                    |                                                                                                                                                                                           |                                                                                                                                                                                                                                                                                                                   
|   |                    | The Exercise
  Price for the Optioned Participation specified in the notice shall be payable
  in immediately available funds, at the option of the Holder, in US dollars.               

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Within 10
  days from the transmission by Holder to Seller of the written notice as of
  point (i) above, and subject to the payment of the Exercise Price for the
  Optioned Participation, the Sellers and the Holder shall execute the deed of
  transfer with authenticated signature and take all other actions required
  under the Italian law in order to validly transfer the Optioned Participation
  and the Company shall record such transfer on its shareholders book
  accordingly. The (i) Sellers and (ii) the Holder shall pay any and all
  expenses, any stamp duty and any other charges that may be payable in
  connection with the transfer of the Optioned Participation pursuant to this
  Paragraph 1.2 in equal parts.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | In order to
  comply with the above mentioned execution of the deed of transfer, Seller
  undertakes to sign the irrevocable mandate agreement for the sale of the
  Optioned Participation, annexed hereto as Annex A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   | 1.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | During the
  period in which this Option is exercisable, the Holder shall be entitled to
  conduct a full due diligence review of the Company and its Affiliates,
  including without limitation, business, legal and financial, and shall
  receive the full cooperation of the Company, its officers and the Sellers.
  This Section 1.2 shall not be interpreted as giving the Holder a right to
  change the Exercise Price.                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   | 1.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Notwithstanding
  anything to the contrary, following the exercise of this Option the Holder
  shall hold at least 51% of the Companys share capital (on a post-money fully
  diluted basis). Upon exercise of the Option, for an aggregate purchase price
  of $599,250, the Sellers shall deliver the Holder 23.5% of the Companys
  share capital or any larger percentage, pro rata to their holdings in the
  Company, so that following the transfer the Holder shall hold 51% of the
  Companys share capital (on a post-money fully diluted basis).                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|2. | RESERVATION OF SHARES; PRESERVATION OF RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   | Sellers
  represent that the Optioned Participation transferable pursuant to the terms
  hereof is duly and validly issued and fully paid and nonassessable, not
  subject to any preemptive rights, rights of first refusal or similar rights
  and as of the Effective Date and upon the exercise of this Option shall be
  free and clear of all liens, encumbrances, equities and claims or any other
  third party rights of any kind or type. The Company and Sellers each agree
  that they will not, by charter amendment or through reorganization,
  consolidation, merger, dissolution or sale of assets, or by any other
  voluntary act, avoid or seek to avoid the observance or performance of any of
  the covenants, stipulations or conditions to be observed or performed
  hereunder by the Company or the Sellers, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|3. | EXCHANGE OR LOSS OF OPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   | Upon receipt by Sellers of evidence reasonably satisfactory to it of
  the loss, theft, destruction or mutilation of this Option, and (in the case
  of loss, theft or destruction) of reasonably satisfactory indemnification,
  and upon surrender and cancellation of this Option, if mutilated, Sellers
  will execute and deliver a new Option of like tenor and date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|4. | ADJUSTMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|   | 4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Reorganization, Reclassification, Merger, Consolidation or
  Disposition of Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

- 2 -

---

---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | In case the
  Company shall reorganize its capital, reclassify its capital stock,
  consolidate or merge with or into another corporation or sell, transfer or
  otherwise dispose of all or substantially all of its property, assets or
  business to another corporation and pursuant to the terms of such
  reorganization, reclassification, merger, consolidation or disposition of
  assets, (i) shares of capital stock of the successor or acquiring corporation
  or of the Company (if it is the surviving corporation) or (ii) any cash,
  shares of stock or other securities or property of any nature whatsoever
  (including Options or other subscription or purchase rights) in addition to
  or in lieu of capital stock of the successor or acquiring corporation (Other Property) are to be received by or
  distributed to the quotaholders of the Company who are holders immediately
  prior to such transaction, then the Holder shall have the right thereafter to
  receive from Sellers, upon exercise of this Option, the number of shares of
  capital stock or quota of the successor or acquiring corporation or of the
  Company, if it is the surviving corporation, and Other Property receivable
  upon or as a result of such reorganization, reclassification, merger, consolidation
  or disposition of assets by a holder of the percentage of the share capital
  or quota of the Company for which this Option is exercisable immediately
  prior to such event.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | In case of
  any such reorganization, reclassification, merger, consolidation or
  disposition of assets, the successor or acquiring corporation shall expressly
  assume the due and punctual observance and performance of each and every
  covenant and condition of this Option to be performed and observed by the
  Company and all the obligations and liabilities hereunder, subject to such
  modifications as may be deemed appropriate (as determined by resolution of
  the Board of Directors of the Company) in order to provide for adjustments of
  the percentage of the share capital of the Company for which this Option is
  exercisable, which modifications shall be as nearly equivalent as practicable
  to the adjustments provided for in this Section 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | The
  provisions of this subsection 4.4 shall similarly apply to successive reorganizations,
  reclassifications, mergers, consolidations or disposition of assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4.2 | Other
  Dilutive Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | In case any
  event shall occur as to which the preceding subsection 4.1 is not strictly
  applicable but as to which the failure to make any adjustment would not
  fairly protect the purchase rights represented by this Option in accordance
  with the essential intent and principles hereof then, in each such case, the
  Holder and the Sellers shall, in good faith, determine what adjustments are necessary
  to preserve the purchase rights of the Holder represented by this Option.

- 3 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                     | 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|5. | NOTICE OF CERTAIN EVENTS                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                     | 
|   | The Holder shall be entitled to the same rights to receive notices of
  corporate actions as any quotaholder as provided in the Companys Articles of
  Association and Bylaws or otherwise. Notwithstanding, in case at any time:                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                     | 
|   | 5.1.                                                                                                                                                                                                                                                                                                                                                                                                                              | There shall
  be any merger of the Company with, or any statutory exchange of the Companys
  capital with the securities of, or sale of all or substantially all of its
  assets to, another corporation; or                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                     | 
|   | 5.2.                                                                                                                                                                                                                                                                                                                                                                                                                              | There shall
  be a voluntary or involuntary dissolution, liquidation or winding up of the
  Company;                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | then, in any
  one or more of such cases, the Company shall give written notice, by first
  class mail, postage prepaid, addressed to the Holder at the address of the
  Holder as shown on the books of the Company, of the date on which such
  merger, exchange, sale, dissolution, liquidation or winding up shall take
  place, as the case may be.                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Such notice
  shall also specify the date as of which the quotaholders of record shall be
  entitled to exchange their quota for securities or other property deliverable
  upon such merger, exchange, sale, dissolution, liquidation or winding up, as
  the case may be. Such written notice shall be given at least twenty (20) days
  prior to the action in question.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6. | NOTICE OF ADJUSTMENTS                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Whenever
  this Option is adjusted as provided in paragraph 4 hereof, the Company shall
  promptly compute such adjustment and mail to the Holder at the last address
  provided to the Company in writing a certificate, signed by the Sellers,
  setting forth such adjustment, a brief statement of the facts requiring such
  adjustment and the computation thereof and when such adjustment has or will
  become effective.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|7. | RIGHTS OF THE HOLDER                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                     | 
|   | 7.1.                                                                                                                                                                                                                                                                                                                                                                                                                              | Without
  limiting the foregoing or any remedies available to the Holder, the Holder
  will be entitled to specific performance of the obligations hereunder, and
  injunctive relief against actual or threatened violations of the obligations
  of any person subject to this Option.                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | 7.2.                                                                                                                                                                                                                                                                                                                                                                                                                              | This Option
  shall not entitle the Holder to any additional voting rights or other rights
  as a quotaholder of the Company whatsoever, except the rights expressed herein
  in addition to the rights the Holder already has in the Companys share
  capital and no dividend or interest shall be payable or accrue in respect of
  this Option.

- 4 -

---

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------
|8.  | TRANSFER OF OPTION; RESTRICTIONS ON TRANSFERABILITY OF SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | This Option may be transferred or assigned by the Holder. The
  Optioned Participation may not be transferred by the Sellers other than
  pursuant to the terms of this Option Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|9.  | NOTICE GENERALLY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Any notice,
  demand, request, consent, approval, declaration, delivery or communication
  hereunder to be made pursuant to the provisions of this Option shall be
  sufficiently given or made if in writing and shall be deemed to have been
  validly served, given or delivered (a) when sent after receipt of confirmation
  or answer back if sent by telex or telecopy or other similar facsimile
  transmission, (b) two (2) business days after deposit with a reputable
  international two (2) day courier with all charges prepaid or (c) when
  delivered if hand-delivered by messenger, all of which shall be properly
  addressed to the party to be notified and sent to the address or number
  indicated, to the Holder at its last known address appearing on the books of
  the Company maintained for such purpose, to the Company at:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | [ via Collodi n.1 , 40012 Calderara di Reno (BO)  Italy]          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | and to Seller                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | [EnricoGardini, via Rimodello 16, 40050 Monteveglio (BO)  Italy   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Alberto Zega, via Mascarella 116, 40126 Bologna - Italy            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Roberto Rizzo, Via Martiri della Libertà 68, 31100 Treviso  Italy]
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                    
|    | or at such
  other address as may be submitted by notice given as herein provided. The
  giving of any notice required hereunder may be waived in writing by the party
  entitled to receive such notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10. | TERMINATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | This Option
  and the rights conferred hereby shall terminate on the Termination Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|11. | GOVERNING LAW                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | This Option
  will be governed by, and construed in accordance with, the laws of the State
  of Israel, without regard to its principles of conflicts of laws and
  adjudicated exclusively in Israel; provided, however, that the Holder may at
  its sole discretion also initiate a claim in Italy under either Israeli laws
  or Italian laws at the Holders choice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

- 5 -

---

---



|                   |                         |                   | 
|------------------ | ----------------------- | ----------------- | 
|DATED:             | 1 July, 2005            |                   | 
|                   |                         |                   | 
|Enrico Gardini     |                         | Roberto Rizzo    
|                   |                         |                  
|/s/ Enrico Gardini |                         | /s/ Roberto Rizzo
|                   |                         |                  
|                  
|Alberto Zega       |                         |                  
|                   |                         |                  
|/s/ Alberto Zega   |                         |                  
|                   |                         |                  
|                   |                         |                  
|MICROSYSTEM S.R.L. |                         |                  
|                   |                         |                   | 
|By:                | /s/ Enrico
  Gardini    |                   | 
|                   |                         |                   | 
|Name:              |                         |                   | 
|                   |                         |                   | 
|Title:             |                         |                   | 
|                   |                         |                   | 
|                   |                         |                   | 
|CIMATRON Ltd       |                         |                  
|                   |                         |                  
|By:                | /s/ Yossi
  Ben Shalom. |                   | 
|                   |                         |                   | 
|                   | /s/ Zvika
  Naggan      |                   | 
|                   |                         |                   | 
|Name:              |                         |                   | 
|                   |                         |                   | 
|Title:             |                         |                   | 
|                   |                         |                   | 

- 6 -

---

---



Second CALL OPTION

to Purchase up
to 49 percent of the share capital (Subject to Adjustment) of Microsystem Srl. (the Company) from
Enrico Gardini, Alberto Zega, Roberto Rizzo and Esa Software S.p.A at the
Exercise Price (as defined below) per each one percent of the Companys share
capital

VOID AFTER 12:00 p.m. (prevailing Tel Aviv
time)

On The Termination Date

THIS IS TO CERTIFY THATCimatron
Ltd. (Holder) or its assignee is
entitled to purchase, subject to the provisions of this Option (the Option), from Enrico Gardini, Alberto
Zega, Roberto Rizzo and Esa Software S.p.A (the Sellers), pro rata to their holdings in the Company, at any
time on or following the expiration of twelve (12) months from the Second
Closing (as defined below) (the Effective
Date) until the date that is 30 days following the Effective Date
(the Termination Date), an
aggregate of up to 49 percent (the Optioned
Participation), of the Companys share capital as of the date of
exercise of this Second Call Option from the Sellers at an exercise price of
US$ 25,500 per each one percent of the Companys share capital (the Exercise Price).

|   |                   
|-- | ------------------
|1. | EXERCISE OF OPTION

| |      |                                                                                                                                                                                                                                                                                                                                                                                            
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.1. | Second
  Closing shall be defined as the final date of the exercise in full of the
  option of the Holder to purchase 23.5% of the capital of the Company from
  Enrico Gardini, Alberto Zega and Roberrto Rizzo (the First Call Option).
  This Second Call Option may not be exercised, in whole or in part, unless the
  First Call Option has been exercised in full by the Holder.
| |      |                                                                                                                                                                                                                                                                                                                                                                                            
| | 1.2. | Subject to
  the provisions hereof, this Option may be exercised in whole or in part, at
  any time or from time to time on or after the Effective Date and until the
  Termination Date.                                                                                                                                                                                                  
| |      |                                                                                                                                                                                                                                                                                                                                                                                            
| |      | This Option
  shall be exercised by the Holder by presentation and surrender hereof to the
  Sellers of:                                                                                                                                                                                                                                                                                   

| |                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
  a written notice of exercise; and                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                        
| | (ii)
  payment to the Sellers of the Exercise Price for the portion of the Optioned
  Participation specified in such notice, upon execution by the Seller and the
  Holder of the deed of transfer of such Optioned participation, with
  authencitated signature, in compliance to the provisions of the Italian law.
| |                                                                                                                                                                                                                                                                                                                        
| | The Exercise
  Price for the Optioned Participation specified in the notice shall be payable
  in immediately available funds, at the option of the Holder, in US dollars.                                                                                                                                             

---

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Within 10
  days from the transmission by Holder to Seller of the written notice as of
  point (i) above, and subject to the payment of the Exercise Price for the
  Optioned Participation, the Sellers and the Holder shall execute the deed of
  transfer with authenticated signature and take all other actions required
  under the Italian law in order to validly transfer the Optioned Participation
  and the Company shall record such transfer on its shareholders book
  accordingly. The (i) Sellers and (ii) the Holder shall pay any and all
  expenses, any stamp duty and any other charges that may be payable in
  connection with the transfer of the Optioned Participation pursuant to this
  Paragraph 1.2 in equal parts.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | In order to
  comply with the above mentioned execution of the deed of transfer, each
  Seller undertakes to sign the irrevocable mandate agreement for the sale of
  the Optioned Participation, annexed hereto as Annex A.                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 1.3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | During the
  period in which this Option is exercisable, the Holder shall be entitled to
  conduct a full due diligence review of the Company and its Affiliates,
  including without limitation, business, legal and financial, and shall
  receive the full cooperation of the Company, its officers and the Sellers.
  This Section 1.2 shall not be interpreted as giving the Holder a right to
  change the Exercise Price.                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 1.4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Notwithstanding
  anything to the contrary, following the exercise of this Option the Holder
  shall hold all of the Companys share capital. Upon exercise of the Option,
  for an aggregate purchase price of $1,249,500, the Sellers shall deliver the
  Holder 49% of the Companys share capital or any larger percentage, pro rata
  to their holdings in the Company, so that following the transfer the Holder
  shall hold all of the Companys share capital as of the date of exercise of
  this Second Call Option.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | RESERVATION OF SHARES; PRESERVATION OF RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Sellers
  represent that the Optioned Participation transferable pursuant to the terms
  hereof is duly and validly issued and fully paid and nonassessable, not
  subject to any preemptive rights, rights of first refusal or similar rights
  and as of the Effective Date and upon the exercise of this Option shall be
  free and clear of all liens, encumbrances, equities and claims or any other
  third party rights of any kind or type. The Company and Sellers each agree
  that they will not, by charter amendment or through reorganization,
  consolidation, merger, dissolution or sale of assets, or by any other
  voluntary act, avoid or seek to avoid the observance or performance of any of
  the covenants, stipulations or conditions to be observed or performed
  hereunder by the Company or the Sellers, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | EXCHANGE OR LOSS OF OPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Upon receipt by Sellers of evidence reasonably satisfactory to it of
  the loss, theft, destruction or mutilation of this Option, and (in the case
  of loss, theft or destruction) of reasonably satisfactory indemnification,
  and upon surrender and cancellation of this Option, if mutilated, Sellers
  will execute and deliver a new Option of like tenor and date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

- 2 -

---

---



|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | ADJUSTMENT
|   |           
|   | 4.1.       | Reorganization, Reclassification, Merger, Consolidation or
  Disposition of Assets                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |           
|   |            | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In case the
  Company shall reorganize its capital, reclassify its capital stock,
  consolidate or merge with or into another corporation or sell, transfer or
  otherwise dispose of all or substantially all of its property, assets or
  business to another corporation and pursuant to the terms of such
  reorganization, reclassification, merger, consolidation or disposition of
  assets, (i) shares of capital stock of the successor or acquiring corporation
  or of the Company (if it is the surviving corporation) or (ii) any cash,
  shares of stock or other securities or property of any nature whatsoever
  (including Options or other subscription or purchase rights) in addition to
  or in lieu of capital stock of the successor or acquiring corporation (Other Property) are to be received by or
  distributed to the quotaholders of the Company who are holders immediately
  prior to such transaction, then the Holder shall have the right thereafter to
  receive from Sellers, upon exercise of this Option, the number of shares of
  capital stock or quota of the successor or acquiring corporation or of the
  Company, if it is the surviving corporation, and Other Property receivable
  upon or as a result of such reorganization, reclassification, merger,
  consolidation or disposition of assets by a holder of the percentage of the
  share capital or quota of the Company for which this Option is exercisable
  immediately prior to such event.
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |            | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In case of
  any such reorganization, reclassification, merger, consolidation or
  disposition of assets, the successor or acquiring corporation shall expressly
  assume the due and punctual observance and performance of each and every
  covenant and condition of this Option to be performed and observed by the
  Company and all the obligations and liabilities hereunder, subject to such
  modifications as may be deemed appropriate (as determined by resolution of
  the Board of Directors of the Company) in order to provide for adjustments of
  the percentage of the share capital of the Company for which this Option is
  exercisable, which modifications shall be as nearly equivalent as practicable
  to the adjustments provided for in this Section 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |            | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | The
  provisions of this subsection 4.4 shall similarly apply to successive
  reorganizations, reclassifications, mergers, consolidations or disposition of
  assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 4.2.       | Other
  Dilutive Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |            | In case any
  event shall occur as to which the preceding subsection 4.1 is not strictly
  applicable but as to which the failure to make any adjustment would not
  fairly protect the purchase rights represented by this Option in accordance
  with the essential intent and principles hereof then, in each such case, the
  Holder and the Sellers shall, in good faith, determine what adjustments are
  necessary to preserve the purchase rights of the Holder represented by this
  Option.

- 3 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | NOTICE OF CERTAIN EVENTS                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Holder shall be entitled to the same rights to receive notices of
  corporate actions as any quotaholder as provided in the Companys Articles of
  Association and Bylaws or otherwise. Notwithstanding, in case at any time:                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 5.1.                                                                                                                                                                                                                                                                                                                                                                                                                              | There shall
  be any merger of the Company with, or any statutory exchange of the Companys
  capital with the securities of, or sale of all or substantially all of its
  assets to, another corporation; or                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | 5.2.                                                                                                                                                                                                                                                                                                                                                                                                                              | There shall
  be a voluntary or involuntary dissolution, liquidation or winding up of the
  Company;                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | then, in any
  one or more of such cases, the Company shall give written notice, by first
  class mail, postage prepaid, addressed to the Holder at the address of the
  Holder as shown on the books of the Company, of the date on which such
  merger, exchange, sale, dissolution, liquidation or winding up shall take
  place, as the case may be.                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Such notice
  shall also specify the date as of which the quotaholders of record shall be
  entitled to exchange their quota for securities or other property deliverable
  upon such merger, exchange, sale, dissolution, liquidation or winding up, as
  the case may be. Such written notice shall be given at least twenty (20) days
  prior to the action in question.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6. | NOTICE OF ADJUSTMENTS                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Whenever
  this Option is adjusted as provided in paragraph 4 hereof, the Company shall
  promptly compute such adjustment and mail to the Holder at the last address
  provided to the Company in writing a certificate, signed by the Sellers,
  setting forth such adjustment, a brief statement of the facts requiring such
  adjustment and the computation thereof and when such adjustment has or will
  become effective.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|7. | RIGHTS OF THE HOLDER                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | 7.1.                                                                                                                                                                                                                                                                                                                                                                                                                              | Without
  limiting the foregoing or any remedies available to the Holder, the Holder
  will be entitled to specific performance of the obligations hereunder, and
  injunctive relief against actual or threatened violations of the obligations
  of any person subject to this Option.                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                    
|   | 7.2.                                                                                                                                                                                                                                                                                                                                                                                                                              | This Option
  shall not entitle the Holder to any additional voting rights or other rights
  as a quotaholder of the Company whatsoever, except the rights expressed
  herein in addition to the rights the Holder already has in the Companys
  share capital and no dividend or interest shall be payable or accrue in
  respect of this Option.

- 4 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|8. | TRANSFER OF OPTION; RESTRICTIONS ON TRANSFERABILITY OF SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | This Option may be transferred or assigned by the Holder. The
  Optioned Participation may not be transferred by the Sellers other than
  pursuant to the terms of this Option Agreement.                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9. | NOTICE GENERALLY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Any notice,
  demand, request, consent, approval, declaration, delivery or communication
  hereunder to be made pursuant to the provisions of this Option shall be
  sufficiently given or made if in writing and shall be deemed to have been
  validly served, given or delivered (a) when sent after receipt of
  confirmation or answer back if sent by telex or telecopy or other similar
  facsimile transmission, (b) two (2) business days after deposit with a
  reputable international two (2) day courier with all charges prepaid or
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (c) when
  delivered if hand-delivered by messenger, all of which shall be properly
  addressed to the party to be notified and sent to the address or number
  indicated, to the Holder at its last known address appearing on the books of
  the Company maintained for such purpose, to the Company at:                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [ via Collodi n.1 , 40012
  Calderara di Reno (BO)  Italy]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | and to Seller                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [EnricoGardini, via Rimodello 16,
  40050 Monteveglio (BO)  Italy
  Alberto Zega, via Mascarella 116, 40126 Bologna - Italy               
  Roberto Rizzo, Via Martiri della Libertà 68, 31100 Treviso  ItalyEsa Software S.p.A., via Draghi 39, 47900 Rimini -
Italy]                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | or at such
  other address as may be submitted by notice given as herein provided. The
  giving of any notice required hereunder may be waived in writing by the party
  entitled to receive such notice.                                                                                                                                                                                                                                                                                                                                        

|    |                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | TERMINATION                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                          
|    | This Option
  and the rights conferred hereby shall terminate on the Termination Date.                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                          
|11. | GOVERNING LAW                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                          
|    | This Option
  will be governed by, and construed in accordance with, the laws of the State
  of Israel, without regard to its principles of conflicts of laws and
  adjudicated exclusively in Israel; provided, however, that the Holder may at
  its sole discretion also initiate a claim in Italy under either Israeli laws
  or Italian laws at the Holders choice.

- 5 -

---

---



|                   |              |                      |                        | 
|------------------ | ------------ | -------------------- | ---------------------- | 
|DATED:             | 1 July, 2005 |                     
|                  
|Enrico Gardini     |              | Roberto Rizzo       
|                   |              |                     
|/s/ Enrico Gardini |              |                     
|                   |              | /s/ Roberto Rizzo   
|                   |              |                     
|Alberto Zega       |              |                     
|                   |              | Esa Software
  S.p.A
|/s/ Alberto Zega   |              |                      |                       
|                   |              | By:                  | /s/
  Antonello Morina
|                   |              |                      |                       
|                   |              | Name:                |                       
|                   |              |                      |                       
|                   |              | Title:               |                       
|                   |              |                      |                       

|                   |                     
|------------------ | --------------------
|MICROSYSTEM S.R.L.
|                  
|By:                | /s/ Enrico
  Gardini
|                   |                     
|Name:              |                     
|                   |                     
|Title:             |                     
|                   |                     

|             |                        
|------------ | -----------------------
|CIMATRON Ltd
|            
|By:          | /s/ Yossi
  Ben Shalom.
|             |                        
|             | /s/ Zvika Naggan       
|             |                        
|Name:        |                        
|             |                        
|Title:       |                        
|             |                        

- 6 -

---

---



PUT OPTION

to Sell 49
percent of the share capital (Subject to Adjustment) of Microsystem Srl.(the Company) by Enrico Gardini,
Alberto Zega,
Roberto Rizzo and Esa Software S.p.A to Cimatron Ltd. at the Exercise Price (as
defined below) per each one percent of the Companys share capital, subject to
the exercise of the First Call Option (as defined below) by Cimatron Ltd.

VOID AFTER 12:00 p.m. (prevailing Tel Aviv
time)

On The Termination Date

THIS IS TO CERTIFY THAT,
subject to the provisions of this Option (the Option) including, without limitation, Section 1.4, Enrico
Gardini, Alberto Zega, Roberto Rizzo and Esa Software S.p.A (the Sellers), are entitled to sell to Cimatron
Ltd. (Cimatron) pro rata to
their holdings in the Company, at any time on or following the expiration of
twelve (12) months from the Second Closing (as defined below) (the Effective Date) until the date that is 30
days following the Effective Date (the Termination
Date), an aggregate of 49 percent (the Optioned Participation) of the Companys share capital as of
the date of exercise of this Second Call Option from the Sellers at an exercise
price of US$ 25,500 per each one percent of the Companys share capital (the Exercise Price).

|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|-- | ------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|1. | EXERCISE OF OPTION
|   |                   
|   | 1.1                | Second
  Closing shall be defined as the final date of the exercise in full of the
  option of Cimatron to purchase 23.5% of the capital of the Company from
  Enrico Gardini, Alberto Zega and Roberrto Rizzo (the First Call Option).
  Notwithstanding anything to the contrary, this Put Option may only be
  exercised, if (i) the First Call Option has been exercised in full by
  Cimatron, at Cimatrons sole discretion, and (ii) the Sellers and the Company
  have not breached any of their represntations and covenants contained in the
  Letter of Agreement dated May 24, 2005 between the Company, Cimatron and the
  Sellers.
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                    | Upon
  verficication of the conditions of points (i) and (ii) above of the present
  article, Cimatron undertakes to sign an irrevocable mandate agreement with
  such indivudal indicated to Cimatron by the Sellers (Mandatory), by virtue
  of which Cimatron shall confer to the Mandatory the irrevocable mandate to
  buy from the Sellers, at the terms and conditions of this Put Option
  agreement, the Optioned Participation.                                                                                                                                                                                                         
|   |                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 1.2                | Subject to
  the provisions hereof, this Option may be exercised in whole and not in part
  at any time on or after the Effective Date and until the Termination Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     | This Option
  shall be exercised by the Sellers by (i) presentation and surrender hereof to
  Cimatron of written notice of exercise and (ii) execution by the Sellers and
  Cimatron of the deed of transfer of such Optioned participation, with
  authencitated signature, in compliance to the provisions of the Italian law.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     | The Exercise
  Price for the Optioned Participation specified in the notice shall be payable
  in immediately available funds, at the option of the Cimatron, in US dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Within 10
  days from the transmission by Seller to Cimatron of the written notice as of
  point (i) above, and subject to the payment of the Exercise Price for the
  Optioned Participation, the Sellers and Cimatron shall execute the deed of
  transfer with authenticated signature and take all other actions required
  under the Italian law in order to validly transfer the Optioned Participation
  and the Company shall record such transfer on its shareholders book
  accordingly. The (i) Sellers and (ii) the Holder shall pay any and all
  expenses, any stamp duty and any other charges that may be payable in
  connection with the transfer of the Optioned Participation pursuant to this
  Paragraph 1.2 in equal parts.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 1.3                                                                                                                                                                                                                                                                                                                                                                                                                                                 | During the
  period in which this Option is exercisable, Cimatron shall be entitled to
  conduct a full due diligence review of the Company and its Affiliates,
  including without limitation, business, legal and financial, and shall
  receive the full cooperation of the Company, its officers and the Sellers.
  This Section 1.2 shall not be interpreted as giving the Holder a right to
  change the Exercise Price.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 1.4                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Notwithstanding
  anything to the contrary, following the exercise of this Option Cimatron
  shall hold all of the Companys share capital. Upon exercise of the Option,
  and payment of $1,249,500 by Cimatron, the Sellers shall deliver Cimatron 49%
  of the Companys share capital or any larger percentage, pro rata to their
  holdings in the Company, so that following the transfer Cimatron shall hold
  all of the Companys share capital as of the date of exercise of this Put
  Option.                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | RESERVATION OF SHARES; PRESERVATION OF RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Sellers
  represent that the Optioned Participation transferable pursuant to the terms
  hereof is duly and validly issued and fully paid and nonassessable, not
  subject to any preemptive rights, rights of first refusal or similar rights
  and as of the Effective Date and upon the exercise of this Option shall be
  free and clear of all liens, encumbrances, equities and claims or any other
  third party rights of any kind or type.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | EXCHANGE OR LOSS OF OPTION                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Upon receipt by Cimatron of evidence reasonably satisfactory to it of
  the loss, theft, destruction or mutilation of this Option, and (in the case
  of loss, theft or destruction) of reasonably satisfactory indemnification,
  and upon surrender and cancellation of this Option, if mutilated, Cimatron
  will execute and deliver a new Option of like tenor and date.                                                                      

- 2 -

---

---



|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | ADJUSTMENT
|   |           
|   | 4.1        | Reorganization, Reclassification, Merger, Consolidation or
  Disposition of Assets                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |            | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | In case the
  Company shall reorganize its capital, reclassify its capital stock,
  consolidate or merge with or into another corporation or sell, transfer or
  otherwise dispose of all or substantially all of its property, assets or
  business to another corporation and pursuant to the terms of such
  reorganization, reclassification, merger, consolidation or disposition of
  assets, (i) shares of capital stock of the successor or acquiring corporation
  or of the Company (if it is the surviving corporation) or (ii) any cash,
  shares of stock or other securities or property of any nature whatsoever
  (including Options or other subscription or purchase rights) in addition to
  or in lieu of capital stock of the successor or acquiring corporation (Other Property) are to be received by or
  distributed to the quotaholders of the Company who are holders immediately
  prior to such transaction, then Cimatron shall have the right thereafter to
  receive from Sellers, upon exercise of this Option by the Sellers, the number
  of shares of capital stock or quota of the successor or acquiring corporation
  or of the Company, if it is the surviving corporation, and Other Property
  receivable upon or as a result of such reorganization, reclassification,
  merger, consolidation or disposition of assets by a holder of the percentage
  of the share capital or quota of the Company for which this Option is
  exercisable immediately prior to such event.
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |            | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | In case of
  any such reorganization, reclassification, merger, consolidation or
  disposition of assets, the successor or acquiring corporation shall expressly
  assume the due and punctual observance and performance of each and every
  covenant and condition of this Option to be performed and observed by the
  Company and all the obligations and liabilities hereunder, subject to such
  modifications as may be deemed appropriate (as determined by resolution of
  the Board of Directors of the Company) in order to provide for adjustments of
  the percentage of the share capital of the Company for which this Option is
  exercisable, which modifications shall be as nearly equivalent as practicable
  to the adjustments provided for in this Section 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |            | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | The
  provisions of this subsection 4.4 shall similarly apply to successive
  reorganizations, reclassifications, mergers, consolidations or disposition of
  assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 4.2        | Other
  Dilutive Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |            | In case any
  event shall occur as to which the preceding subsection 4.1 is not strictly
  applicable but as to which the failure to make any adjustment would not
  fairly protect the rights represented by this Option in accordance with the
  essential intent and principles hereof then, in each such case, Cimatron and
  the Sellers shall, in good faith, determine what adjustments are necessary to
  preserve the purchase rights of the Sellers and cimatron represented by this
  Option.

- 3 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | NOTICE OF CERTAIN EVENTS                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cimatron and the Sellers shall be entitled to the same rights to
  receive notices of corporate actions as any quotaholder as provided in the
  Companys Articles of Association and Bylaws or otherwise. Notwithstanding,
  in case at any time:                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 5.1.                                                                                                                                                                                                                                                                                                                                                                                                                            | There shall
  be any merger of the Company with, or any statutory exchange of the Companys
  capital with the securities of, or sale of all or substantially all of its
  assets to, another corporation; or                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                      
|   | 5.2.                                                                                                                                                                                                                                                                                                                                                                                                                            | There shall
  be a voluntary or involuntary dissolution, liquidation or winding up of the
  Company;                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                      
|   | then, in any
  one or more of such cases, the Company shall give written notice, by first
  class mail, postage prepaid, addressed to Cimatron and the Sellers at the
  address of Cimatron and the Sellers as shown on the books of the Company, of
  the date on which such merger, exchange, sale, dissolution, liquidation or
  winding up shall take place, as the case may be.                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Such notice
  shall also specify the date as of which the quotaholders of record shall be
  entitled to exchange their quota for securities or other property deliverable
  upon such merger, exchange, sale, dissolution, liquidation or winding up, as
  the case may be. Such written notice shall be given at least twenty (20) days
  prior to the action in question.                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|6. | NOTICE OF ADJUSTMENTS                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Whenever
  this Option is adjusted as provided in paragraph 4 hereof, the Company shall
  promptly compute such adjustment and mail to Cimatron at the last address
  provided to the Company in writing a certificate, signed by the Sellers,
  setting forth such adjustment, a brief statement of the facts requiring such adjustment
  and the computation thereof and when such adjustment has or will become
  effective.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|7. | RIGHTS OF THE SELLERS                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 7.1.                                                                                                                                                                                                                                                                                                                                                                                                                            | Without
  limiting the foregoing or any remedies available to the Sellers, the Sellers
  will be entitled to specific performance of the obligations hereunder, and
  injunctive relief against actual or threatened violations of the obligations
  of any person subject to this Option.                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                      
|   | 7.2.                                                                                                                                                                                                                                                                                                                                                                                                                            | This Option
  shall not entitle the Sellers to any additional voting rights or other rights
  as a quotaholder of the Company whatsoever, except the rights expressed
  herein in addition to the rights the Sellers already has in the Companys
  share capital and no dividend or interest shall be payable or accrue in
  respect of this Option.

- 4 -

---

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|8. | TRANSFER OF OPTION; RESTRICTIONS ON TRANSFERABILITY OF SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | This Option may not be transferred or assigned by the
  Sellers. The Optioned
  Participation may not be transferred by the Sellers other than pursuant to
  the terms of this Option Agreement.                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9. | NOTICE GENERALLY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Any notice,
  demand, request, consent, approval, declaration, delivery or communication
  hereunder to be made pursuant to the provisions of this Option shall be
  sufficiently given or made if in writing and shall be deemed to have been
  validly served, given or delivered (a) when sent after receipt of
  confirmation or answer back if sent by telex or telecopy or other similar
  facsimile transmission, (b) two (2) business days after deposit with a
  reputable international two (2) day courier with all charges prepaid or
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (c) when
  delivered if hand-delivered by messenger, all of which shall be properly
  addressed to the party to be notified and sent to the address or number
  indicated, to Cimatron at its last known address appearing on the books of
  the Company maintained for such purpose, to the Company at:                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [ via Collodi n.1 , 40012
  Calderara di Reno (BO)  Italy]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | and to Seller                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|    |                                                                                                                                                                                                                                                                                                                                                                       | 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    | [EnricoGardini, via Rimodello 16, 40050 Monteveglio (BO)  Italy
  Alberto Zega, via Mascarella 116, 40126 Bologna - Italy 
  Roberto Rizzo, Via Martiri della Libertà 68, 31100 Treviso  Italy 
  Esa Software S.p.A., via Draghi 39, 47900 Rimini - Italy]                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                       | 
|    | Cimatron Ltd. 
  11 Gush Etzion St. Givat Shmuel, 54030 Israel 
  Attn: CEO                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                       | 
|    | or at such other
  address as may be submitted by notice given as herein provided. The giving of
  any notice required hereunder may be waived in writing by the party entitled
  to receive such notice.                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                      
|10. | TERMINATION                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                      
|    | This Option
  and the rights conferred hereby shall terminate on the Termination Date.                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                      
|11. | GOVERNING LAW                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                      
|    | This Option
  will be governed by, and construed in accordance with, the laws of the State
  of Israel, without regard to its principles of conflicts of laws and
  adjudicated exclusively in Israel; provided, however, that Cimatron may at
  its sole discretion also initiate a claim in Italy under either Israeli laws
  or Italian laws at Cimatrons choice.

- 5 -

---

---



|                   |              |                     
|------------------ | ------------ | --------------------
|DATED:             | 1 July, 2005 |                     
|                  
|Enrico Gardini     |              | Roberto Rizzo       
|                   |              |                     
|/s/ Enrico Gardini |              |                     
|                   |              | /s/ Roberto Rizzo   
|                   |              |                     
|Alberto Zega       |              |                     
|                   |              | Esa Software
  S.p.A
|/s/ Alberto Zega   |              |                     
|                   |              | By:                 
|                   |              |                     
|                   |              | Name:               
|                   |              |                     
|                   |              | Title:              
|                   |              |                     

|                   |                     
|------------------ | --------------------
|MICROSYSTEM S.R.L.
|                  
|By:                | /s/ Enrico
  Gardini
|                   |                     
|Name:              |                     
|                   |                     
|Title:             |                     
|                   |                     

|             |                        
|------------ | -----------------------
|CIMATRON Ltd
|            
|By:          | /s/ Yossi
  Ben Shalom.
|             |                        
|             | /s/ Zvika Naggan       
|             |                        
|Name:        |                        
|             |                        
|Title:       |                        
|             |                        

- 6 -

---

---