20-F










Exhibit 4.8  



SHARE PURCHASE
AGREEMENT  



        This
Agreement (the “Agreement”) is made as of October 30, 2007, by and among
Donald Levi and Andrew Levi (mutually the “Sellers”); B.O.S Better
Online Solutions Ltd., an Israeli company No. 520042565, having its address at 20 Freiman
Street Rishon LeZion, 75100 (the “Purchaser”); and Summit Radio Corp., a
New Jersey corporation, having its address at 1008 Teaneck Road, Teaneck, New Jersey
07666 (the “Company”). 




W I T N E S S E T H : 



        WHEREAS,
 the Sellers are the owners of 100% of the issued and outstanding capital stock in the
Company; and




        WHEREAS,
the Sellers wish to sell to the Purchaser, in the aggregate, 20 shares of common stock of
the Company, no par value (the “Company Shares”), representing 100%, as
of Closing (as defined below), of the issued and outstanding capital stock of the Company;
and 



        WHEREAS,
the Purchaser wishes to acquire such Company Shares in accordance with the terms of this
Agreement; and  




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




	1.  	Sale
and Purchase of Shares. 






	 	1.1 	General.
Each Seller, severally and not jointly, shall sell, at the Closing, to the Purchaser, and
the Purchaser shall purchase, at the Closing, all rights, title and interest in each
Seller’s Sold Shares (as defined below) on the terms of this Agreement, free from
all claims, liens, charges, pledges, security interests, encumbrances and third party
rights of any kind (the “Security Interests”), other than as currently
existing under the Company’s certificate of incorporation, as amended (the “Certificate
of Incorporation”) and/or bylaws, as amended (the “Bylaws”),
together with all rights, preferences and privileges attaching to, or conferred by, them.
“Sold Shares” shall mean, in relation to a Seller, the Company Shares
set forth opposite such Seller’s name in Schedule A. 






	 	1.2 	Closing
Consideration. Subject to Closing, the Purchaser shall, in consideration for the
purchase from each Seller of the Sold Shares: (i) issue to the relevant Seller ordinary
shares nominal value NIS 4.00 each, of the Purchaser, as set forth in Schedule A (the
“Consideration Shares”), such Consideration Shares to be placed in
escrow as set forth below, and (ii) pay to the relevant Seller cash in the amount set
forth in Schedule A  hereto (the “Cash Payment”). 














	 	
At
Closing, the Consideration Shares will be placed into escrow with the office of GREENBERG
TRAURIG, P.A. (the “Shares Escrow Agent”), pursuant to an escrow
agreement in the form attached hereto as Exhibit A (the “Escrow Agreement”).
The Consideration Shares shall be released to the respective Sellers upon the lapse of
ten (10) months from the Closing (the “Escrow Period”), unless the
Purchaser shall have submitted to the Sellers a claim for indemnification, in which case
the amount of the Consideration Shares required to cover the potential claim shall remain
in escrow pending the resolution of such claim and shall be used to satisfy all or part
of such claim if sustained. During the Escrow Period the Sellers shall be deemed to be
the owners of the Consideration Shares for the purpose of voting the Consideration
Shares. All dividends, bonus shares, options or other distributions to shareholders as
may be declared by the Company in respect of the Consideration Shares shall be paid,
issued or distributed to the Shares Escrow Agent, who shall hold them until such time
that the same are released from escrow as provided in the Escrow Agreement. 






	 	1.3 	Deposit.
The parties acknowledge that the Purchaser has transferred to Kilstein & Kilstein
(the “DepositEscrow Agent”) to the sum of $250,000 (the “Deposit”).






	 	1.4 	Contingent
Consideration. The Purchaser shall pay an amount of up to $500,000 in cash, in
contingent payments (the “Contingent Consideration”), payable to the
Sellers jointly upon achievement by the Company of the financial milestones (each, a
“Target”) stated on Schedule B. 






	2.	Closing.
The closing of the sale and purchase of the Sold           Shares of each Seller listed
in Schedule A  shall take           place at a closing (the “Closing”),
which will be held at the           offices of Greenberg Traurig, P.A. 200 Park Avenue,
Florham Park, New Jersey           07932 within five (5) business days from the date all
conditions precedent           stated in Sections 8 and 9 hereof have been fulfilled or
waived (as applicable)           or on such other date, time and place as the Purchaser
and the Sellers shall           mutually agree. The date of the Closing shall be deemed
the “Closing           Date”. 






	 	2.1 	Transactions
at Closing. At the Closing, the following transactions shall occur, which
transactions shall be deemed to take place simultaneously, and no transaction shall be
deemed to have been completed or any document delivered until all such transactions have
been completed and all required documents delivered: 






	 	2.2.1 	The
Sellers and the Company shall deliver, or procure the delivery, to the Purchaser of the
following documents:  






	 	a. 	Certificates
representing all of the Sold Shares, each such certificate to be                duly and
validly endorsed in favor of the Purchaser or accompanied by separate
               stock powers duly and validly executed by the relevant Seller and
otherwise                sufficient to vest in the Purchaser good and marketable title to
such stock;  






	 	b. 	A
certificate, duly executed by an executive officer of the Company, dated as of
               the Closing Date, confirming that the representations and warranties made
in                Section 4 were true and correct in all material respects when made and
are true                and correct in all material respects on and as of the Closing
Date, as though                made on the Closing Date, and that the Company has
performed in all material                respects all obligations required under this
Agreement to be performed by it on                or before the Closing;  






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	 	c. 	Certificates
of each of the Sellers dated as of the date of the Closing,                confirming
that the representations and warranties made in Sections 3, 4 and 5                were
true and correct in all material respects when made and are true and
               correct in all material respects on and as of the Closing Date, as though
made                on the Closing Date.  






	 	d. 	An
executed opinion of counsel to the Company and Sellers in the form attached
               hereto as Schedule 2.2.1(d) ,
dated                as of the date of the Closing and addressed to the Purchaser.  






	 	e. 	Resignation
letters signed by the Sellers, resigning from the Board of Directors                of
the Company, effective as of the Closing.  






	 	f. 	The
employment agreement between Donald Levi and the Company in the form
               attached as Schedule 2.2.1(f) hereto executed by
Donald                Levi (the “Donald Levi Employment Agreement”).  






	 	g. 	The
employment agreement between Andrew Levi and the Company in the form
               attached as Schedule 2.2.1(g)  executed by Andrew Levi (the
“Andrew Levi Employment Agreement”).  






	 	h. 	True
and correct copies of resolutions or unanimous consents of the                Company’s
Board of Directors approving the transactions contemplated                hereby.  






	 	i. 	A
copy of all approvals and consents of, or notices to, any governmental
               authority or agency needed to enter into and/or consummate the
transactions                contemplated hereby.  






	 	2.2.2 	The
Purchaser shall deliver to the Sellers the following documents: 






	 	a. 	True
and correct copies of resolutions or unanimous consents of the                Purchaser’s
Board of Directors approving (i) the transactions contemplated                hereby;
(ii) the issuance of the Consideration Shares (for deposit with the                Shares
Escrow Agent) and the transfer of the Cash Payment (less the Deposit) to
               the Sellers in accordance with Schedule A hereto and (iii) the
Contingent                Consideration in accordance with Schedule B, against the
transfer to the                Purchaser of the Sold Shares, free and clear from any
Security Interest;  






	 	b. 	Confirmation
by the Shares Escrow Agent of receipt of validly executed share
               certificates covering the Consideration Shares, issued in the name of each
               Seller;  






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	 	c. 	A
certificate duly executed by an executive officer of the Purchaser, dated as           of
the date of the Closing, confirming that the representations and warranties
          made by the Purchaser in Section 6 were true and correct when made and are true
          and correct in all material respects on and as of the Closing Date, as though
          made on the Closing Date.  






	 	d. 	A
copy of all approvals and consents of, or notices to, any governmental
          authority or agency needed to enter into and/or consummate the transactions
          contemplated hereby. Purchaser may certify in writing that all approvals have
          been secured.  






	 	e. 	If
any closing document that is delivered by Purchaser to Sellers is in Hebrew,           it
shall be accompanied by an English translation thereof certified by an           officer
of Purchaser.  






	 	2.2.3 	The
Purchaser shall deliver to each Seller by certified check(s) or equivalent bank check(s)
payable to each Seller or commence the transfer of the Cash Payment less the Deposit to
the Sellers by wire transfer in immediate available funds to the accounts designated by
the Sellers. Such payments shall be made in U.S. dollars. The actual receipt and
clearance of such checks or other payments shall be a condition precedent to the
effectiveness of each of the closing transactions.  






	 	2.2.4 	The
Purchaser shall instruct the Deposit Escrow Agent to transfer the Deposit to the Sellers.  






	 	2.2.5 	The
Company and the Sellers shall execute and deliver to each other General Releases in the
forms attached hereto as Schedules 2.2.5(a), (b) and (c)  






	3.  	Representations
and Warranties of Each Seller. Each           Seller, severally and not
jointly, represents and warrants to the Purchaser as           follows: 






	 	3.1 	He
is the holder and legal owner of all rights, titles and interests in and to the Sold
Shares set forth opposite its name in Schedule A, free from all
Security Interests, , together with all rights, preferences and privileges attaching to,
or conferred by, such Sold Shares; 






	 	3.2 	He
is not entitled to purchase, receive or otherwise acquire from the Company any additional
securities of the Company, including without limitation securities exercisable or
convertible into securities of the Company. 






	 	3.3 	The
execution and delivery of this Agreement (and the other documents contemplated hereby) by
him does not, and the consummation of the transactions contemplated hereby and thereby
will not: 






	 	(a) 	constitute
a breach of any applicable law, rule or regulation of any government           applicable
to such Seller;  






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	 	(b) 	require
the consent or agreement of any court, governmental body or entity that           has not
been, or will not have been, obtained by such Seller prior to the           Closing;  






	 	(c) 	violate
any material contract, agreement, indenture, mortgage, instrument,           lease,
license, arrangement, or undertaking of such Seller;  






	 	(d) 	result
in the creation or enforcement of any Security Interest upon the Sold           Shares
held by such Seller;  






	 	(e) 	violate
or conflict with any judgment, order, injunction, decree, or ruling of                any
court or governmental authority to which the Seller is subject.  






	 	3.4 	He
has, and will have at the Closing, the right to sell and transfer, or procure the sale
and transfer of, the full legal and beneficial interest in his respective Sold Shares to
the Purchaser on the terms set out in this Agreement, free from all Security Interests,
subject to such consents and approvals contemplated hereby and which shall have been
obtained by the Closing. 






	4. 	Representations
and Warranties regarding the Company. The           Company and each
Seller, severally and jointly, hereby represent and warrant to           the Purchaser as
follows: 






	 	4.1 	Organization.
The Company is a private company, duly incorporated and validly existing under the laws
of its state of incorporation, and has full corporate power and authority to own, lease
and operate its properties and assets and to conduct its business as currently being
conducted. Copies of the Company’s Certificate of Incorporation and Bylaws as in
effect on the date of this Agreement are attached hereto as Schedule 4.1.
The Company has all permits, licenses and any similar authority necessary for the conduct
of its business as currently being conducted by it, and the Company believes that it can,
without undue burden or expense, obtain all permits, approvals, licenses and any similar
authority necessary for the consummation of this Agreement and the transactions
contemplated hereby. The Company is not in material default under any of its current
franchises, permits, licenses or other similar authorities. The Company has not taken any
action or failed to take any action, which such action or failure would preclude or
prevent the Company from conducting its business after the Closing in the manner
heretofore conducted. 






	 	4.2 	Capital
Stock. 






	 	4.2.1 	The
Company’s authorized capital stock as of the date hereof is two (200) hundred shares
without par value. On the date hereof and immediately after the Closing, twenty (20)
shares of common stock are and will be issued and outstanding.  






	 	4.2.2 	All
issued and outstanding shares of common stock of the Company have been duly authorized
and validly issued, are fully paid and non-assessable, free and clear of any Security
Interest.  






	 	4.2.3 	A
capitalization table showing the division of the issued and outstanding shares of Common
Stock of the Company immediately prior to the Closing on a fully diluted basis is
attached as Schedule 4.2.3. The shareholders identified in such
Schedule are the shareholders of the Company immediately prior to the Closing, and are
the lawful record owners of all of the issued and outstanding shares of common stock of
the Company.  






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	 	4.2.4 	There
are no outstanding warrants, options or other rights to subscribe for, purchase or
acquire from the Company any shares or other securities of the Company, and there are no
agreements or undertakings providing for the issuance of, or the granting of the rights
to acquire from the Company any shares or other securities of the Company or under which
the Company is or may become obligated to issue any of its shares or securities.  






	 	4.2.5 	The
Sold Shares, when delivered to the Sellers will be duly authorized, validly issued, fully
paid, non-assessable, and free of any preemptive rights, and when transferred in
accordance with this Agreement will have the rights, preferences, privileges and
restrictions set forth in the Company’s Certificate of Incorporation and Bylaws.  






	 	4.2.6 	With
the exception of an existing shareholders agreement between Donald Levi and Andrew Levi,
which shall be terminated simultaneously with the Closing, without further obligation of
the Company or Purchaser, there are no shareholders agreements, voting agreements,
registration rights agreements or any other agreements or undertakings relating to the
share capital of the Company which will be in effect as of the Closing.  






	 	4.2.7 	Undistributed
Profits through December 31, 2006 that have not been distributed to the shareholders of
the Company are reflected on the books and records of the Company in the Accumulated
Adjustment Account. Since January 1, 2007, the Company has declared and distributed an
aggregate of $470,000 to its shareholders which represents the 2006 profits. The Sellers
agree that no further amounts with respect to profits earned prior to December 31, 2006
shall be distributable to them by the Company either prior to or after the Closing Date.
The Company shall distribute to Sellers the net income before Tax payable by the Company
(if any such Tax is due from the Company) for the period commenced January 1, 2007
through the Tax Closing Date (September 30th  2007). Such amount shall be
declared as distribution to shareholders before the Closing Date and shall be paid to
Sellers 5 days after Closing. For purposes of the foregoing, Taxes shall be computed on
the basis of the Subchapter S election applicable through the Closing Date under which
tax consequences are passed through to the shareholders.  






	 	4.2.8 	The
Company is not under any obligation to register for trading on any securities exchange
any of its currently outstanding securities or any of its securities, which may hereafter
be issued.  






	 	4.3 	Subsidiaries. The
Company has no Subsidiaries. The term “Subsidiary” means any corporation
or other business entity of which the Company owns a majority of its outstanding capital
stock. The Company does not own shares, equity or other rights in any other company or
corporation (in any jurisdiction), is not a partner in any partnership (general or
limited, incorporated or unincorporated), and is not a party to any joint venture
activity. 






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	 	4.4 	Board
of Directors and Officers. A list of the directors and officers of the Company is
included in Schedule 4.4. Except as set forth in Schedule 4.4,
neither the Company nor the Sellers are parties to any agreement, obligation or
commitment with respect to: (i) the election of any individual or individuals to the
Board, (ii) any voting agreement or other arrangement among the Company’s
shareholders, or (iii) any compensation to be provided to any of the Company’s
directors or officers which will continue to bind the Company after the Closing with the
exception of any unpaid 2007 Compensation due Sellers as more particularly set forth in
section 7.1. 






	 	4.5 	Records.
The minute books of the Company, which have been provided to the Purchaser, contain
accurate and complete copies of the minutes of every meeting of the Company’s
shareholders and Board of Directors (and any committee thereof, if any). No resolutions
have been passed, enacted, consented to or adopted by the Board of Directors (or any
committee thereof) or by the shareholders of the Company, except for those contained in
such minute books with the exception of resolutions given to banks as to authorized
signatures. The corporate records of the Company are complete and accurate in all
material respects. All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Secretary of State in respect of the Company have been
properly filed or delivered. For purposes of this Section, unanimous consents shall be
deemed to be resolutions and minutes. 






	 	4.6 	Financial
Statements.  






	 	4.6.1 	A
true, correct and complete copy of the unaudited financial statement for the fiscal year
ended December 31, 2006 and audited financial statements for the period from January 1,
2007 through September 30, 2007, subject to such exceptions as are noted in such
statements (the September 30, 2007 statement is referred to as the “Company Financial
Statements”) are attached as Schedule 4.6.1. The Company
Financial Statements have been prepared in conformity with the generally accepted
accounting principles (“GAAP”), applied on a consistent basis throughout
the periods indicated and with each other. The Company Financial Statements are
consistent in all material respects with the books and records of the Company and fairly
present the position of the Company as of the dates thereof and the results of operations
and cash flows of the Company for the periods shown therein. Nothing has come to the
attention of the Company or the Seller since September 30, 2007 (the “Balance
Sheet Date”) that would indicate that such financial statements are not true and
correct in all material respects as of the dates thereof. 






	 	4.6.2 	During
the period commenced by the Balance Sheet Date and ended on the date hereof, there has
not been any of the following:  






	 	4.6.2.1 	any
material adverse change in the financial condition, results of operations, assets,
liabilities or business of the Company;  






	 	4.6.2.2 	any
liability or obligation of any nature whatsoever incurred by the Company, other than obligations
under contracts and commitments incurred in the ordinary course of business which are not
required under GAAP to be reflected in the Company Financial Statements, which,
individually or in the aggregate, the Company represents, are not material to the
financial condition or operating results of the Company;  






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	 	4.6.2.3 	any
material asset or property of the Company has been made subject to a Security Interest of
any kind;  






	 	4.6.2.4 	any
waiver of any material right of the Company or any cancellation of any material debt or
claim held by the Company;  






	 	4.6.2.5 	any
payment of dividends on, or other distributions with respect to, any shares of the
capital stock of the Company, or any agreement or commitment therefore.  






	 	4.6.2.6 	any
issuance of any shares of any class by the Company; 






	 	4.6.2.7 	any
sale, assignment, transfer or lease of any tangible or intangible assets (including
intellectual property rights) of the Company, except for sales, assignments, transfers or
leases of assets which are not material (individually or in the aggregate) to the Company’s
business and, with the further exception of the sale of merchandise in the ordinary
course of business;  






	 	4.6.2.8 	any
loan by the Company to any officer, director, employee, consultant or shareholder of the
Company or any agreement or commitment therefor other than routine travel and other
routine expense reimbursements in the ordinary course of business or loans made to
employees who are not directors or shareholders of the Company;  






	 	4.6.2.9 	any
material damage, destruction or loss (individually or in the aggregate) (whether or not
covered by insurance) affecting the assets, property or business of the Company;  






	 	4.6.2.10 	any
substantial change in the accounting methods, practices or policies followed by the
Company for financial accounting or tax purposes, except as requested by Purchaser in
connection with the Company Financial Statements and the Company’s inventory
accounting system;  






	 	4.6.2.11 	any
material change or amendment to a material contract or arrangement by which the Company
or any of their respective assets or properties is bound or to which the Company or any
of its assets is subject the parties acknowledging that the Company is presently in the
process of negotiating a renewal of its contract with Embraer which is the Company’s
largest customer;  






	 	4.6.2.12 	any
satisfaction or discharge of any claim or Security Interest except in the ordinary course
of business.  






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	 	4.6.2.13 	any
material change in any compensation arrangement or agreement with any director, officer,
employee, consultant, advisor or contractor of the Company.  






	 	4.7 	Authorization;
Approvals.  






	 	4.7.1 	All
corporate action on the part of the Company necessary for the authorization, execution,
delivery and performance of all its obligations under this Agreement and for the transfer
of the Sold Shares under this Agreement has been (or will be) taken prior to the Closing.  






	 	4.7.2 	This
Agreement, when executed, and delivered by the Company and by each of the Sellers, shall
constitute the valid and legally binding obligation of each of the Sellers, enforceable
against the each Seller, as the case may be, in accordance with its terms. No consent,
approval, order, license, permit, action by, or authorization of or from any person or
entity or filing with any governmental authority on the part of the Company or any Seller
is required that has not been, or will not have been, obtained by the Company or such
Seller prior to the Closing in connection with the valid execution, delivery and
performance of this Agreement or the transfer of the Sold Shares to the Purchaser.  






	 	4.8 	Compliance
with Law and Other Instruments.  






	 	4.8.1 	The
Company has conducted its business (i) in accordance with all applicable laws and
regulations to which it is subject in the United States, except to extent that,
individually or in the aggregate, would not cause a Material Adverse Effect, and (ii) to
the best of its knowledge, in accordance with all material applicable laws and
regulations to which it is subject in other jurisdictions and has received no written
notice to the contrary within two (2) years last past or any other written notice to the
contrary which has not been abated or complied with. As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties,
assets, operations, prospects, results of operations or condition (financial or
otherwise) of the Company  






	 	4.8.2 	The
Company is not (a) in default under its Certificate of Incorporation or by-laws, or (b)
in default under any material note, indenture, mortgage, lease, agreement, contract,
license, research and development commitment, purchase order or other instrument,
document or agreement to which it is a party or by which it or any of its property is
bound or affected. The Company has not received any written notice within two (2) years
last past that it is in material default with respect to any existing applicable law,
statute, ordinance, regulation, order, writ, injunction, decree or judgment of any court
or any governmental department, commission, board, bureau, agency or instrumentality, in
countries in which it conducts its business. Any written notice received prior to such
two (2) year period has been abated or complied with.  






	 	4.8.3 	To
the Company’s and Seller’s best knowledge, no third party is in default under
any material agreement, contract or other instrument, document or agreement to which the
Company is a party except that Varig and Apex are subject to bankruptcy proceedings and
Aeromot is apparently unable to meet its obligations as they fall due. The Company is not
a party to, or named in, any order, judgment, decree or award of any governmental
authority, agency, court, tribunal or arbitrator.  






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	 	4.9 	No
Breach. 






	 	4.9.1 	Neither
the execution and delivery of this Agreement nor compliance with the terms and provisions
hereof, will conflict with or result in a breach or violation of, any of the terms,
conditions and provisions of: (i) the Certificate of Incorporation, or by-laws of the
Company, (ii) any judgment, order, injunction, decree, or ruling of any court or
governmental authority, in countries in which the Company conducts its business, or to
which the Company is subject, (iii) any agreement, contract, lease, license or commitment
to which the Company is a party, or (iv) applicable law in countries in which the Company
conducts its business.  






	 	4.9.2 	Such
execution, delivery and compliance by the Sellers will not (a) give to others any rights,
including rights of termination, cancellation or acceleration, in or with respect to any
agreement, contract or commitment referred to in Section 4.9.1, or (b) otherwise require
the consent or approval of any person, which consent or approval has not heretofore been
obtained or shall be obtained by the Closing.  






	 	4.10 	Ownership
of Assets. The Company has good and marketable title to, or a valid leasehold or
license interest in its premises and in the properties and assets used by it, located on
its premises, or shown on the Company Financial Statements, free and clear of all
Security Interests except the automobiles and life insurance policies to be transferred
to Sellers as provided in Section 12.12. No asset is shared by the Company with any other
person or entity. 






	 	4.11 	Bank
Accounts; Debt and Loan Facilities.  






	 	4.11.1 	Details
regarding the Company’s bank accounts and the Company’s bank credit facilities
(the “Bank  Credit”) are as set forth in Schedule 4.11.1.
Except for the bank accounts identified in Schedule 4.11.1, the
Company does not have any other bank accounts severally or jointly with others.  






	 	4.11.2 	Except
for liabilities disclosed in the Company Financial Statements, the liabilities of the
Company in excess of $5,000 are set forth in Schedule 4.11.2 (the
“CompanyLiabilities”). The aggregate amount of the liabilities
which are not reflected in the Company Financial Statements, including accrued 2007
salaries due Sellers as more particularly set forth in Section 7.1 and related Schedule
7.1, is set forth in Schedule 4.11.2. Except as set forth in
Schedule 4.11.2, there are no debts owing by or to the Company other than the debts,
which have arisen in the ordinary course of business, nor has the Company loaned any
money, which has not yet been repaid.  






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	 	4.11.3 	No
financial facilities (loan or credit arrangements) have been made available to the
Company by any bank or financing institution other than in the ordinary course of
business. It is the intention of the Company and Purchaser to consider entering into a
financial facility with a banking institution mutually acceptable to them, with the
consent of Sellers and the Purchaser prior to the Closing Date.  






	 	4.11.4 	The
Company is not in material default under any loan agreement or any other instrument
constituting any indebtedness or under any guarantee of any indebtedness, and there is no
reason why any such indebtedness or guarantee should be called or the liabilities
thereunder accelerated before their due date (if any) or any loan facilities terminated.  






	 	4.11.5 	The
Company, in cooperation with the Purchaser, shall have the right, prior to Closing, to
establish a bank line of credit on commercially reasonable terms, with written consent of
the Sellers.  






	 	4.12 	Intellectual
Property and Other Intangible Assets. 






	 	4.12.1 	General.
The Company owns, or has the right to use pursuant to a license, sublicense, agreement or
permission, all Intellectual Property (as such term is defined below) necessary for the
operation of the businesses of the Company as currently conducted. The Company has no
licenses, sublicenses, agreements, and permissions (as amended to date) except Pentagon
and inventory system and off-the-shelf computer software licenses. Each item of
Intellectual Property owned or used by the Company immediately prior to the Closing
hereunder will be owned or available for use by the Company on identical terms and
conditions immediately subsequent to the Closing hereunder except for changes made by the
provider thereof which are applicable to the Company and similarly situated other
customers of the provider. No other Intellectual Property of any kind, owned by a third
party, that is required by the Company to conduct its business, as currently conducted,
requires, or would require, the payment of any substantial fee or royalty.  






	 	
In
this Agreement, “Intellectual Property” includes inventions and
discoveries (whether or not patentable), patents, patent applications, trademarks,
service marks, trade dress, designs, trade names, copyrightable works, copyrights, mask
works, trade secrets, customer lists, techniques, know-how, proprietary processes and
formulas, business strategies, and all other proprietary rights, industrial rights and
any other similar rights, if registrable, then in such jurisdiction registered, and all
copies and tangible embodiments thereof, or any part thereof, in whatever form or medium. 






	 	4.12.2 	No
Infringement. The Company has not misappropriated any Intellectual Property rights of
any third party. To the best of the Company’s and each Seller’s knowledge, the
Company has not infringed upon, or otherwise violated, any Intellectual Property rights
of any third party. The Company has not received any charge, complaint, claim, demand or
notice alleging any misappropriation, infringement or violation (including any claim that
the Company must license or refrain from using any Intellectual Property rights of any
third party) by the Company or its personnel of any Intellectual Property rights of any
third party. To the Company’s and each Seller’s best knowledge, no third party
has infringed upon, misappropriated, or otherwise violated, any Intellectual Property
rights of the Company.  






- 11 -







	 	4.12.3 	Ownership
of Intellectual Property. The Company has not registered or applied for registration
of any Intellectual Property. All of the Intellectual Property which has been conceived,
discovered, researched, created and developed or is currently being researched, created
and developed by the Company’s employees, consultants or agents related to (i) the
Company’s technology, (ii) any invention or work product created by or for the
Company or (iii) any part of, or any derivative work of, any of the foregoing, is owned
solely and exclusively by the Company. The Company has not granted any license,
agreement, or other permission to any third party with respect to any of its Intellectual
Property. With respect to each item of Intellectual Property necessary to the Company’s
business: (i) the Company possesses all right, title, and interest in and to the item,
free and clear of any Security Interest, license, royalty, commission or similar
arrangements or other restriction except as referred to in Section 4.12.1; (ii) the item
is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;
(iii) no action, suit, hearing, charge, complaint, claim, or demand is pending, or, to
the knowledge of the Company, is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; (iv) the Company has never agreed to
indemnify any person or entity for or against any infringement, misappropriation or other
violation with respect to the item; and (v) the Company has not granted, and there are
not outstanding, options, licenses or agreements of any kind relating to any Intellectual
Property rights of the Company, nor is the Company a party to any option, license or
agreement of any kind with respect to any of its Intellectual Property. ‘Summit
Aviation’, ‘Sussex Mechanical’ and “Summit Radio”are the only
trade names owned by the Company, and such trade names are unregistered except pursuant
to the Company’s New Jersey Corporate Alternate Name filing.  






	 	4.12.4 	Protection
of IP Rights and Trade Secrets. The Company has taken all actions to maintain and
protect each item of Intellectual Property that it owns or uses, which actions are
customary in the industry in which the Company operates. All the confidential information
of the Company is being (and has been) continuously maintained in confidence by taking
reasonable precautions to protect and prevent its disclosure to unauthorized parties.  






	 	4.12.5 	Limited
IP Activity. The Company has not entered into any written agreements with its
employees with respect to its Intellectual Property. It is engaged exclusively in the
resale of products developed by third parties and does not conduct product research or
development.  






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	 	4.13 	Taxes. 






	 	4.13.1 	The
Company and the Sellers have timely filed all Tax Returns required to be filed with
respect to the Company. All Taxes owed by the Company or the Sellers with respect to the
Company have been paid. The Company is not currently the beneficiary of any extension of
time within which to file any Tax Return. There is no power of attorney with respect to
any Tax executed or filed by or on behalf of the Company with any taxing authority,
except for a power of attorney granted by the Company to Housman and Bloch.  






	 	4.13.2 	The
Company has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor, creditor,
member or other third party.  






	 	4.13.3 	There
are no liens on any of the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax, except for liens for Taxes not yet due.
During the last five (5) years none of the Company’s Tax Returns has been audited or
has been the subject of any notice of any audit, examination, investigation or other
proceeding except standard worker’s compensation audits by the Company’s worker’s
compensation insurers with the exception of a New Jersey Sales Tax audit covering years
prior to 2004 which audit has been concluded and closed. No claim has ever been made by a
taxing authority in a jurisdiction where the Company does not file Tax Returns that it is
or may be subject to taxation by that jurisdiction.  






	 	4.13.4 	The
Company is not a party to any Tax allocation or sharing agreement. The Company does not
have any liability for the Taxes of any other Person, whether pursuant to statute,
regulation, administrative position of a taxing authority or as a transferee or
successor, by contract or otherwise.  






	 	4.13.5 	The
Company will not be required to include in a taxable period ending after the Closing Date
any gross income by reason of income accruing in a prior taxable period but not being
recognized in any prior taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the long-term contract method of
accounting, the cash method of accounting or Section 481 of the Code or any comparable
provision of state, local or foreign Tax law.  






	 	4.13.6 	As
used in this Agreement, “Code” means the Internal Revenue Code of 1986, as
amended; “Person” means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency or political subdivision
thereof; “Tax” means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code), customs
duties, capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other tax of any
kind whatsoever, including any interest, penalty or addition thereto, whether disputed or
not, and “Taxes” means any or all of the foregoing collectively; and “Tax
Return” means any return, declaration, report, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment thereto and
including any amendment thereof. For purposes of this section 4.13, “Company” means
the Company and/or any entity that at any time has been a subsidiary of the Company.  






- 13 -







	 	4.13.7 	The
Company has not made any payments, is not obligated to make any payments and is not a
party to any agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under section 280G of the Code or that would give
rise to any obligation to indemnify any person for any excise tax payable pursuant to
section 4999 of the Code.  






	 	4.13.8 	The
Company is not a controlled corporation or a distributing corporation in respect of a
distribution to which section 355(e) of the Code could apply by reason of the acquisition
of the Company’s shares pursuant to this agreement. No indebtedness of the Company
consists of “corporate acquisition indebtedness” within the meaning of section
279 of the Code.  






	 	4.13.9 	The
Company has not been a United States real property holding corporation within the meaning
of section 897(c)(2) of the Code during the applicable period specified in section
897(c)(1)(A)(ii) of the Code. The Company does not have, and has not had, a permanent
establishment in any foreign country, as defined in any applicable income tax treaty to
which the United Sates and the foreign country are parties or under the law of the
foreign country. The Company does not have an overall foreign loss within the meaning of
section 904(f) of the Code.  






	 	4.13.10 	The
Company has disclosed on its Federal Income Tax Returns all positions taken therein that
could give rise to a substantial understatement of Federal income Tax within the meaning
of section 6662 of the Code. The Company has not engaged in any “listed transaction” or
“reportable transaction” within the meaning of section 6707A(c) of the Code or
Treasury regulation section 1.6011-4(b) or any transaction (i) that was marketed to the
Company in writing as a transaction that is intended to generate substantial tax benefits
and (ii) with respect to which the Company has paid a promoter of the transaction total
fees in excess of $100,000.  






	 	4.13.11 	At
all times since January 1, 1987, the Company has qualified as an S corporation (within
the meaning of section 1361(a)(1) of the Code).  






	 	4.14 	Contracts.  






	 	4.14.1	Schedule
4.14.1 lists each Material Agreement (as hereinafter defined) to which the
Company is a party (collectively, the “Company Material Agreements”). A
“Material Agreement” means any arrangement which was not entered
into in the ordinary course of business, or which has a value in excess of $50,000. There
is no oral Material Agreement to which the Company is party, other than those reflected
in the Company Liabilities. True and correct copies of all such Company Material
Agreements, as amended to date, have been delivered to the Purchaser.  






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	 	4.14.2 	With
respect to each Company Material Agreement at Closing and immediately after Closing
hereunder: (i) such Company Material Agreement is legal, valid, binding, enforceable and
in full force and effect, subject to and in accordance with its terms, subject as to
enforceability to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors’ rights and to general principles
of equity; (ii) the Company is not in breach or default, and no event has occurred which
with notice or lapse of time or both would constitute a breach or default or permit
termination, modification or acceleration thereunder, except for any breaches, defaults,
terminations, modifications or accelerations which have been cured or waived; and (iii)
no party has repudiated any provision of any such Company Material Agreement.  






	 	4.15 	Litigation.
The Company has not received notice in which it is: (i) named or otherwise identified in
any outstanding injunction, judgment, order, decree, writ, stipulation, ruling or charge
of any court or any governmental agency or any arbitrator; or (ii) a party or, to its
best knowledge, threatened to be made a party to, any action, suit, proceeding, hearing,
complaint, charge or investigation of, in, or before any court or quasi-judicial or
administrative agency of any state, municipal, or foreign jurisdiction or before any
arbitrator or other method of settling disputes or disagreements. To the best knowledge
of the Company and each Seller, no action, suit, proceeding, hearing, complaint, charge
or investigation is to be brought or threatened against the Company, and the Company does
not intend to initiate any such action, suit, proceeding, hearing, complaint, charge or
investigation. Without derogating from any of the foregoing, there is no action, suit,
proceeding or investigation pending or currently threatened involving the prior
employment of any of the Company’s employees, their use 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 agreement with prior employers.
The institution by any employee or former employee of a worker’s compensation or
unemployment proceeding prior to the Closing Date shall not give rise to any right of
termination by Purchaser if the Company has maintained required insurance as to worker’s
compensation claims or such claim would not expose the Company to Damages. 






	 	4.16 	Interested
Party Transactions.  






	 	4.16.1 	No
officer, director or holder of more than 5% of the issued and outstanding capital stock
of the Company (“Interested Party”), or any affiliate of such Interested
Party or the Company, has or has had, either directly or indirectly, (a) an interest in
any person or entity which (i) furnishes or sells services or products which are
furnished or sold or are proposed to be furnished or sold by the Company, or (ii)
purchases from or sells or furnishes to the Company any goods or services, or (b) a
beneficial interest in any contract or agreement to which the Company is a party, except
for ownership of less than 5% of the securities of a publicly held entity.  






- 15 -







	 	4.17 	Employees.
There exist no arrangements or proposed transactions, either directly or indirectly,
between the Company and any Interested Party or any affiliate or associate of any such
Interested Party. No employee, shareholder, officer or director of the Company is
indebted to the Company, nor is the Company indebted (or committed to make loans or
extend or guarantee credit) to any of them, except in the ordinary course of business and
except as stated in Section 7.1. 






	 	4.17.1 	A
full list of all of the Company’s officers and employees showing all Benefits (as
defined below) payable or which the Company is bound to provide (whether now or at a
future time set forth therein) to each officer and employee is set forth in Schedule
4.17.1. The Company has no written agreements with employees.  






	 	4.17.2 	No
senior employee of the Company with management responsibilities has been dismissed in the
last six months or has given notice of termination of his/her employment.  






	 	4.17.3 	Except
for its 401K and health insurance plans and as provided by law and/or under legally
binding collective agreements, there are no agreements or arrangements (whether legally
enforceable or not) for the payment of any pensions, allowances, lump sums or other like
benefits on retirement or on death or during periods of sickness or disablement for the
benefit of any director or former director or employee or former employee of the Company
for the benefit of the dependents of any such person in operation at the date hereof. The
parties acknowledge that the life insurance policies upon the lives of the Sellers are to
be transferred to them pursuant to the provisions of Section 12.12.  






	 	4.17.4 	The
Company does not operate any share incentive scheme, share option scheme or profit
sharing scheme for the benefit of any of its respective officers, directors, employees or
consultants.  






	 	4.17.5 	The
Company has paid in full or has made sufficient reserves in the Company Financial
Statements for all of the payments and obligations due or payable with respect to its
employees, including, but not limited to, social security payments and Income Tax
withholdings. The Company does not create reserves for vacation or sick pay or severance
pay.  






	 	4.17.6 	For
the purposes of this Section the term “Benefits” means benefits of every
description including, without limitation, salaries, directors’ fees, social
benefits, bonuses, commissions, profit shares under any incentive scheme and benefits in
kind.  






	 	4.17.7 	The
Company does not maintain, and has not in the last three (3) years prior to the date
hereof maintained, does not contribute to and has not in the last three (3) years prior
to the date hereof contributed to, is not obligated and has not in the last three (3)
years prior to the date hereof had any obligation to contribute to, or liability with
respect to, any qualified defined contribution or defined benefit plans or arrangements
(whether or not terminated) which are employee pension benefit plans (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute thereto, and the rules and regulations promulgated thereunder) except
its 401K Plan and health insurance plans.  






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	 	4.18 	Insurance.  






	 	4.18.1	Schedule
4.18.1 lists all of the insurance policies currently maintained by the
Company (the “Insurance Policies”). All such policies are in full
force and effect, all premiums due and payable thereunder have been paid, and no notice
of cancellation or termination has been received with respect to any such policy. Such
policies are valid, outstanding and enforceable in accordance with their terms and will
remain in full force and effect without the payment of any additional premiums through
the Closing.  






	 	4.18.2 	There
are currently no claims pending under any Insurance Policies. To the best knowledge of
the Company and the Seller, there is no threatened termination of any such Insurance
Policies. The Company has not within the past five years been refused any insurance with
respect to its assets or operations by reason of the nature of its operations and
products, nor, during such five (5) year period, has its coverage been limited by any
insurance carrier to which it has applied for any such insurance.  






	 	4.19 	Brokers
or Finders. Neither the Company nor any of the Sellers or any of their respective
employees or shareholders has employed or made any agreement with any broker, finder or
similar agent or any person or firm, which will result, directly or indirectly, in the
obligation of the Seller, the Company or the Purchaser to pay any finder’s fee,
brokerage fees or commission or similar payment in connection with the transactions
contemplated hereby. It is acknowledged that the Purchaser has used Cukierman & Co.
Investment House Ltd. (“Cukierman”) as financial advisor to this transaction.
It is hereby clarified, that neither the Company nor the Sellers shall be liable to pay
Cukierman any broker’s or finder’s fee or any other commission or similar fee,
directly or indirectly, on account of any action taken by the Purchaser in connection
with any of the transactions contemplated under this Agreement, and Purchaser agrees to
indemnify Sellers and the Company from any and all claims by Cukierman resulting from any
brokerage or finder’s fee arrangement made by Purchaser with Cukierman. 






	 	4.20 	Option
Plan. No options or similar rights have been granted and/or promised to any
employees or consultants of the Company. 






	 	4.21 	Foreign
Corrupt Practices Act. Except as disclosed to the Purchaser in a writing from Sellers
of even date with this agreement, neither the Company, nor any director, officer, agent,
employee or other person acting on behalf of the Company has, in the course of acting
for, or on behalf of, the Company, directly or indirectly used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expenses relating to
political activity; directly or indirectly made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or any similar treaties of the United States; or directly or indirectly made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government or party official or employee. 






- 17 -







	 	4.22 	Environmental
Matters. The Company is in compliance with all environmental laws and possesses all
permits and authorizations necessary to conduct its business as presently conducted,
except as would not result in a Material Adverse Effect. No written notice, notification,
demand, request for information, citation, summons or complaint has been received or
order has been issued, and no penalty has been assessed, and no investigation or review
is pending or threatened by any governmental or administrative authority or other person
with respect to any actual or alleged violation by the Company of any environmental law
or liability thereunder, or actual or alleged failure by the Company to have any permit
or authorization required under any environmental law in connection with the conduct of
its business as presently conducted. The factual representations included in the
application to the ISRA Bureau of the New Jersey Department of Environmental Protection
for a Non-Applicability Determination shall be, when filed, true, correct and complete. 






	 	4.23 	Full
Disclosure. The representations and warranties of the Company and the Sellers in this
Agreement, are each accurate, correct and complete in all material respects, and do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements and information contained herein or therein not
misleading. Neither the Company nor the Seller is aware of any material information
relating to the Company and its operations as contrasted with information relating
generally to the economy and political affairs which would likely adversely and
materially affect the business, operating results, properties, or financial condition of
the Company, which has not been expressly disclosed to the Purchaser. The Purchaser has
the right to rely fully upon the representations, warranties, covenants and agreements of
the Company and the Seller contained in this Agreement or any Exhibit or Schedule hereto
or any ancillary agreements or documents executed or delivered in connection with or
pursuant to any of the foregoing. 






	 5.  	Representations
and Undertakings regarding the Consideration Shares. 






	 	
Each
Seller, severally and jointly, hereby represents, warrants and covenants to the Purchaser
as follows:  






	 	5.1. 	Information
and Advice. Each Seller confirms that he has received or has                had full
access to all the information he considers necessary or appropriate to
               make an informed decision with respect to this Agreement and the
Consideration                Shares received by him hereunder. Each Seller further
confirms that he has had                an opportunity to ask questions and receive
answers from the Purchaser regarding                the Purchaser’s business,
management and financial affairs and to obtain                additional information (to
the extent the Purchaser possessed such information                or could acquire it
without unreasonable effort or expense) necessary to verify                any
information furnished to such Seller or to which such Seller had access. 






	 	5.2. 	Availability
of Exemptions. Each Seller understands that the                Consideration Shares
are being offered pursuant to an exemption or exemptions                from registration
requirements of Israeli and US Federal and state securities                laws, and that
the Purchaser is relying upon the truth and accuracy of such                Seller’s
representations, warranties, agreements, acknowledgments and
               understandings set forth in this Section 5 herein in order to determine
the                applicability of such exemptions and the suitability of such Seller to
receive                the Shares. 






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	 	5.3. 	Legends.
Each Seller acknowledges and agrees that certificates                representing the
Consideration Shares will contain one or more legends to the                effect that
transfer of such securities is prohibited except pursuant to                registration
under the Securities Act of 1933, as amended (the                “Securities  Act”)
or pursuant to an available exemption from                registration, similar to the
following: 






	 	
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES EVIDENCED BY THIS CERTIFICATE, FILED
AND MADE EFFECTIVE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF
COUNSEL TO B.O.S BETTER ONLINE SOLUTIONS LTD. THAT SUCH REGISTRATION IS NOT REQUIRED. IN
ADDITION, THESE SHARES ARE SUBJECT TO A NO SALE COMMITMENT AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
WITHOUT THE PRIOR WRITTEN CONSENT OF B.O.S BETTER ONLINE SOLUTIONS LTD. ANY PURPORTED
SALE OR DISPOSITION IN CONTRIVANCE OF THE ABOVE SHALL BE DEEMED VOID AND HAVE NO EFFECT.” 






	 	5.4. 	Restrictions
on Transferability and Hedging. 






	 	5.5.1. 	Each
Seller understands that (i) the Consideration Shares have not been
               registered under the Securities Act, or under the laws of any other
               jurisdiction; (ii) such Consideration Shares are deemed to be “restricted
               securities” as defined in Rule 144 promulgated under the Securities
Act,                and cannot be sold, transferred or otherwise disposed of unless they
are                registered under the Securities Act and, where required, under the
laws of other                jurisdictions or unless an exemption from registration is
then available; (iii)                there is now no registration statement on file with
the Securities and Exchange                Commission with respect to the Consideration
Shares to be received by such                Seller.  






	 	5.5.2. 	Each
Seller acknowledges that the Purchaser will not register any transfer of
               Consideration Shares not made pursuant to registration under the
Securities Act,                or pursuant to an available exemption from registration or
made in contravention                of the lock-up provisions of Section 5.8 below.  






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	 	5.5.3. 	Each
Seller acknowledges, agrees and covenants not to engage in hedging
               transactions with regard to the Consideration Shares offered pursuant to
this                Agreement.  






	 	5.6. 	Investment
Purposes. The Consideration Shares are being acquired for                investment
purposes only. The Consideration Shares are not being purchased with                a
view to, or for sale in connection with, any distribution or other disposition
               thereof. The Sellers have no present plans to enter into any contract,
               undertaking, agreement or arrangement for any such resale, distribution or
other                disposition and they will not divide their interests in the
Consideration Shares                with others, resell or otherwise distribute the
Consideration Shares in                violation of federal or state US Securities laws
or the Israeli Securities Laws. 






	 	5.7. 	Intentionally
omitted. 






	 	5.8. 	Lock
Up. For a period of two years from the date of issuance of the
               Consideration Shares, no Seller shall sell, assign, transfer, pledge,
               hypothecate, mortgage or otherwise dispose of, by gift or otherwise any of
the                Consideration Shares, provided however, that the abovementioned
restriction                shall expire, for each Seller, with respect to fifty percent
(50%) of the                Consideration Shares issued to such Seller, upon the lapse of
one year from the                date of issuance of the Consideration Shares. Upon
expiration of the applicable                lock-up period, the Company shall take
reasonable steps to cooperate with the                Sellers in connection with re-sales
pursuant to Rule 144 under the Securities                Act. This Section shall not
limit transfers of shares by will or intestacy                during the applicable Lock
Up period, but any such transferees shall remain                bound by this lock-up
provision. 






	 	5.9. 	Accredited
Investor Status; Sophisticated Investor. Each Seller is an                “accredited
investor” as that term is defined in Rule 501(a) of                Regulation D
under the Securities Act. Each Seller has such knowledge and                experience in
financial and business matters that he is capable of evaluating                the merits
and risks of investment in the Consideration Shares. 






	 	5.10. 	No
Solicitation. At no time was such Seller presented with or solicited
               by any leaflet, public promotional meeting, newspaper or magazine article,
radio                or television advertisement or any other form of general advertising
or general                solicitation in connection with the Consideration Shares and
the transaction                contemplated hereby. 






	 	5.11. 	Broker-Dealer.
The Seller is not a broker-dealer, nor is it an affiliate                of any
broker-dealer. 






	6.  	Representations
and Warranties regarding the Purchaser. 






	 	
Purchaser
hereby represents and warrants to each of the Sellers as follows:  






	 	6.1. 	Corporate
Organization. The Purchaser is a company duly incorporated and                validly
existing under the laws of Israel, and has the corporate power to own                its
property and to carry on its business as now being conducted. The Purchaser
               has all requisite power and authority to execute and deliver this
Agreement and                to consummate the transactions contemplated hereby. The
Purchaser’s shares                are traded on the Nasdaq Market and on the
Tel-Aviv Stock Exchange and as such                it is subject to both US and Israeli
Securities Laws. 






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	 	6.2. 	Due
Authorization and Valid Issuance. The Agreement has been, or will                have
been, at the time of its execution and delivery, duly executed and
               delivered by a duly authorized officer of the Purchaser. Prior to the
Closing of                this Agreement, the Purchaser shall have acted to complete all
corporate action                necessary on its part for the issuance, sale and delivery
of the Consideration                Shares. The Consideration Shares will, upon issuance,
be duly authorized,                validly issued, fully-paid and nonassessable. 






	 	6.3. 	Binding
Agreement. The Agreement constitutes valid and legally binding
               obligations of the Purchaser enforceable against the Purchaser in
accordance                with its terms, except as (i) such enforceability may be
limited by bankruptcy,                insolvency, reorganization, arrangement, moratorium
or similar laws relating to                or affecting the rights of creditors and
contracting parties generally, (ii) the                remedy of specific performance and
injunctive and other forms of equitable                relief may be subject to equitable
defenses and to the discretion of the court                before which any proceeding
therefore may be brought. 






	 	6.4. 	Non-Contravention.
Neither the execution and delivery of the Agreement,                nor the consummation
of the transactions or the performance of the obligations                contemplated
hereby will result in any violation or breach of any of the terms,
               conditions and provisions of: (i) the Purchaser’s articles of
association,                (ii) any judgment, order, injunction, decree, or ruling of
any court or                governmental authority, in countries in which the Purchaser
conducts its                business, to which the Purchaser is subject, (iii) any
material agreement,                contract, lease, license or commitment to which the
Purchaser is a party and                which would impair the ability of the Purchaser
to execute, deliver or perform                this Agreement, or (iv) material applicable
law in countries in which the                Company conducts its business. To the
knowledge of the Purchaser, such                execution, delivery and compliance by the
Purchaser will not (a) give to others                any rights, including rights of
termination, cancellation or acceleration, in or                with respect to any
agreement, contract or commitment referred to in this                Section 6.4, except
as would not have a material adverse effect or (b) otherwise                require the
consent or approval of any person, which consent or approval has not
               heretofore been obtained or shall be obtained by the Closing. 






	 	6.5. 	No
Consent. To the Purchaser’s knowledge, and in reliance on the
               representations of the Sellers given in section 5 hereof, except for
reporting                obligations and approvals required under applicable securities
laws and market                regulations in Israel and the United States and for
approval by the Investment                Center and notice to the Office of Chief
Scientist of the Israeli Ministry of                Trade & Industry and pursuant to
the Foreign Investment and National                Security Act of 2007, no consent of
any governmental body or third party is                required to be made or obtained by
the Purchaser in connection with the                execution and delivery of the
Agreement by the Purchaser or the consummation by                the Purchaser of the
transactions or the performance of the obligations                contemplated hereby by
the Purchaser. 






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	 	6.6. 	Capitalization.
The authorized share capital of the Purchaser consists as                of the date
hereof: of 35,000,000 Ordinary Shares, nominal value NIS 4.00 per                share,
of which, as of June 30, 2007, 9,601,033 Ordinary Shares were outstanding
               and issued. As of June 30, 2007, the Purchaser had 2,343,319 options
issued to                directors, officers and employees to purchase Ordinary Shares
under various                options plans as well as 858,323 Ordinary Shares underlying
convertible notes                and warrants to purchase ordinary shares, issued to
investors and service                providers. Any change in the above capitalization
between the date hereof and                the date of the Closing shall not constitute a
default under this Agreement,                provided, however, that such change is the
result of the conversion or exercise                of convertible securities, options or
warrants of the Purchaser. A complete and                detailed list of all options
conversion rights, warrants and other securities                convertible into Ordinary
Shares is attached as Schedule                6.6. 






	 	6.7. 	Financial
Statements. 






	 	6.7.1 	The
audited consolidated financial statements of the Purchaser as of December 31, 2006 and
the related notes thereto, as filed by the Purchaser with the Securities and Exchange
Commission under Form 20-F for the year ending December 31, 2006 are true, correct and
complete in all material respects and fairly present the financial position of the
Purchaser as of their respective dates, and have been prepared in all material respects
in accordance with the books and records of the Purchaser as at the applicable dates and
for the applicable periods. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis throughout
the periods therein specified, except as may be disclosed in the notes to such financial
statements, or as may be permitted by the Securities and Exchange Commission and except
as disclosed in the filings the Purchaser made in connection with such statements, if
any.  






	 	6.7.2 	Other
than as reported in the Purchaser’s public filings with the US Securities and
Exchange Commissions (“Public Filings”), since December 31, 2006, there has not
been any event or material adverse change in the financial conditions of the Purchaser as
reflected in the financial statements which, individually or collectively with other
events or changes, could have a material adverse effect on the Purchaser.  






	 	6.8 	Legal
Proceedings. Except as disclosed in the Purchaser’s Public Filings, there is no
material legal or governmental proceeding pending or, to the knowledge of the Purchaser,
threatened to which the Purchaser is or may be a party. 






	 	6.9 	Compliance
with Law. The business of the Purchaser is conducted in accordance with applicable
laws, except to extent that, individually or in the aggregate, would not cause a material
adverse effect on the Purchaser. 






	 	6.10 	Disclosure.
The representations and warranties of the Purchaser contained in this Section 6 as
of the date hereof and as of the Closing, read together with the Company’s Public
Filings, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements herein, in light of the circumstances
under which they are made, not misleading. 






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	 	6.11 	Brokers.
Neither the Purchaser nor any of Purchaser’s employees or shareholders has employed
or made any agreement with any broker, finder or similar agent or any person or firm,
which will result, directly or indirectly, in the obligation of the Seller, the Company
or the Purchaser to pay any finder’s fee, brokerage fees or commission or similar
payment in connection with the transactions contemplated hereby. It is acknowledged that
the Purchaser has used Cukierman & Co. Investment House Ltd. (“Cukierman”)
as financial advisor to this transaction. It is hereby clarified, that neither the
Company nor the Sellers shall be liable to pay Cukierman any broker’s or finder’s
fee or any other commission or similar fee, directly or indirectly, on account of any
action taken by the Purchaser in connection with any of the transactions contemplated
under this Agreement, and Purchaser agrees to indemnify Sellers and the Company from any
and all claims by Cukierman resulting from any brokerage or finder’s fee arrangement
made by Purchaser with Cukierman. 






	  7.  	Covenants  






	 	7.1 	Ordinary
Course of Business. From and after the signing of this Agreement and until the
Closing, except as otherwise stated herein, the Company and each of the Sellers,
severally and jointly, covenant and agree with the Purchaser that the Company shall not
engage in any practice, take any action, or enter into any transaction outside the
ordinary course of business. Without limiting the generality of the foregoing, the
Company will not, without the prior consent of the Purchaser: (a) authorize or effect any
change in its corporate documents; (b) declare or pay any dividends or make any
other distributions with respect to its capital stock, except as stated in this Section;
(c) issue any shares or grant any option, warrant, convertible debenture or any other
form of security exercisable into or convertible into shares of the Company; (d) enter
into or renew any agreement with an Interested Party (including an employment agreement
with any employee or director), or increase the rate of remuneration of any employee or
director, and in any event, pay the Sellers remuneration at a rate of more than $5,000
per week per Seller; or (e) sell or agree to sell its assets (other than the Company’s
inventory sold in the ordinary course of business). Any accrued but unpaid compensation
to each Seller for 2007, at the rate of $5,000 per week, shall be paid by the Company not
later than December 31, 2007. Schedule 7.1 sets forth any accrued but unpaid
compensation to each Seller as of the date hereof. 






	 	7.2 	Disposal
of Interests. The Sellers further covenant with the Purchaser that, except as stated
herein, none of the Sellers shall dispose of any interest in the Company Shares or grant
any option over or create or allow to exist any Security Interest over the Company
Shares. 






	 	7.3 	Announcements.
No announcement or other disclosure concerning the sale and purchase of the Sold Shares
or any ancillary matter shall be made before or after the Closing by the parties or any
person acting on their behalf, except subject to Purchaser’s prior written approval
of the form and content of such announcement or disclosure or otherwise as required by
law or by the applicable rules of any stock exchange or automated quotation system. 






	 	7.4 	Reporting.
The Sellers and the Company acknowledge that the Purchaser is a public company traded on
NASDAQ and on the TASE and is subject to strict reporting requirements. On request,
Sellers and the Company shall fully and timely provide the Purchaser with all information
in their possession or control required by the Purchaser to meet all reporting
requirements, including without limitation any and all financial information and
financial statements. 






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	 	7.5 	Registration
Rights and Transferability. The Sellers shall have customary piggyback registration
rights in connection with the Consideration Shares. The Consideration Shares shall be
transferable subject to Section 5.8, pursuant to the provisions of Rule 144 under the
Securities Act. If following a two-year period from the Closing, the Consideration Shares
cannot be legally sold under Rule 144 or pursuant to another available exemption, the
Sellers may request that Purchaser cause the Consideration Shares to be registered under
the Securities Act. 






	 	7.6 	Confidentiality.
The Purchaser acknowledges that it has received and, prior to the Closing Date, shall
receive certain information concerning the Company, including, but not limited to,
information concerning its finances, personnel, business practices, customer information,
pricing, plans, systems, practices and employees (the “Proprietary Information”),
and the Purchaser agrees to keep such Proprietary Information confidential for a period
of 18 months following the termination of this agreement (the “Restricted Period”). 






	 	7.7 	Non-Solicitation.
During the Restricted Period, the Purchaser shall not, directly or indirectly, solicit or
accept business from any customer of the Company, unless the Purchaser sold products to
such customer prior to June 18, 2007 (the “Term Sheet Date”). If the
Purchaser sold products to such customer prior to the Term Sheet Date, the Purchaser may
continue to sell such products to, and solicit sales of such products from, such customer
during the Restricted Period. In addition, during the Restricted Period, Purchaser shall
not solicit the employment or employ any individual employed by the Company as of the
Term Sheet Date. 






	 	7.8 	Covenants
with Respect to Taxes.  






	 	7.8.1. 	The
Company shall grant to Purchaser or its designees access at all reasonable
               times to all of the Company’s books and records (including tax
workpapers                and returns and correspondence with tax authorities), including
the right to                take extracts therefrom and make copies thereof, to the
extent the books and                records relate to taxable periods ending on or prior
to or that include the                Closing Date. Purchaser shall (i) grant to Sellers
access at all reasonable                times to all of the Company’s books and
records (including tax workpapers                and returns and correspondence with tax
authorities), including the right to                take extracts therefrom and make
copies thereof, to the extent that the books                and records relate to the
operations of the Company during taxable periods                ending on or prior to or
that include the Closing Date, and (ii) otherwise                cooperate with Sellers
in connection with any audit of Taxes that relate to the                business of the
Company prior to Closing, in each case to the extent relevant to                Sellers’ indemnification
obligations under Section 11 hereof.  






	 	7.8.2. 	Intentionally
omitted.  






The Sellers and the Purchaser will
use their best efforts to agree upon an allocation of the total purchase price on IRS Form
8883 if such form is required, and in the absence of an agreement the parties shall
designate an accounting firm to determine the allocation, which determination shall be
binding on the parties. The parties confirm that it is their intention that the entire
Closing Consideration, consisting of the Cash Payment, the Consideration Shares and the
Contingent Consideration shall qualify for capital gains treatment for purposes of the
Sellers’ Federal and State Income Tax Returns. Purchaser shall reimburse Sellers for
any additional tax (including the tax on the reimbursement amounts) which results to
Sellers if any portion of the Closing Consideration is determined to be ordinary income
rather than capital gains by reason of Purchaser’s allocation to any asset of the
Company of an amount in excess of the book value thereof as of the Closing Date. 











	 	7.8.3. 	[Reserved] 







	 	7.8.4. 	Purchaser
shall be responsible for preparing and filing, or causing the Company                to
prepare and file, all Tax Returns of the Company required to be filed after
               September 30, 2007 (the “Tax Cut-off  Date”). Sellers
shall be                responsible for all Taxes that are applicable to the Company for
the period                commenced January 1, 2007 and ended on the Tax Cut-off Date and
shall be                entitled to all Tax credits and benefits under applicable law
which relate to                such period. Wherever possible, a short period return
shall be filed for the                period commencing January 1, 2007 and ending on the
Tax Cut-off Date or if not                possible, on the Closing Date. If such short
period return cannot be filed as to                any Tax, then, for purposes of this
Agreement, in the case of any period that                begins before the Tax Cut-off
Date and ends after the Tax Cut-off Date, any Tax                based directly or
indirectly on gross or net income or receipts or imposed in                respect of
specific transactions, and any credits available with respect to any                Tax,
shall be allocated by assuming that the taxable period ended on the Tax
               Cut-off Date, and any other Tax shall be allocated based on the number of
days                in the taxable period ending on the Tax Cut-off Date divided by the
total number                of days in the taxable period  






	 	7.8.5. 	The
parties acknowledge that the Company has elected to be taxed as a subchapter
               S corporation for federal and state Income Tax purposes and that the
Company                will cease to be an S corporation on the Closing Date. It is the
intent of the                parties that the tax burden of the Federal and State Income
Tax on the net                income of the Company for the portion of the Company’s
2007 taxable year                prior to the Closing Date while the Company will be an S
corporation shall be                borne by each Seller to the extent that income is
distributable to the Sellers                pursuant to the provisions of Section 4.2.7.  






	 	7.8.6. 	Anything
set forth in Sections 7.8.4 and 7.8.5 to the contrary notwithstanding,                the
parties agree that the entire profit before tax of the Company from January
               1, 2007 to the Tax Closing Date of September 30, 2007 shall be belong to
and be                distributed to the Sellers within five days of Closing. Date.
Sellers shall be                responsible for all federal and state taxes applicable to
such distribution.  






	 	
Any
profit from the Tax Closing Date to the Closing Date shall remain with the Company and
Purchaser shall reimburse Sellers for the full amount of federal and state taxes due from
Sellers (including any tax on the reimbursement amounts) with respect to such profit as
determined by the Sellers’ accountant. The amount due Sellers under this
Subparagraph 7.8.6 shall be payable to Sellers not later than January 15, 2008.  






	8.  	Conditions
to Purchaser’s Obligation to Close. The           obligation of the
Purchaser to purchase the Sold Shares and issue the           Consideration Shares at the
Closing is subject to the fulfillment at or before           the Closing of the following
conditions precedent, any one or more of which may           be waived in whole or in
part by and at the sole discretion of the Purchaser: 






	 	8.1 	Representations
and Warranties. The representations and warranties made by the Company and each of
the Sellers in this Agreement shall have been true and correct in all material respects
when made, and shall be true and correct in all material respects as of the Closing as if
made on the date of the Closing. 






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	 	8.2 	Covenants.
All covenants, agreements, and conditions contained in this Agreement to be performed or
complied with by the Sellers and/or the Company prior to the Closing shall have been
performed or complied with by the Sellers and the Company, as the case may be, prior to
or at the Closing. 






	 	8.3 	No
Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction, which prohibits the consummation of any
of the transactions contemplated by this Agreement. 






	 	8.4 	Company
Approvals. The Company and the Sellers shall have secured all permits, consents,
approvals and authorizations that shall be necessary or required of them lawfully to
consummate the transaction contemplated by this Agreement and to transfer the Sold Shares
to be purchased by the Purchaser at the Closing (“Company Approvals”).
Sellers and the Company shall diligently pursue the application for and obtaining of the
Company Approvals and shall keep Purchaser advised with respect thereto. A list of
Company Approvals is set forth on Schedule 8.4. 






	 	8.5 	Delivery
of Documents. All of the documents to be delivered to the Purchaser pursuant to
Section 2 shall have been fully-executed (if applicable) by all parties whose names
appear as intended signatories thereto (other than the Purchaser), and delivered to the
Purchaser. 






	 	8.6 	Purchaser
Approvals. Purchaser shall have secured all permits, consents, approvals and
authorizations, that are not Company Approvals, necessary or required for Purchaser to
lawfully consummate the transaction contemplated by this Agreement (“Purchaser
Approvals”). Purchaser shall diligently pursue the application for and obtaining
of the Purchaser Approvals and shall keep Sellers advised with respect thereto. A list of
Purchaser Approvals is set forth on Schedule 8.6. 






	 	8.7 	Notices
to NASDAQ the TASE and the ISA. The Purchaser shall have made all required filings of
notices with NASDAQ, the Tel Aviv Stock Exchange and the Israel Securities Authority and
has received no notice which adversely affects the performance of the transactions
contemplated hereunder. The Purchaser shall use its commercially reasonable efforts to
complete such filings. 






	 	8.8 	Proceedings
and Documents. All corporate and other proceedings of the Company and the Sellers in
connection with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory in substance and form to
the Purchaser and its counsel, and the Purchaser and its counsel shall have received all
such counterpart originals or certified or other copies of such documents as the
Purchaser or its counsel may reasonably request. 






	 	8.9 	Absence
of Adverse Changes. From the date hereof until the Closing, there will have been no
material adverse change in the financial or business condition of the
Company. 






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	 	8.10 	Due
Diligence. The Purchaser shall have completed the legal and financial due diligence
review of the Company, to the sole and complete satisfaction of the
Purchaser. 






	 	8.11 	Intentionally
deleted.  






	 	8.12 	Company
Lease. The Company’s existing lease for its business premises with the owners of
such property shall be in full force and effect without modification. At the Closing,
Sellers shall deliver an instrument executed on behalf of the Company and such owner
confirming such status and that neither is in default under the lease. 






	 	8.13 	Drop
Dead Date. If, for any reason other than a material default by Purchaser of its
obligations under this Agreement, all of the conditions to Purchaser’s obligation to
close have not been satisfied or waived by Purchaser by January 1, 2008, then Purchaser,
by written notice to Sellers shall have the right to terminate this Agreement whereupon
the Deposit shall be returned to Purchaser and neither party shall have any further
obligation to the other except as set forth in Sections 7.6 and 7.7. 






	 	8.14 	IRS
Form 8023. The Sellers shall have delivered to the Purchaser a properly executed IRS
Form 8023 (as well as all similar state or local tax forms designed in writing by the
Purchaser to the Sellers at least five Business Days prior to the Closing Date) if such
form or forms is required to be filed under applicable law. 






	9. 	Conditions
to Sellers’ Obligation to Close. The Sellers’obligation to sell
the Sold Shares at the Closing are subject to the fulfillment, at the discretion of the
Sellers, at or before the Closing of the following conditions precedent, any one or more
of which may be waived in whole or in part by the Sellers: 






	 	9.1. 	Representations
and Warranties. The representations and warranties made                by the
Purchaser in this Agreement shall have been true and correct in all
               material respects when made, and shall be true and correct in all material
               respects as of the Closing as if made on the date of the Closing. 






	 	9.2. 	Covenants.
All covenants, agreements, and conditions contained in this                Agreement to
be performed or complied with by the Purchaser prior to the Closing                shall
have been performed or complied with by the Purchaser prior to or at the
               Closing. 






	 	9.3. 	No
Injunction. No statute, rule, regulation, executive order, decree,
               ruling or injunction shall have been enacted, entered, promulgated or
endorsed                by any court or governmental authority of competent jurisdiction,
which                prohibits the consummation of any of the transactions contemplated
by this                Agreement. 






	 	9.4. 	Consents,
etc. The Purchaser shall have secured all permits, consents and
               authorizations that shall be necessary or required of it lawfully to
consummate                the transactions contemplated by this Agreement and to issue
the Consideration                Shares to be issued at the Closing. 






	 	9.5. 	Delivery
of Documents. All of the documents to be delivered to the                Sellers
pursuant to Section 2 shall have been fully-executed (if applicable) by
               all parties whose names appear as intended signatories thereto (other than
the                Sellers), and delivered to the Sellers or the Company. 






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	 	9.6. 	Approvals.
The Purchaser and the Company shall have received the                applicable Corporate
Approvals set forth on Schedule 8.4               with respect to
the transactions contemplated hereby. 






	 	9.7. 	Proceedings
and Documents. All corporate and other proceedings of the                Purchaser in
connection with the transactions contemplated by this Agreement and                all
documents and instruments incident to such transactions shall be
               satisfactory in substance and form to the Sellers, and the Sellers shall
have                received all such counterpart originals or certified or other copies
of such                documents as the Sellers may reasonably request. 






	 	9.8. 	Drop
Dead Date. If, for any reason other than a material default by the
               Company or Sellers of their obligations under this Agreement, all of the
               conditions to Sellers’ obligation to close have not been satisfied or
               waived by Sellers by January 1, 2008, then Sellers, by written notice to
               Purchaser shall have the right to terminate this Agreement whereupon the
Deposit                shall be returned to Purchaser and neither party shall have any
further                obligation to the other except as set forth in Sections 7.6 and
7.7. 






	10.  	Termination.  






	 	10.1. 	This
Agreement may be terminated at any time prior to the Closing Date: 






	 	10.1.1. 	by
mutual agreement of the Sellers and the Purchaser;  






	 	10.1.2. 	by
the Purchaser if there has been a material breach of any representation,
               warranty, covenant or agreement contained in this Agreement on the part of
the                Company or the Sellers or if Purchaser’s due diligence
examination shall                reveal conditions not acceptable to the Purchaser in its
sole discretion.  






	 	10.1.3. 	by
the Purchaser if there shall be any action taken, or any law promulgated or
               issued or determined to be applicable to this agreement, by any
governmental or                regulatory authority, which would prohibit the Purchaser’s
ownership of the                Company;  






	 	10.1.4. 	by
the Sellers if there has been a material breach of any representation,
               warranty, covenant or agreement contained in this Agreement on the part of
the                Purchaser.  






	 	10.2	In
the event of a valid termination of this Agreement as provided in this Section, the
Deposit Escrow Agent shall return the Deposit to Purchaser, and neither party shall have
any further rights or obligations hereunder except for pursuant to Sections 7.6
(Confidentiality) and 7.7 (Non-Solicitation) of this Agreement, provided, however, that
the parties shall each remain liable for any breaches of this Agreement prior to its
termination. 






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	11  	Indemnification
and Remedies  






	 	11.1. 	Subject
to the limitations set forth below, from and after the Closing, the
               Sellers agree, jointly and severally, to indemnify, and hold the Purchaser
               harmless against and in respect of any and all loss, liability, deficiency
or                damage, or actions in respect thereof (including reasonable legal fees
and                expenses) and/or any reduction in the value of the Sold Shares
purchased by the                Purchaser hereunder (“Damages”), as and
when incurred,                occasioned by any breach of any obligation of the Sellers
hereunder, any breach                of any representation or warranty of the Sellers or
the Company contained herein                (each such representation and warranty is
deemed to be made on the date of this                Agreement and at the Closing),any
breach of any certificate or other instrument                furnished or to be furnished
by the Sellers hereunder or any Tax for any Taxable                Year or any portion of
a Taxable Year prior to the Closing, all subject to the                terms set forth in
this Section 11. 






	 	11.2. 	From
and after the Closing, the Purchaser agrees to indemnify and hold each of
               the Sellers harmless against and in respect of any Damages, as and when
               incurred, occasioned by any breach of any obligation of the Purchaser
hereunder,                any breach of any representation or warranty of the Purchaser
contained herein                (each such representation and warranty is deemed to be
made on the date of this                Agreement and at the Closing) or any breach of
any certificate or other                instrument furnished or to be furnished by the
Purchaser hereunder. 






	 	11.3. 	Promptly
after (i) receipt by the party making the claim pursuant to this                Section
(or any of its directors, employees and advisors) of notice of the
               commencement of any action, proceeding or investigation; or (ii) the party
               making the claim pursuant to this Section (or any of its directors,
employees                and advisors) becoming aware of any breach of this Agreement or
falsity of                representation, in each case, in respect of which indemnity may
be sought as                provided above, such person (the “Indemnified Party”)
shall                notify the party or parties from whom indemnification is claimed
(the                “Indemnifying Party”) of the claim and, when known,
the facts                constituting the basis of such claim. In the event of any such
claim for                indemnification hereunder resulting from or in connection with
any claim or                legal proceeding by a third party, the notice to the
Indemnifying Party shall                specify, if known, the amount of damages asserted
by such third party. 






	 	11.4. 	Upon
receipt of any such notice from the Indemnified Party, the Indemnifying
               Party shall be entitled to participate in the defense of such claim and
may                assume the defense of such claim at its own expense and by its own
counsel. If                the Indemnifying Party elects to assume the defense of such
claim, the                Indemnified Party shall reasonably cooperate with the
Indemnifying Party in                defending such claim, at the expense of the
Indemnifying Party. The parties                acknowledge and agree that in the event
the Indemnifying Party has properly                assumed the defense of such claims
provided herein, the Indemnified Party shall                be entitled to retain its own
counsel to participate in the defense of such                claim at its own cost and
expense. 






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	 	11.5. 	No
claim shall be settled or compromised by the Indemnifying Party without the
               written consent of the Indemnified Party (which shall not be unreasonably
               withheld) if such settlement or compromise requires the Indemnified Party
to                make any payment or to take or refrain from taking any action or
enjoins the                Indemnified Party or subjects it to other equitable relief or
subjects it to any                potential criminal law, claim or liability. 






	 	11.6. 	Survival
of Claims. Except as set forth in Section 11.8 hereof, the                indemnity
obligations under this Agreement shall survive the execution and the
               delivery of this Agreement and the Closing and remain in full force and
effect                for a period of ten (10) months from the Closing Date or, as to any
tax, for a                period of ten (10) months from the date of notice from the
taxing authority that                such tax is due. Purchaser must submit a written
claim to Seller(s) within such                period or Purchaser shall be barred from
asserting the claim. After the written                claim is submitted, Purchaser must
file suit within 120 days or Purchaser shall                be barred from asserting such
claim unless the 120 day period is mutually                extended by the parties in
writing. 






	 	11.7. 	Limitations
on Claim. Neither Sellers nor Purchaser shall assert any                claim or
series of claims for monetary compensation under this Section 11 or                under
any other provision of this Agreement or under the terms of the Employment
               Agreements unless the Damages sustained by the party making such claim are
at                least $50,000. In such event, any party liable for such Damages shall
be liable                for all Damages, including any amounts below $50,000 but in no
event shall the                total obligation of both Sellers under this Agreement,
their Employment                Agreements or otherwise exceed the lesser of the fair
market value of Three                Hundred and Sixty Thousand (360,000) ordinary shares
of the Purchaser as of the                date of claim or such fair market value as of
the Closing Date, plus Two hundred                Fifty Thousand ($250,000) Dollars. The
aforementioned limitation shall not apply                to: (i) unpaid tax obligations
of the Company which accrued prior to the                Closing; (ii) any debt of the
Company to any third party as of the Closing                (except Accounts Payable and
other liabilities set forth on the Company’s                financial records as of
the Closing Date), and (iii) any Damages related to                claims brought by that
certain employee identified to Purchaser in writing by                Seller as of even
date of this Agreement. The $50,000 minimum set forth in this                section
shall not apply to claims made by the Sellers or either of them against
               the Company or Purchaser for failure to pay any portion of the Purchase
Price,                including the Contingent Consideration or any amount due to Sellers
or either of                them under the terms of the Employment Agreements. The
amounts set forth in this                Subparagraph 11.7 shall constitute the maximum
total amount of Sellers potential                liability to Purchaser and the Company
for all claims for Damages accruing prior                to or after the Closing Date. 






	 	11.8. 	The
limitation of liabilities and remedies set forth in Section 11.7 above shall
               also apply to claims for Damages by Purchaser against Sellers by reason of
acts                or omissions by Seller occurring after the Closing Date except with
respect to                knowing or willful fraud or intentional misconduct occurring
after the Closing                Date. However, all claims by Purchaser must be made to
Seller within ten (10)                months following the first to occur of: (i)
termination of employment by the                Company of the Seller in question or (ii)
the discovery of the act or omission                by Purchaser. In the event Purchaser
institutes litigation against Sellers for                any reason, including breach of
representation or warranty, and all or part of                Purchaser’s claims
against Seller are adjudicated in Seller’s favor                (or if Purchaser
shall voluntarily dismiss all or part of such claims), then                Sellers shall
be entitled to be reimbursed by Purchaser for Sellers’ legal                fees and
costs of defense applicable to the causes of action upon which Seller                has
prevailed in such litigation. 






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	 	11.9. 	The
remedies specified in this Section 11 shall be the sole and exclusive remedy
               to which either party is entitled with regard to any Damages under this
               Agreement and under the Employment Agreement entered into by Sellers
pursuant to                this Agreement or for any other cause or matter; except that
the provisions of                Sections 7.6 (Confidentiality) and 7.7
(Non-Solicitation) which shall be                enforceable by a decree of specific
performance or equivalent equitable relief,                issued on a temporary or
permanent basis, without the requirement of the filing                of any bond or
other security by the Seller, and application for such relief                shall not
bar application for other relief for breach by the Purchaser of its
               obligations pursuant to Sections 7.6 and 7.7. All references to
               “Purchaser” shall be deemed to refer also to the Company
following the                Closing Date so that limitations applicable to Purchaser
cannot be avoided by                the assertion of claims against the Sellers, or
either of them, by the Company. 






	12  	Miscellaneous  






	 	12.1. 	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 and the
intention                of the parties as reflected hereby. 






	 	12.2. 	Governing
Law; Jurisdiction. This Agreement shall be governed by and                construed
according to the laws of the State of New York, without regard to the
               conflict of laws provisions thereof. Any dispute arising under or in
relation to                this Agreement shall be resolved in the Federal Court for the
Southern District                of New York only, and each of the parties hereby submits
irrevocably to the                exclusive jurisdiction of such court. 






	 	12.3. 	Expenses.
Each of the parties hereto shall be responsible for its own                costs and
expenses (including legal fees) in connection with this Agreement and                any
other documents or actions relating to the transactions contemplated by this
               Agreement. All stamp duty and filing fees payable in respect of this
Agreement                or the transfer of shares as contemplated hereby shall be borne
equally by the                Sellers, on the one hand, and the Purchaser, on the other. 






	 	12.4. 	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 set forth
in,                arising under, or created by this Agreement may be assigned or
transferred                without the prior consent in writing of each party to this
Agreement. Any                provision of this Agreement notwithstanding, upon the death
of either Donald                Levi or Andrew Levi, such deceased Seller’s heirs,
executors, personal                representatives and estate shall have no liability
whatsoever for any obligation                of such deceased Seller except for the
amount of any judgment entered against                such deceased Seller in favor of
Purchaser prior to his date of death or for any                obligation acknowledged by
such deceased Seller in a written document signed by                him after the Closing
Date or for any loan made to such deceased Seller after                the Closing Date.
Nothing herein shall be deemed to modify the limitation of                liabilities set
forth in Section 11.7 above. 






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	 	12.5. 	Entire
Agreement. This Agreement and the Schedules and Exhibits attached
               hereto constitute the full and entire understanding and agreement between
the                parties with regard to the subject matters hereof and thereof. 






	 	12.6. 	Notices,
etc. All notices and other communications required or permitted
               hereunder to be given to a party to this Agreement shall be in writing and
shall                be faxed 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 in Schedule A, as the
case                may be, 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 Purchaser: 






	 	
B.O.S Better Online Solutions Ltd.

20 Freiman Street

Rishon LeZion, 75100, Israel



Attention: Chief Financial Officer

Facsimile: (972) 3 954-1003



with a copy to:



Amit, Pollak, Matalon & Co., 17 Yitzhak

Sadeh Street, 19th Floor

Tel Aviv 67775

Attention: Shlomo Landress, Adv.



Facsimile: (972) 3 568-9001 







	 	
If
to the Company: 






	 	
Summit Radio Corp.

1008 Teaneck Road,

Teaneck, New Jersey 07666

Facsimile: (201) 837-8839
 












	 	
If
to Sellers: 






	 	
Andrew Levi

4 Deer Trail

Franklin Lakes, New Jersey 07417
 






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and 






	 	
Donald Levi

42 Mill Road Extension

Woodcliff Lake, New Jersey 07677
 













	 	
With
a copy for all Company and Seller                                     communications to: 






	 	
Neil I. Kilstein, Esq.

Kilstein & Kilstein, LLC

611 River Drive, Suite 320

Elmwood Park, New Jersey 07407

Facsimile:  (201) 791-7797
 













	 	
Any
notice sent in accordance with this Section 12.6 shall be effective (i) if mailed, three
(3) business days after mailing, (ii) if sent by messenger, upon delivery, and (iii) if
sent via facsimile, 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). 






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






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






	 	12.9. 	Counterparts.
This Agreement may be executed in any number of                counterparts, each of
which shall be deemed an original and enforceable against                the parties
actually executing such counterpart, and all of which together shall
               constitute one and the same instrument. 






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	 	12.10. 	Independent
Agreement. The rights and obligations of the Sellers, the                Company and
the Purchaser under the terms of this Agreement shall be entirely
               independent of any rights and obligations of such parties under the Andrew
Levi                Employment Agreement or the Donald Levi Employment Agreement (the
               “Employment Agreements”). Specifically, the Sellers shall
not                have the right to terminate, rescind, modify or seek damages under
this                Agreement by reason of the breach or alleged breach by the Company of
its                obligations under the Employment Agreement, and the Purchaser shall
not have the                right to terminate, rescind, modify or seek damages under
this Agreement by                reason of the breach or alleged breach by a Seller of
his obligations under any                Employment Agreement.






	 	12.11. 	Old
Inventory. Certain inventory of the Company which is not included in
               the inventory records of the Company as set forth in Schedule 12.11               hereto
(“Old Inventory”) shall be transferred by the Company to
               one or both of Sellers prior to Closing. This Old Inventory need not be
removed                from the basement of the Company’s building for at least two
years from the                Closing Date until sold or transferred to a third party.
Purchaser upon serving                one hundred twenty (120) prior written notice shall
be permitted to specify the                date of the removal of any remaining Inventory
by a date no sooner than two                years from the Closing Date (the “Removal
Date”). Sellers may                utilize the services of employees of the
Company in connection with the sale and                shipping of the old Inventory.
Sellers may remove such Old Inventory upon its                sale or other disposal, in
whole or in part, and the net proceeds of sale or                other deposition shall
be Sellers’ sole property. Sellers shall bear the                risk of loss with
respect to the Old Inventory and costs (other than labor) of                its removal.
If the Old Inventory is not sold or otherwise transferred to a                third
party, Sellers shall remove the Old Inventory from the Company premises by
               the Removal Date. If Sellers fail to remove the Old Inventory by the
Removal                Date, Purchaser may do so at Seller’s cost and expense. The
activities of                Sellers with respect to the Old Inventory authorized under
this Subparagraph                shall not be deemed to violate the Employee Covenants of
Unauthorized                Disclosure, Noncompetition, and Non-solicitation set forth in
the Employment                Agreements. 






	 	12.12. 	Sellers
Vehicles and Life Insurance. The vehicles and life insurance                policies
listed on Schedule 12.12 shall be transferred by the Company to Sellers
               prior to the Closing. It is understood that Andrew Levi is trading in his
               existing vehicle for a new vehicle of similar nature which will be
transferred                by the Company to him either before or after the Closing. 






	 	12.13. 	ISRA.
Following execution of this Agreement, Sellers and the Company                shall
promptly apply to the ISRA Bureau of the New Jersey Department of
               Environmental Protection for a Non-Applicability Determination, and
furnish                Purchaser with a copy of the affidavit supporting such
application. If the ISRA                Bureau refuses to issue such determination, then
Sellers shall file such further                applications, pay such fees and perform
such work as may be required for the                obtaining of ISRA Clearance for the
transactions contemplated by this Agreement                provided however, that if the
total cost of obtaining such clearance shall                exceed $100,000, then Sellers
may elect to terminate this Agreement unless                Purchaser agrees to pay the
excess of $100,000. The Closing Date shall be                adjourned, if necessary,
pending receipt of such clearance, whether by de                minimus exemption, no
further action letter or approved remediation plan. 






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	 	12.14. 	Knowledge
of the Company. Whenever the term “knowledge” is used                in
this agreement, it shall mean, with respect to the Sellers and the Company,
               the knowledge of any fact, circumstance, event or other matter in question
after                reasonable inquiry, by either Seller and the Company’s
attorneys and                accountants. 






	 	12.15. 	Acquisition
by Purchaser’s Subsidiary. Purchaser, at his sole                discretion, may
effect the acquisition pursuant to this Agreement through a                wholly owned
subsidiary provided that in any event Purchaser may remain subject                to all
of its obligations hereunder. 






	 	12.16. 	Assignment
by Purchaser to Subsidiary. Purchaser may assign its rights,                subject
to its obligations, under this Agreement to a wholly owned subsidiary of
               Purchaser on written notice to Sellers accompanied by a copy of such
assignment                which shall include the assumption of any applicable Purchaser’s
               obligations by such assignee. Purchaser shall then be jointly and
severally                obligated with such assignee for Purchaser’s obligations
hereunder. However                such assignment shall not be permitted to the extent
that it shall increase                Sellers’ obligations, including tax
obligations or materially increase                their costs related to the transactions
contemplated hereunder. 






[Remainder of page intentionally left blank.] 



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IN
WITNESS WHEREOF the parties have signed this Share Purchase Agreement as of the date
first hereinabove set forth.  







	 				
	 				
	 				
	 				
	 				
	 	B.O.S BETTER ONLINE SOLUTIONS LTD.	SUMMIT RADIO CORP.
	 	 
	 	By:	_________________________	By:	_________________________
	 	Name:	_________________________	Name:	_________________________
	 	Title:	_________________________	Title:	_________________________






	 	
__________________________

DONALD LEVI  







	 	
__________________________

ANDREW LEVI  






- 36 -








SCHEDULE A  







	Name and Address of Seller
	No. of Sold
Shares
	% of Share capital
(fully diluted)
	Consideration

	BOS Shares *
	Cash at Closing**

	 				
					
					
	Donald Levi	 	 	 	10	 	 	50	%	 	180,000	 	$	 2,150,000	 
	Andrew Levi	 	 	 	10	 	 	50	%	 	180,000	 	$	 1,950,000	 
		
		
		
		
	
	         Total  	 	 	 	20	 	 	100	%	 	360,000	 	$	 4,100,000	 







	 *  	The
Consideration Shares shall be placed in escrow.  






	 **  	Includes
the $250,000 Deposit.  






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SCHEDULE B  



MILESTONES FOR
CONTINGENT CONSIDERATION 



(a)     In the
event the Company’s audited financial statements prepared in           accordance
with US GAAP for calendar year 2008 (the “2008 Financial           Statements”),
reflect Net Income of $400,000 (the “Target           Amount”) or more,
then BOS shall pay each Seller a cash payment of           $125,000 on or before April
15, 2009.  



(b)     In the
event the Company’s audited Financial Statements prepared in           accordance
with US GAAP for the calendar year 2009 (the “2009 Financial           Statements”)
reflect Net Income of the Target Amount or more, then BOS           shall pay each Seller
a cash payment of $125,000 on or before April 15, 2010.  



(c)     In the
event Net Income is positive but is less than the Target Amount in           either or
both of 2008 and 2009, the Contingent Consideration payable to each           Seller with
respect to such year shall be $125,000 multiplied by the percentage           the Net
Income of the Company for such year is of the Target Amount.  



(d)     The
determination of whether an annual target has been met shall be made           separately
with respect to each applicable year (i.e. the payment for meeting           Target (b)
is not dependant on the Company meeting Target (a)).  



(e)     In the
computation of Net Income for purposes of Contingent Consideration:  



	 	(i) 	None
of Purchaser’s overhead shall be allocated to the Company. 






	 	(ii) 	All
compensation and other expenses not consistent with the practices of the
               Company prior to the Closing shall be reasonable in scope and amount. 






	 	(iii) 	Purchaser
shall not circumvent Seller’s entitlement to contingent                compensation
by modifying the business practices of the Company from those prior                to the
Closing Date. 






(f)     All
references to Net Income shall be deemed to refer to net income before           Income
(or equivalent) Taxes, interest on borrowing made with respect to the
          acquisition of the Company Shares and amortization.  



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