LOAN AGREEMENT


     This Loan Agreement is made and entered into as of this 30 day of December,
1998 by and between SCNV Acquisition Corp., a corporation organized under the
laws of the State of Delaware ( the "Lender"); and Elecmatec Electro-Magnetic
Technologies Ltd., a company organized under the laws of the State of Israel
("Borrower").


     WHEREAS Borrower has borrowed $42,000 (the "Original Amount") from Lender;
and

     WHEREAS Borrower desires to (i) borrow an additional amount of $68,000 (the
"Additional Amount") from Lender for the purposes specified in Section 3 below
and (ii) have Lender provide it with a guarantee in the amount of $162,000 for
the purposes specified in Section 4, all in contemplation of a proposed
investment in the Borrower by Lender; and

     WHEREAS Lender is willing to lend Additional Amount and to provide such
guarantee to Borrower, subject to the terms and conditions of this Loan
Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. Preamble. The Preamble to this Agreement constitutes an integral part
hereof.

     2. Loan.

     2.01 The Lender shall lend to Borrower and Borrower shall borrow from
Lender the Additional Amount in a single advance, within two business days of
the signing of this Agreement.


     2.02 The Borrower hereby (i) represents that the proceeds of the Original
Amount were used to pay day-to-day expenses of the Borrower during the months of
August to December and (ii) undertakes that the proceeds of the Additional
Amount shall be used to cover the day-to-day expenses of the Borrower for the
months' of December 1998 and January 1999, including the payment of salaries to
the Borrowers' current employees and the payment of fees for the registration of
the Borrower's patents. The Additional Amount and the Original Amount shall
hereinafter be referred to together as the "Loan".

     2.03 The Loan shall be linked to the US dollar and bear interest at the
rate of 8% per year.

     2.04 If there shall be a closing, on or prior to February 1, 1999, of a
private offering of shares of the Borrower as contemplated by the term sheet
among the Lender, the Borrower and Messrs. Herman Branover, Arie El-Boher, Yuri
Gelfgat, Israel Weinbaum and Ariel Shemer, dated December 28, 1998, a copy of
which is attached hereto as Exhibit A, (the "Term Sheet"), then the principal of
the Loan and


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any interest thereon shall be converted into a portion of the loan described in
the Term Sheet under the heading "Loan".

     3. Guarantee. The Lender shall provide a guarantee (the "Guarantee") on
behalf of the Borrower in the amount of $162,000 (one-hundred and sixty-two
thousand US Dollars) in order to enable Borrower to obtain a letter of credit
from Bank Leumi Le'Israel for the purpose of acquiring the following components
for the Borrower's production line: an edge trimmer, shears, a coiler, a roll
table, a milling machine, an emulsion system and a hydrolic station.

     4. Representations, Warranties, And Agreements Of The Borrower. Except as
disclosed in writing to the Lender, the Borrower represents and warrants to, and
agrees with, the Lender as of the date hereof, as follows:

     4.01 Information. To the best of the Borrower's knowledge, information and
belief, all oral and written information which has been given by the Borrower in
the course of the negotiations leading to this Agreement was when given, and is
at the date hereof, true and accurate in all material respects, and all facts
and information concerning the Borrower which the Borrower believes to be
material for disclosure to a creditor of the Borrower have been disclosed to the
Lender.

     4.02 Bankruptcy Proceedings. No officer or director of the Borrower is or
has been subject to any bankruptcy proceedings or is or has been the officer of
any entity which has been the subject of liquidation or insolvency proceedings.

     4.03 Contracts. The Borrower is not in fundamental breach of any deed,
agreement or transaction to which it is a party, and to the best of its
knowledge, no third party that has transacted business with the Borrower is in
breach of any of its material obligations under any deed, agreement, or
transaction to which it is a party with the Borrower. The Borrower has not given
any guarantee, indemnity or security for or otherwise agreed to become directly
or contingently liable for any obligation of any other person and no person has
given any guarantee of or security for any obligation of the Borrower.

     4.04 Litigation. The Borrower is not involved in any civil, criminal or
arbitration proceedings, and to the best of the Borrower's knowledge,
information and belief, no such proceedings and no claims of any nature are
pending or threatened by or against the Borrower or the directors of the
Borrower and there are no facts likely to give rise to any such proceedings. The
Borrower shall promptly notify the Lender of any legal proceedings that arise in
which the Borrower is involved, and shall provide Lender with all relevant
documents concerning such proceedings.

     4.05 Debts and Loan Facilities. There are no debts owing by or to the
Borrower, except as has been disclosed to Lender in writing, nor has the
Borrower lent any money which has not yet been repaid. Full and accurate details
of all overdrafts, loans or other financial facilities outstanding or available
to the Borrower have been provided in writing to Lender.


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     4.06 Licenses, Patents, Trademarks

     (a) For purposes of this Agreement, "Intellectual Property" means patents,
copyrights, trademarks, inventions, research records, trade secrets,
confidential information, product designs, engineering specifications and
drawings, technical information, formulae, computer programs, and related
flow-charts, programmer notes, updates and data, whether in object source code
form.

     (b) To the best of the Borrower's knowledge, the Borrower either owns or
has sufficient rights by license or other grant of permission with respect to
all Intellectual Property necessary for its business as now conducted and as
proposed to be conducted. The Borrower's use of the Intellectual Property in its
business as now conducted and as proposed to be conducted does not infringe the
rights of any third party. The Borrower has not received any communication
alleging that it has violated, or that by conducting its business as proposed it
would violate, any Intellectual Property. The Borrower has taken reasonable
security measures, including measures against unauthorized disclosure, to
protect the secrecy, confidentiality, and value of its trade secrets and other
technical information and is in the process of entering into agreements with its
employees to protect all existing and future Intellectual Property of the
Borrower. No employee, director or Shareholder of the Borrower or employer of
any such employee of the Borrower has any rights to processes, systems and
techniques used or contemplated to be used by the Borrower.

     (c) To the best of the Borrower's knowledge, no Intellectual Property used
or proposed to be used in the business of the Borrower, as currently conducted
or contemplated, has infringed or will infringe upon any intellectual property
rights of others and the use of such Intellectual Property in the business of
the Borrower, as currently conducted or contemplated, will not constitute an
infringement, misappropriation or misuse of any intellectual property rights of
any third party. To the best of the Borrower's knowledge, no person has the
right to assert any claim regarding the use of, or challenging or questioning
the Borrower's right or title in, any of the Intellectual Property of the
Borrower.

     4.07 Validity of Transaction. The Borrower has all requisite power and
authority to execute, deliver, and perform this Agreement. All necessary
corporate proceedings of the Borrower have been duly taken to authorize the
execution, delivery, and performance of this Agreement by the Borrower. This
Agreement is the legal, valid, and binding obligation of the Borrower, and is
enforceable as to the Borrower in accordance with its terms.

     5. Repayment of the Loan. In the event that the Borrower and Lender do not
close the transactions contemplated by the Term Sheet as set forth in Section
2.03 (the "Private Placement") by February 1, 1999, the Borrower shall repay the
principal amount of the Loan and any interest thereon in full, and shall cause
the Guarantee to be terminated, by no later than February 15, 1999.

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     6. Negative Covenants. So long as any principal of the Loan or any interest
thereon remains outstanding, or until the Private Placement as defined in
Section 2 above, Borrower will not, without receipt of the Lender's prior
written approval:

     6.01 Debt. Create, incur, assume, or suffer to exist any debt beyond
existing debt, except debt of Borrower under this Agreement or the Loan, and
debt reasonably incurred in the ordinary course of business.

     6.02 Mergers, Etc. Wind up, liquidate or dissolve itself, reorganize, merge
or consolidate with or into, or convey, sell, assign, transfer, lease, or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to any person or entity.

     6.03 Dividends. Declare or pay any dividends; or make any distribution of
assets to Borrower's shareholders as such whether in cash, assets, or
obligations of Borrower; or make any other distribution by reduction of capital
or otherwise in respect of any shares of Borrower's capital shares.

     6.04 Sale of Assets. Sell, lease, assign, transfer, or otherwise dispose of
any of its now owned or hereafter acquired assets (including, without
limitation, receivables, and leasehold interests).

     6.05 Subsidiaries. Incorporate, register, establish or invest in any
subsidiary company or corporation.

     6.06 Guaranties, Etc. Assume, guaranty, endorse, or otherwise be or become
directly or contingently responsible or liable for obligations of any person or
entity.

     6.07 Transactions with Affiliates. Enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate, except the Lender. For purposes of this
Section, the term "Affiliate" shall mean a shareholder, director or employee of
the Borrower.

     7. Security. As security for the Borrower's obligations hereunder, the
Borrower hereby pledges to the Lender all rights that it holds to all
Intellectual Property and all its physical assets, and grants to the Lender a
lien thereto and security interest therein. In this connection, as a condition
of obtaining the proceeds of the Loan, the Borrower shall sign a pledge
agreement in the form attached as Exhibit B hereto.

     8. Default. Any principal outstanding will immediately become due and
payable upon any Event of Default as defined herein. The occurrence of any of
the following shall be an Event of Default:

     8.01 any material breach by Borrower of any of its obligations or
representations under this Agreement;

     8.02 the commencement by Borrower of any liquidation proceedings or the
adoption of a winding up resolution by the Borrower, or the appointment of a
receiver

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or trustee over the whole or any part or Borrower's assets, or the calling by
Borrower of a meeting of creditors for the purpose of entering into a scheme or
arrangement with them;

     8.03 the levy of an attachment or the institution of execution proceedings
against the whole or a substantial part of Borrower's assets. The Borrower shall
notify Lender within 72 hours of any such attachment or proceeding.

     9. Heiter Iska. The terms of this Agreement shall be subject to a Heiter
Iska according to the opinion of Maharam.

     10. Entire Agreement. This Agreement constitutes the entire understanding
of the parties with respect to the subject matter hereof. This Agreement may not
be modified or amended except by a written agreement signed by the parties
hereto.

     11. Governing Law. This agreement shall be governed by the laws of the
State of Israel. Any dispute arising under or in connection with this Agreement
shall be settled exclusively before the courts of the State of Israel.

     IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of the
date first above written.


SCNV Acquisition Corp.                                Elecmatec Electro-Magnetic
                                                      Technologies Ltd.

By: /s/ Shaul Lesin                                   By: /s/ Arik El-Boher
    -----------------------                               ---------------------
Name: Shaul Lesin                                     Name: Arik El-Boher
Title: E.V.P.                                         Title: CFO