SHAREHOLDERS AGREEMENT


     THIS SHAREHOLDERS  AGREEMENT (this  "Agreement") is made as of the 18th day
of May, 1999, among SCNV Acquisition Corp. ("SCNV") and Messrs. Herman Branover,
Arik El-Boher and Yuri Gelfgat (together, the "Founders").


                                  WITNESSETH :

     WHEREAS,  the  parties  are  shareholders  in  Elecmatec   Electro-Magnetic
Technologies Ltd. (the "Company"); and

     WHEREAS,  the parties wish to  coordinate  their voting with respect to the
election  of  directors  and  formalize  certain  obligations  of  SCNV  towards
Founders, all in accordance with the terms and conditions of this Agreement.

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

     1.  Voting  Agreement.  Until  the  earlier  of:  (i) the date on which the
aggregate  shareholdings of the Founders in the Company drops below 5%, and (ii)
May 18, 2002, SCNV will vote all of the shares of the Company held by it for the
appointment  of a designee  of the  Founders  to the Board of  Directors  of the
Company.  Prior to each general  meeting of the  shareholders  of the Company in
which  directors  are to be elected,  the  Founders  shall  inform SCNV of their
designee.


     2. Notice of Intention to Sell Shares.  SCNV hereby  undertakes that in the
event the Board of  Directors  of SCNV  makes a  general  decision  to offer its
shares  in the  Company  for sale to one or more  third  parties,  it (i)  shall
immediately inform the Founders of such decision and (ii) shall not enter into a
definitive  agreement  for the sale of its shares in the Company for a period of
forty-five  (45) days  following  such Board of Directors  decision  without the
prior consent of the Founders. Nothing in this Section 2 shall be interpreted or
deemed to (A) prevent  SCNV from  entering  into a letter of intent with a third
party for the sale of SCNV's  shares in the Company and  submitting  a notice to
the Company  pursuant to Article 20(c)(i) during such forty-five (45) day period
or (B) require  SCNV to comply  with  clauses (i) and (ii) above in the event an
unsolicited  third party  approaches SCNV and offers to acquire SCNV's shares in
the Company.

     3. Term.  This  Agreement  shall  terminate  and be of no further  force or
effect upon the initial public offering of any of the Company's securities.

     4. Miscellaneous.


     4.1  Governing  Law.  This  Agreement  shall be governed  by and  construed
according to the laws of the State of Israel,  without regard to the conflict of
laws provisions thereof.


<PAGE>


     4.2 Entire Agreement;  Amendment and Waiver. This Agreement constitutes the
full and entire  understanding  and agreement between the parties with regard to
the  subject  matters  hereof and  thereof.  Any term of this  Agreement  may be
amended  and  the   observance  of  any  term  hereof  may  be  waived   (either
prospectively or retroactively and either generally or in a particular instance)
only with the written consent of all parties hereto.

     4.3  Notices,  etc.  All  notices  and  other  communications  required  or
permitted hereunder to be given to a party to this Agreement shall be in writing
and shall be  telecopied  or mailed by  registered  or certified  mail,  postage
prepaid,  or  otherwise  delivered  by hand or by  messenger,  addressed to such
party's address as the party shall have furnished to each other party in writing
in accordance with this provision.

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


SCNV Acquisition Corp.

By: /s/ Shaul Lesin
    ------------------------
Name: Shaul Lesin                                 /s/ H. Branover
Title: E.V.P.                                     ------------------------------
                                                  Professor Herman Branover


/s/ Y. Gelfgat                                    /s/ Arik El-Boher
-----------------------------                     ------------------------
   Professor Yuri Gelfgat                         Dr. Arik El-Boher


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