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                                                                   Exhibit 10.16
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                              FORM OF DIRECTOR AND
                          OFFICER INDEMNITY AGREEMENT




This Indemnification Agreement (the "Agreement"), dated as of __________,
between ViryaNet Ltd., an Israeli company (the "Company"), and [insert name of
Officer Holder], the [insert position of the Officer Holder] of the Company (the
"Indemnitee").

WHEREAS,    Indemnitee is a director or officer of the Company;

WHEREAS,    both the Company and Indemnitee recognize the increased risk of
            litigation and other claims being asserted against directors and
            officers of public companies;

WHEREAS,    the Articles of Association of the Company authorize the Company
            to indemnify and advance expenses to its directors and officers to
            the fullest extent permitted by law and to undertake to take such
            actions

WHEREAS,    the shareholders of the Company, the Board of Directors of the
            Company and the Audit Committee thereof, have approved the terms of
            this Agreement and have authorized the Company to enter into an
            agreement containing such term with the Indemnitee, as required
            under applicable provisions of Israeli law; and

WHEREAS,    in recognition of Indemnitee's need for substantial protection
            against personal liability in order to assure Indemnitee's continued
            service to the Company in an effective manner and Indemnitee's
            reliance on the aforesaid Articles of Association and, in part, to
            provide Indemnitee with specific contractual assurance that the
            protection promised by the Articles of Association will be available
            to Indemnitee (regardless of, among other things, any amendment to
            or revocation or any change in the composition of the Company's
            Board of Directors or acquisition of the Company), the Company
            wishes to provide in this Agreement for the indemnification of and
            the advancing of expenses to Indemnitee to the full extent (whether
            partial or complete) permitted by law and as set forth in this
            Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

1.   CERTAIN DEFINITIONS

     1.1.   Change in Control:  shall be deemed to have occurred if: (i) any
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            "person" (as such term is used in Section 13(d) and 14(d) of the
            Securities Exchange Act of 1934, as amended), other than a trustee
            or other fiduciary holding securities under an employee benefit plan
            of
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          the Company or a corporation owned directly or indirectly by the
          shareholders of the Company in substantially the same proportions as
          their ownership of shares of the Company, is or becomes the
          "beneficial owner" (as defined in Rule 13d-3 under said Act), directly
          or indirectly, of securities of the Company representing 20% or more
          of the total voting power represented by the Company's then
          outstanding voting securities; or (ii) during any period of two
          consecutive years, individuals who at the beginning of such period
          constitute the Board of Directors of the Company and any new director
          whose election by the Board of Directors or nomination for election by
          the Company's shareholders was approved by a vote of at least two-
          thirds (2/3) of the directors then still in office who either were
          directors at the beginning of the period of whose election or
          nomination for election was previously so approved, cease for any
          reason to constitute a majority thereof; or (iii) the shareholders of
          the Company approve a merger or consolidation of the Company with any
          other corporation, other than a merger or consolidation which would
          result in the voting securities of the Company outstanding immediately
          prior thereto continuing to represent (either by remaining outstanding
          or by being converted into voting securities of the surviving entity)
          at least 80% of the total voting power represented by the voting
          securities of the Company or such surviving entity outstanding
          immediately after such merger or consolidation, or the shareholders of
          the Company approve a plan of complete liquidation of the Company or
          an agreement for the sale or disposition by the Company of all or
          substantially all the Company's assets.

     1.2. Expenses: include attorneys' fees and all other costs, expenses and
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          obligations paid or incurred in connection with investigating,
          defending, being a witness in or participating in (including on
          appeal), or preparing to defend, be a witness in or participate in any
          claim relating to any Indemnifiable Event.

     1.3. Indemnifiable Event:    is, subject to Section 2.1, any event or
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          occurrence related to the fact that Indemnitee is or was an Office
          Holder (as defined in Section 2.1) or an employee, agent or fiduciary
          of the Company, or is or was serving at the request of the Company as
          a director, officer, employee, trustee, agent or fiduciary of another
          corporation, partnership, joint venture, trust or other entity.

2.   INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

     2.1. The Company hereby undertakes to indemnify Indemnitee to the fullest
          extent permitted by applicable law, for any liability and expense that
          may be imposed on Indemnitee due to an act performed or failure to act
          by him in his capacity as an Office Holder, as such term is defined in
          the Companies Law - 5759-1999, of the Company or any subsidiary of the
          Company or any entity in which Indemnitee serves as an Office Holder
          at the request of the Company either prior to or after the date hereof
          (the following shall be hereinafter referred to as "Indemnifiable
          Events"):
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          2.1.1. A financial liability imposed on Indemnitee in favor of another
                 person by a court judgment, including a compromise judgment
                 given as a result of a settlement or an arbitrator's award
                 which has been confirmed by a court; and

          2.1.2. reasonable litigation Expenses, including attorneys' fees,
                 expended by an Indemnitee or which were imposed on an
                 Indemnitee by a court in proceedings instituted against him by
                 the Company or in its name or by any other person or in a
                 criminal charge from which he was acquitted or in a criminal
                 proceeding in which he was convicted for a criminal offense
                 that does not require proof of criminal intent.

     2.2. The indemnification undertaking made by the Company shall be only with
          respect such events described in Exhibit A hereto. The maximum amount
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          payable by the Company under this Agreement for each event described
          in Exhibit A shall be as set forth in Exhibit A.
             ---------                          ---------

     2.3. If so requested by Indemnitee, the Company shall advance an amount (or
          amounts) estimated by it to cover Indemnitee's reasonable litigation
          Expenses, including attorneys' fees, with respect to which Indemnitee
          is entitled to be indemnified under Paragraph 2.1 above.

     2.4. The Company's obligation to indemnify Indemnitee and advance expenses
          in accordance with this Agreement shall be for such period as
          Indemnitee shall be subject to any possible claim or threatened,
          pending or completed action, suit or proceeding or any inquiry or
          investigation, whether civil, criminal or investigative, arising out
          of the Indemnitee's service in the foregoing positions, whether or not
          Indemnitee is still serving in such positions.

     2.5. The Company undertakes that as long as it may be obligated to provide
          indemnification and advance Expenses under this Agreement, the Company
          will purchase and maintain in effect directors and officers liability
          insurance to cover the liability of Indemnitee to the fullest extent
          permitted by law.

3.   GENERAL LIMITATIONS ON INDEMNIFICATION

     3.1. If, when and to the extent that the Indemnitee would not be permitted
          to be so indemnified under applicable law, the Company shall be
          entitled to be reimbursed by Indemnitee (who hereby agrees to
          reimburse the Company) for all such amounts theretofore paid (unless
          Indemnitee has commenced legal proceedings in a court of competent
          jurisdiction to secure a determination that Indemnitee should be
          indemnified under applicable law, in which event Indemnitee shall not
          be required to so reimburse the Company until a final judicial
          determination is made with respect thereto as to which all rights of
          appeal therefrom have been exhausted or lapsed) and shall not be
          obligated to indemnify or advance any additional amounts to Indemnitee
          (unless there has been a determination by a court or
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          competent jurisdiction that the Indemnitee would be permitted to be so
          indemnified under this Agreement).

     3.2. Change in Control of Company.  The Company  undertakes that in the
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          event of a Change in Control of the Company, the Company's obligations
          under this Agreement shall continue to be in effect following such
          Change in Control, and the Company shall take all necessary action to
          ensure that the party acquiring control of the Company shall
          independently undertake to continue in effect such Agreement, to
          maintain the provisions of the Articles of Association allowing
          indemnification and to indemnify Indemnitee in the event that the
          Company shall not have sufficient funds or otherwise shall not be able
          to fulfill its obligations hereunder.

4.   NO MODIFICATION.

     No supplement, modification or amendment of this Agreement shall be binding
     unless executed in writing by both of the parties hereto.  No waiver of any
     of the provisions of this Agreement shall be deemed or shall constitute a
     waiver of any other provisions hereof (whether or not similar) nor shall
     such waiver constitute a continuing waiver.  Any waiver shall be in
     writing.

5.   SUBROGATION.

     In the event of payment under this Agreement, the Company shall be
     subrogated to the extent of such payment to all of the rights of recovery
     of Indemnitee, who shall execute all papers required and shall do
     everything that may be necessary to secure such rights, including the
     execution of such documents necessary to enable the Company effectively to
     bring suit to enforce such rights.

6.   REIMBURSEMENT.

     The Company shall not be liable under this Agreement to make any payment in
     connection with any claim made against Indemnitee to the extent Indemnitee
     has otherwise actually received payment (under any insurance policy or
     otherwise) of the amounts otherwise indemnifiable hereunder. Any amounts
     paid to Indemnitee under such insurance policy or otherwise after the
     Company has indemnified the Indemnitee for such liability or Expense shall
     be repaid to the Company promptly upon receipt by Indemnitee.

7.   EFFECTIVENESS.

     This Agreement shall be of full force and effect immediately upon its
     execution.

8.   NOTIFICATION AND DEFENSE OF CLAIM.

     Promptly after receipt by Indemnitee of notice of the commencement of any
     action, suit or proceeding, Indemnitee will, if a claim in respect thereof
     is to be made against the Company under this Agreement, notify the Company
     of the commencement hereof; but the omission so to notify the Company will
     not
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     relieve it from any liability which it may have the Indemnitee otherwise
     than under this Agreement. With respect to any such action, suit or
     proceeding as to which Indemnitee notifies the Company of the commencement
     thereof and without limitation of Section 2.1:

     8.1. The Company will be entitled to participate therein at its own
          expense; and

     8.2. Except as otherwise provided below, to the extent that it may wish,
          the Company jointly with any other indemnifying party similarly
          notified will be entitled to assume the defense thereof, with counsel
          reasonably satisfactory to Indemnitee. After notice from the Company
          to Indemnitee of its election to assume the defense thereof, the
          Company will not be liable to Indemnitee under this Agreement for any
          legal or other expenses subsequently incurred by Indemnitee in
          connection with the defense thereof other than reasonable costs of
          investigation or as otherwise provided below. Indemnitee shall have
          the right to employ its counsel in such action, suit or proceeding,
          but the fees and expenses of such counsel incurred after notice from
          the Company of its assumption of the defense thereof shall be at the
          expense of Indemnitee unless: (i) the employment of counsel by
          Indemnitee has been authorized by the Company; (ii) Indemnitee shall
          have reasonably concluded that there may be a conflict of interest
          between the Company and the Indemnitee in the conduct of the defense
          of such action; or (iii) the Company shall not in fact have employed
          counsel to assume the defense of such action, in each of which cases
          the fees and expenses of counsel shall be at the expense of the
          Company. The Company shall not be entitled to assume the defense of
          any action, suit or proceeding brought by or on behalf of the Company
          or as to which the Indemnitee shall have made the conclusion provided
          for in (ii) above.

     8.3. The Company shall not be liable to indemnify the Indemnitee under this
          Agreement for any amounts paid in settlement of any action or claim
          effected without its written consent. The Company shall not settle any
          action or claim in any manner which would impose any penalty or
          limitation on the Indemnitee without the Indemnitee's written consent.
          Neither the Company nor the Indemnitee will unreasonably withhold
          their consent to any proposed settlement.

9.   NON-EXCLUSIVITY.

     The rights of the Indemnitee hereunder shall not be deemed exclusive of any
     other rights he may have under the Company's Articles of Association or
     applicable  law or otherwise, and to the extent that during the
     Indemnification Period the rights of the then existing directors and
     officers are more favorable to such directors or officers than the rights
     currently provided thereunder or under this Agreement to Indemnitee,
     Indemnitee shall be entitled to the full benefits of such more favorable
     rights.
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10.  BINDING EFFECT.

     This Agreement shall be binding upon and inure to the benefit of and be
     enforceable by the parties hereto and their respective successors, assigns,
     including any direct or indirect successor by purchase, merger,
     consolidation or otherwise to all or substantially all of the business
     and/or assets of the Company, spouses, heirs and personal and legal
     representatives.  This Agreement shall continue in effect during the
     Indemnification Period, regardless of whether Indemnitee continues to serve
     as an officer or director of the Company or of any other enterprise at the
     Company's request.

11.  SEVERABILITY.

     The provisions of this Agreement shall be severable in the event that any
     provision hereof (including any provision within a single section,
     paragraph or sentence) is held by a court of competent jurisdiction to be
     invalid, void or otherwise unenforceable, and the remaining provisions
     shall remain enforceable to the fullest extent permitted by law.

12.  GOVERNING LAW.

     This Agreement shall be governed by and construed and enforced in
     accordance with the laws of the State of Israel.

13.  ENTIRE AGREEMENT AND TERMINATION.

     This Agreement represents the entire agreement between the parties; and
     there are no other agreements, contracts or understandings between the
     parties with respect to the subject matter of this Agreement.  No
     termination or cancellation of this Agreement shall be effective unless in
     writing and signed by both parties hereto.


                              ViryaNet Ltd.

________________________      By:_______________________
Name of Office Holder