----

----

|   ASSET PURCHASE AGREEMENT BY AND BETWEEN ELBIT SYSTEMS LTD., as Buyer AND BVR SYSTEMS (1998) LTD., as Seller Dated July 19, 2009  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

----

----

| 1.    | Interpretation; Definitions                                    |   | 4  |
|-------|----------------------------------------------------------------|--------|----|
| 1.1.  | General Interpretation                                         |   | 4  |
| 1.2.  | Definitions                                                    |   | 4  |
| 2.    | Asset Purchase and Liability Assumption                        |   | 8  |
| 2.1.  | Purchase of Assets                                             |   | 8  |
| 2.2.  | Non-Transferable Assets                                        |   | 9  |
| 2.3.  | Assumed Liabilities                                            |   | 10 |
| 2.4.  | Retained Liabilities                                           |   | 10 |
| 2.5.  | Excluded Assets                                                |   | 11 |
| 2.6.  | Further Assurances                                             |   | 11 |
| 3.    | Purchase Price                                                 |   | 11 |
| 3.1.  | Purchase Price                                                 |   | 11 |
| 3.2.  | Purchase Price Adjustments                                     |   | 11 |
| 3.3.  | Allocation of Purchase Price                                   |   | 13 |
| 3.4.  | VAT                                                            |   | 13 |
| 3.5.  | Withholding Tax                                                |   | 13 |
| 4.    | Closing                                                        |   | 13 |
| 4.1.  | Closing                                                        |   | 13 |
| 4.2.  | Conditions to Closing                                          |   | 13 |
| 5.    | Representations and Warranties of Seller                       |   | 17 |
| 5.1.  | Organization, Qualification and Corporate Power                |   | 17 |
| 5.2.  | Authority; No Violation; Due Execution; Etc.                   |   | 18 |
| 5.3.  | Consents                                                       |   | 18 |
| 5.4.  | Financial Statements; No Undisclosed Liabilities               |   | 18 |
| 5.5.  | No Changes                                                     |   | 20 |
| 5.6.  | Tax                                                            |   | 20 |
| 5.7.  | Grants, Incentives and Subsidies                               |   | 21 |
| 5.8.  | Restrictions on Business Activities                            |   | 22 |
| 5.9.  | Title to Properties; Condition of Properties; Absence of Liens |   | 22 |
| 5.10. | Intellectual Property                                          |   | 22 |
| 5.11. | Agreements                                                     |   | 24 |
| 5.12. | Compliance with Laws; Governmental Authorizations              |   | 25 |
| 5.13. | Litigation                                                     |   | 25 |
| 5.14. | Insurance                                                      |   | 26 |
| 5.15. | Environmental Matters                                          |   | 26 |
| 5.16. | Employee Matters                                               |   | 26 |
| 5.17. | Brokers and Finders                                            |   | 27 |
| 5.18. | Related Party Transactions                                     |   | 28 |
| 5.19. | Foreign Corrupt Practices Act                                  |   | 28 |
| 5.20. | Customers, Suppliers and Competitors                           |   | 28 |
| 5.21. | Accounts Receivable; Work-in-Process                           |   | 28 |
| 5.22. | Product Defects; Product Warranties                            |   | 28 |
| 5.23. | Solvency                                                       |   | 29 |
| 5.24. | Disclosure                                                     |   | 29 |
| 5.25. | Tax Matters                                                    |   | 29 |
| 5.26. | Seller SEC Documents                                           |   | 29 |
| 6.    | Representations and Warranties of Buyer                        |   | 29 |
| 6.1.  | Organization, Qualification and Corporate Power                |   | 30 |
| 6.2.  | Authority; No Violation; Due Execution; Etc.                   |   | 30 |
| 6.3.  | Consents                                                       |   | 30 |
| 6.4.  | Brokers and Finders                                            |   | 30 |
| 6.5. | Disclosure    |   | 30 |
|------|---------------|--------|----|
| 6.6. | Due Diligence |   | 30 |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

| 7.     | Conduct Prior to Closing                                    |   | 30 |
|--------|-------------------------------------------------------------|--------|----|
| 7.1.   | Ordinary Course of Seller                                   |   | 30 |
| 7.2.   | Notification of Certain Matters                             |   | 32 |
| 7.3.   | No Negotiation                                              |   | 32 |
| 7.4.   | Access and Investigation                                    |   | 33 |
| 7.5.   | Public Announcements                                        |   | 33 |
| 7.6.   | Commercially Reasonable Efforts                             |   | 33 |
| 8.     | Additional Agreements                                       |   | 33 |
| 8.1.   | Access to Information                                       |   | 33 |
| 8.2.   | Expenses                                                    |   | 34 |
| 8.3.   | Filings and Consents                                        |   | 34 |
| 8.4.   | Non-competition and Non-solicitation                        |   | 34 |
| 8.5.   | Excess Payments                                             |   | 35 |
| 8.6.   | Initial Review Period                                       |   | 36 |
| 8.7.   | Change of Corporate Name of Seller                          |   | 36 |
| 8.8.   | Books and Records                                           |   | 36 |
| 8.9    | No Liquidation                                              |   | 36 |
| 9.     | Employees                                                   |   | 36 |
| 9.1.   | Employee Resignation from Seller                            |   | 36 |
| 9.2.   | Employment by Buyer                                         |   | 36 |
| 9.3.   | Duties Towards Employees                                    |   | 37 |
| 9.4.   | Waiver of Non-Compete, Non Disclosure                       |   | 37 |
| 10.    | Survival of Representations and Warranties; Indemnification |   | 37 |
| 10.1.  | Survival of Representations, Etc.                           |   | 37 |
| 10.2.  | Indemnification                                             |   | 38 |
| 11.    | Termination                                                 |   | 39 |
| 11.1.  | Termination                                                 |   | 39 |
| 11.2.  | Termination Procedures                                      |   | 39 |
| 11.3.  | Effect of Termination                                       |   | 39 |
| 12.    | General Provisions                                          |   | 39 |
| 12.1.  | Notices                                                     |   | 39 |
| 12.2.  | Counterparts                                                |   | 40 |
| 12.3.  | Taxes                                                       |   | 40 |
| 12.4.  | Entire Agreement                                            |   | 40 |
| 12.5.  | Severability                                                |   | 40 |
| 12.6.  | Other Remedies                                              |   | 41 |
| 12.7.  | Governing Law; Jurisdiction                                 |   | 41 |
| 12.8.  | Specific Performance                                        |   | 41 |
| 12.9.  | No Third Party Beneficiaries                                |   | 41 |
| 12.10. | Amendment                                                   |   | 41 |
| 12.11. | Extension; Waiver                                           |   | 41 |
| 12.12. | Successors and Assigns                                      |   | 41 |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

1.      Interpretation; Definitions

  1.1.          General Interpretation.

  1.2.          Definitions.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

2.      Asset Purchase and Liability Assumption

  2.1.          Purchase of Assets

|   | 2.1.1. | the machinery, equipment, fixtures and furniture identified on Schedule 2.1.1 hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.2. | the inventories of Seller wherever located, including raw materials, goods consigned to vendors or subcontractors, work in process, finished goods and goods in transit, all as identified on Schedule 2.1.2 hereto (the “Inventory”);                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.3. | the trade and other amounts and accounts receivable, including the benefit of all collateral, security, guarantees and similar undertakings received or held in connection therewith, all as identified on Schedule 2.1.3 hereto (the “Accounts Receivable”);                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.4. | the prepaid expenses, deposits and rights to refunds from customers, suppliers or other third parties, all as identified on Schedule 2.1.4 hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.5. | the rights and interests of Seller in and to leases, subleases, licenses, contracts (including contracts with respect to the projects identified on the list set forth in Schedule 2.1.5),mortgages, notes, instruments, indentures, restrictions, commitments, obligations or other agreements, whether written or oral, or other similar agreements and rights thereunder, including, without limitation, contracts for the purchase of materials, supplies and services and the sale of products and services and contracts pursuant to which Seller is paid or entitled to royalties, all as identified on Schedule 2.1.5 (the “Contracts”); |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.6. | Seller’s rights in copies of software licensed to Seller by third parties that, as of the Closing Date, is installed on any computer system contained in the Purchased Assets, all as listed in Schedule 2.1.6 hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.7. | copies of the business and financial records, books, ledgers, plans, correspondence, lists, plots, architectural plans, drawings, notebooks, specifications, creative materials, advertising and promotional materials, including participation in market shows, marketing materials, studies, reports, equipment repair, maintenance or service records of Seller, whether written or electronically stored or otherwise recorded (and in the case of the Projects, the original Contracts);                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2.1.8. | Seller’s goodwill and customer lists, including the exclusive right of Buyer to represent itself as carrying on the Business, in each case as used by Seller for, and relating to, Seller’s activities prior to the Closing;                                                                                                                                                                                                                                                                                                                                                                                                                     |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 2.1.9.  | the Seller’s intellectual property rights related to the Business, including (i) all trademark rights, business identifiers, trade dress, service marks, trade names (including the registered trade marks “Ehud” in various countries including those still registered on the name of BVR Technologies Ltd.), brand names, and domain names (including bvrsystems.com, bvrsys.com, bvr.co.il and related domain names); (ii) all copyrights and all other rights associated therewith and the underlying works of authorship; (iii) all patents and all proprietary rights associated therewith; (iv) all contracts or agreements granting any right, title, license or privilege under the intellectual property rights of any third party; (v) all inventions, mask works and mask work registrations, net lists, schematics, enhancements, designs, improvements, know-how, discoveries, improvements, designs, trade secrets, shop and royalty rights, computer software programs or applications (in both source code and object code form), flow charts, diagrams, coding sheets, listings and annotations, programmers’ notes, information, work papers, work product and other materials of any types whatsoever, employee covenants and agreements respecting intellectual property and non-competition and all other types of intellectual property; (vi) all ideas and concepts conceived of or first reduced to practice by Employees (as defined below); and (vii) all registrations of any of the foregoing, all applications therefor, all goodwill associated with any of the foregoing, and all claims for infringement or breach thereof (collectively, the “Seller Intellectual Property Rights”); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.10. | all permits, licenses, orders, ratings and approvals of all national, local or foreign governmental or regulatory authorities or industrial bodies, all as identified on Schedule 2.1.10 hereto (Schedule 2.1.10 also lists and identifies all such permits, licenses, orders, ratings and approvals which are not transferable);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.11. | all rights of Seller to causes of action, lawsuits, judgments, claims and demands of any nature which relate specifically to any of the Purchased Assets or constitute counterclaims, rights of setoff, and affirmative defenses to any claims brought against Seller by third parties relating to such Purchased Assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.12. | all rights in Seller Approved Enterprises and Benefited Enterprises, all as identified on Schedule 2.1.12 hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.13. | all rights in Seller OCS and BIRD programs, all as identified on Schedule 2.1.13 hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.14. | all fixed assets and all other tangible personal property, all as identified on Schedule 2.1.14 hereto together with (i) any spare parts related thereto and (ii) any express or implied warranty by the manufacturers or sellers of any item or component part thereof; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 2.1.15. | the rights and interests of Seller in Seller’s Sub.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 2.2.          Non-Transferable Assets.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 2.2.1. | Both before and for a period of twelve (12) months after the Closing Date, the parties shall cooperate, and Seller shall use its commercially reasonable efforts, to obtain any Required Consents so as to transfer each such Non-Transferable Asset to Buyer without adversely modifying, amending or burdening such Non-Transferable Asset. Any cost associated with such efforts shall be borne by Seller, provided, however, that any cost associated with efforts of Buyer’s employees (including the Transferred Employees) shall be borne by Buyer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 2.2.2. | To the extent that on the Closing Date there is any Non-Transferable Asset outstanding. Seller shall, from and after the Closing Date, cooperate with Buyer in any reasonable and lawful arrangement designed to provide the benefit of such Non-Transferable Asset to Buyer, and Buyer, so long as such benefit is so provided, shall satisfy or perform any liability (back to back with the obligations of the Seller), under or in connection with such Non-Transferable Asset which would be a liability assumed by Buyer if such Non-Transferable Asset were a Purchased Asset. Any commercially reasonable costs associated with such arrangements (except that any payments due upon assignment expressly provided for in such Non-Transferable Asset shall be deemed reasonable) shall be borne by Seller provided, however, that any cost associated with efforts of Buyer’s employees (including the Transferred Employees) shall be borne by Buyer.                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 2.2.3. | At any time after the Closing Date, if any Non-Transferable Asset becomes capable of being sold, assigned, transferred, conveyed or delivered to Buyer without violating any Contract constituting or relating specifically to a Purchased Asset or any Legal Requirement, then, at such time, such Non-Transferable Asset shall be sold, assigned, transferred, conveyed and delivered to Buyer at such time pursuant to the execution and delivery by the parties of an appropriate instrument of assignment with respect to the Non-Transferable Asset (containing representations, warranties and covenants of the parties on substantially the same terms and conditions set forth herein for comparable assets), provided, however, that if and to the extent that Seller has theretofore provided Buyer with comparable assets or compensation for such Non-Transferable Asset acceptable to the Buyer, an equitable adjustment shall be made between Seller and Buyer to effectuate fully the intent of the foregoing provision. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | 2.2.4. | Notwithstanding anything to the contrary contained herein, the receipt of all consents necessary to assign to Buyer the Contracts that are indicated with an asterisk on Schedule 5.3 (the “Required Consent Contracts”)will be a condition to Buyer’s obligation to effect the Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

 2.3.          Assumed Liabilities.

2.4.          Retained Liabilities.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

 2.5.          Excluded Assets.

 2.6.          Further Assurances.

3.      Purchase Price

  3.1.          Purchase Price.

  3.2.          Purchase Price Adjustments.

|   | 3.2.1. | At least twenty-one days prior to the Closing, Seller shall cause to be prepared and delivered to Buyer a detailed report correct as of a date thirty (30) days prior to the Closing Date (the “Project Report Date”),of various financial parameters, as listed in Schedule 3.2.1 hereto, of Seller’s Projects, together with a balance sheet of the Seller correct as of the Project Report Date (collectively, the “Pre-Closing Statement”),certified by the chief financial officer of Seller. The Pre-Closing Statement shall be prepared in accordance with IFRS, and shall present the Net Adjustment Amount (as defined below) in a separate line item. Seller will deliver, together with the Pre-Closing Statement, all the supporting work papers prepared for the calculation of the Net Adjustment Amount and such other supporting documentation as Buyer shall reasonably request. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 3.2.2. | The Pre-Closing Statement shall be reviewed by Somekh Chaikin, Seller’s independent auditors (“Seller Auditors”),whose report the Seller shall make good faith efforts to deliver to Buyer at least five days prior to the Closing but in no event later than forty-eight (48) hours prior to the Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 3.2.3. | At the Closing, Seller shall deliver a detailed report correct as of the date of the Closing, based upon the same parameters as the Pre-Closing Statement, which shall present as a separate line item, the updated Net Adjustment Amount (the “Closing Statement”).The Closing Statement shall be executed by the chief executive officer and chief financial officer of Seller, who shall certify that the Closing Statement accurately presents the data with respect to the Projects and the information included therein and the Net Adjustment Amount as of the Closing Date. The term “Project” means any Seller’s project identified on Schedule 3.2.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2.4. | “Net Adjustment Amount” means (X) total revenue recognized with respect to the Projects minus total payments received by Seller from Projects’ customers; minus, (Y) supplier’s payable debt; minus, (Z) with respect to Projects where cost is recorded on the basis of the “percentage-of-completion” method, total cost recorded with respect to such Projects minus payment actually made with respect to such Projects (Net Adjustment Amount means X-Y-Z).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2.5. | To the extent that the Net Adjustment Amount as of the Closing Date (as shown in the Closing Statement) is not zero (the dollar amount of such figure being referred to herein as the “Project Adjustment”),then the Base Purchase Price shall, for all purposes hereunder, be adjusted by the Project Adjustment (i.e., in the event the Project Adjustment is negative, the Base Purchase Price shall be adjusted downward and in the event the Project Adjustment is positive, the Base Purchase Price shall be adjusted upward); it being understood that Seller may, at anytime prior to Closing, contribute the amount of Project Adjustment in cash (and such cash shall be deemed a Purchased Asset) so that the Net Adjustment Amount as of the Closing Date is zero.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2.6. | No later than 120 days following the Closing Date, Buyer may deliver to Seller (with a copy to the Escrow Agent) a reasonably detailed written notice setting forth its objection to the figure of the Net Adjustment Amount in the Closing Statement (the “Project Claim Notice”),which notice shall consist of (i) Buyer’s proposed changes to the Closing Statement, provided, however, that such proposed changes relate or are connected to any of the cases listed in (A) through (C) below: (A) adjustment of subcontractors cost with respect to the period prior to the Closing, (B) changes to the estimates to complete (ETC) provided by Seller at the Closing, or (C) fines with respect to the period prior to the Closing, (ii) the correct figure in Buyer’s opinion of the Net Adjustment Amount as of the Closing Date, and (iii) consequently, Buyer’s proposed adjustment to the Purchase Price under this Agreement (the “Project Claimed Adjustment”),provided, however, that no such adjustment shall be made if such Project Claimed Adjustment, in the aggregate, is less than $150,000. Seller shall have 14 days to object to the Project Claim Notice by delivering a reasonably detailed written notice to that effect to Buyer (with a copy to the Escrow Agent) setting forth in reasonable detail the basis for such objection (the “Project Objection Notice”).In no event shall the Project Claimed Adjustment be higher than $1,500,000. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2.7. | If Seller fails to deliver such Project Objection Notice within the said 14-day period, then the Project Claimed Adjustment shall be immediately released by the Escrow Agent and paid to Buyer and any residual amount out of the Escrow Amount, if any, shall be released by the Escrow Agent and paid to Seller.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3.2.8. | Notwithstanding the provisions of Section 3.2.7 herein, if Seller delivers such Project Objection Notice in a timely manner, then, the dispute regarding such amount shall be resolved by arbitration in accordance with the Israel Arbitration Law, 1968 (the “Arbitration Law”),before CPA Moshe Peretz of Kesselman & Kesselman (the “Arbitrator”).The Arbitrator shall give his reasoned decision in writing and such decision shall be final and binding upon the parties and shall not be appealable. The Arbitrator shall be subject to the rules and/or regulation of any substantive law (Israeli and foreign laws) and shall not be subject to any evidence rules and/or regulations and the procedures rules and regulations (unless such procedures are required by the Arbitration Law). Arbitrator’s fees and prevailing party reasonable legal expenses shall be paid by the non-prevailing party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  3.3.          Allocation of Purchase Price.

  3.4.          VAT.

  3.5.          Withholding Tax.

4.      Closing

  4.1.          Closing.

  4.2.          Conditions to Closing.

|   | 4.2.1. | Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Seller: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                             |   |
|   |   | 4.2.1.1.                                                                                                                                                                                                                                                                                         | Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects (except for those heretofore qualified by materiality, in which case, no additional standard of materiality shall be applied) on and as of the Closing Date, except for changes contemplated by this Agreement and except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as of the Closing Date. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |   | 4.2.1.2.                                                                                                                                                                                                                                                                                      | No Injunction. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the transactions contemplated hereby shall be in force.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.1.3.                                                                                                                                                                                                                                                                                      | Agreements and Covenants. Buyer shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing, including the exchange of any guarantees provided by Seller under any of the Purchased Assets transferred to Buyer at Closing by guarantees to be provided by the Buyer and “back-to-back” guarantees with respect to Non-Transferable Assets in such a manner as to allow the Seller to release the deposits secured by it as security for such guarantees.                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.1.4.                                                                                                                                                                                                                                                                                      | Closing Documents. The documents required to be delivered by Buyer pursuant to Section 4.2.5 shall have been delivered to Seller and the parties shall enter into a Services Agreement in the form attached hereto as Exhibit B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | 4.2.2. | Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by Buyer: |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.2.1.                                                                                                                                                                                                                                                                                      | Representations and Warranties. The representations and warranties of Seller contained in (i) Section 5 of this Agreement shall be true and correct in all respects on and as of the Closing Date and (ii) the other sections of this Agreement, shall be true and correct in all material respects (except for those heretofore qualified by materiality, in which case, no additional standard of materiality shall be applied) on and as of the Closing Date, in each case, except for changes contemplated by this Agreement and except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as of the Closing Date. |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.2.2.                                                                                                                                                                                                                                                                                      | No Injunction. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the transactions contemplated hereby shall be in force.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.2.3.                                                                                                                                                                                                                                                                                      | Agreements and Covenants. Seller shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 4.2.2.4.                                                                                                                                                                                                                                                                                      | Required Consent Contracts. All consents to assign to Buyer the Required Consent Contracts, without causing any default, acceleration or termination thereunder, shall have been duly obtained and shall be in full force and effect on the Closing Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |   | 4.2.2.5.  | Governmental Authorizations. AllGovernmental Authorizations (including BIRD) necessary to consummate the transaction contemplated hereunder, including the approval of the Antitrust Authority and Investment Center, shall have been duly obtained and shall be in full force and effect on the Closing Date. In the event any of the Governmental Authorizations shall include any condition or restriction which do not currently apply that may impact or otherwise restrict the operations and business of Buyer or any of its Affiliates and/or the operation of the Business following the Closing Date, it shall be deemed for the purpose of this Section 4.2.2 that such Governmental Authorization has not been obtained. Notwithstanding the above, in the event the Antitrust Authority shall approve this Agreement excluding the assignment of the IAI Agreement then such limitation shall not effect the Closing. |
|--------|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.6.  | Legal Opinion. Buyer shall have received a legal opinion from Yigal Arnon & Co., legal counsel to Seller, in substantially the form attached hereto as Exhibit C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.7.  | Transferred Employees. At least (i) 80% of the Transferred Employees and (ii) 85% of the Key Transferred Employees, have executed employment agreements with Buyer in substantially the form attached hereto as Exhibit D and all Transferred Employees have executed release forms substantially in the form attached hereto as Exhibit E1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.8.  | Employee Funds. Seller shall have made all the required allocations to the retirement funds/managers’ insurance policies and education funds of Transferred Employees for the period ending and including the Closing Date (the “Funds”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.9.  | Closing Documents. The documents required to be delivered by Seller pursuant to Section 4.2.4 shall have been duly delivered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.10. | Approvals. All Required Consents (as set forth in Schedule 5.3)shall have been duly obtained and shall be in full force and effect on the Closing Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.11. | No Legal Proceedings. No Person shall have commenced or taken substantial steps towards any Legal Proceeding challenging or seeking the recovery of a material amount of damages in connection with the transactions contemplated by this Agreement, seeking to prohibit or limit the exercise by Buyer of any material right pertaining to its ownership of the Purchased Assets or seeking to compel Buyer to dispose of or hold separately the Business or the Purchased Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.12. | No Material Adverse Effect. There shall have been no events, changes or effects, individually or in the aggregate, constituting a Seller Material Adverse Effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.13. | Release of Liens. All Liens, including the Liens set forth on Schedule 4.2.2.13 hereto, on any of the Purchased Assets shall have been terminated effective as of the Closing Date. Termination statements or consents, as applicable, shall have been filed wherever Liens perfection statements were filed, and any security interests on file with any Governmental Entity shall have been released and evidence of the foregoing reasonably satisfactory to Buyer shall have been provided to it.                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | 4.2.2.14. | Pre-Closing Statement; Closing Statement. Seller shall have delivered to Buyer the Pre-Closing Statement as required pursuant to Section 3.2.1 hereto (including the certification in substantially the form attached hereto as Exhibit F1),acceptable to Buyer and consistent with the information and data provided to Buyer by Seller prior to the date hereof, the report by the Seller’s Auditor as required pursuant to Section 3.2.2. hereto, and in addition, Seller shall have delivered to Buyer the Closing Statement, acceptable to Buyer and consistent with the information and data provided to Buyer by Seller prior to Closing and certified by the Chief Executive Officer and Chief Financial Officer of Seller in substantially the form attached hereto as Exhibit F2.                                                                                                                                  |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | 4.2.2.15.                                                                                                                                                                                                                                                                             | Financial Statements. Seller shall have delivered to Buyer the Seller’s unaudited financial statements for the quarterly period ending June 30, 2009 and a consolidated balance sheet of Seller setting forth the assets (excluding the Excluded Assets) and liabilities (excluding the Retained Liabilities) of Seller as of the Closing Date (the “Closing Balance Sheet”).                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | 4.2.2.16.                                                                                                                                                                                                                                                                             | Fixed Charge. Seller shall have delivered to Buyer duly executed Pledge Agreement in substantially the form attached hereto as Exhibit G (the “Pledge Agreement”),placing a fixed charge in favor of Buyer for a period of eighteen (18) months following the Closing on a cash deposit of one million five hundred thousand U.S. Dollar ($1,500,000) and an irrevocable power of attorney (the “Power-of-Attorney”),authorizing Buyer to register such fixed charge with the Israeli Companies Registrar and the Registrar of Pledge (including executed registration forms). |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 4.2.3. | Deliveries and Transactions at Closing. At the Closing, the following transactions shall occur simultaneously (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): |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 4.2.4. | Deliveries and Actions by Seller. Seller shall deliver to Buyer:                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | 4.2.4.1.                                                                                                                                                                                                                                                                              | a certificate of the Chief Financial Officer confirming the adoption of a resolution of the Board of Directors of Seller, approving Seller’s execution of this Agreement and performance of all transactions contemplated hereby (including the execution of the Pledge Agreement) in the form attached hereto as Exhibit H;                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | 4.2.4.2.                                                                                                                                                                                                                                                                              | all Required Consents and consents to assign the Required Consent Contracts;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | 4.2.4.3.                                                                                                                                                                                                                                                                              | full possession, free and clear of any Liens, of all tangible Purchased Assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   | 4.2.4.4.                                                                                                                                                                                                                                                                              | all such deeds, conveyances, bills of sale, certificates of title or ownership, assignments, assurances and other instruments and documents as Buyer may reasonably request in order to effect the sale, conveyance, and transfer of the Purchased Assets, whether tangible or intangible, from Seller to Buyer, including the following documents and instruments, all duly executed by Seller:                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | an assignment deed of the Intellectual Property Rights in the form attached hereto as Exhibit I;and |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|   |   |                                                                                                                                                                                                                                                                                  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | a bill of sale and assignment and assumption in the form attached hereto as Exhibit J (the “Bill of Sale and Assignment Instrument”). |
|   |   |                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|   |   | 4.2.4.5.                                                                                                                                                                                                                                                                              | a written “bring-down” certificate, in the form attached hereto as Exhibit K,executed by the Chief Executive Officer and Chief Financial Officer of Seller;                                                                                                                                                                                                                                                                                                                                                                                                                                |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |   | 4.2.4.6.                                                        | the list of Non-Transferable Assets, if any, to be attached as Schedule 2.2;                                                                                                                                                                                                                                             |
|--------|--------|-----------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.4.7.                                                        | the Escrow Agreement, duly executed by Seller and the Escrow Agent;                                                                                                                                                                                                                                                      |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.4.8.                                                        | the Pledge Agreement, duly executed by Seller;                                                                                                                                                                                                                                                                           |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.4.9.                                                        | the Power-of-Attorney (including executed registration forms); and                                                                                                                                                                                                                                                       |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.4.10.                                                       | the Closing Statement.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   | 4.2.5. | Deliveries and Actions by Buyer. Buyer shall deliver to Seller: |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.5.1.                                                        | a certificate of the Corporate Secretary of Buyer confirming the adoption of a resolution of the Board of Directors, approving Buyer’s execution of this Agreement and performance of all transactions contemplated hereby, including the payment of the Purchase Price, in the form attached hereto as Exhibit L; |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.5.2.                                                        | the Bill of Sale and Assignment Instrument, duly executed by Buyer; and                                                                                                                                                                                                                                                  |
|   |   |                                                            |                                                                                                                                                                                                                                                                                                                     |
|   |   | 4.2.5.3.                                                        | the Escrow Agreement, duly executed by Buyer.                                                                                                                                                                                                                                                                            |

5.      Representations and Warranties of Seller

  5.1.          Organization. Qualification and Corporate Power.

|   | 5.1.1. | Seller is a company duly incorporated and validly existing under the laws of the State of Israel. Seller has the corporate power and authority to own and hold its properties and to carry on its business as now conducted, to execute, deliver and perform this Agreement and all such other agreements, undertakings and other documents and instruments delivered pursuant hereto (collectively, the “Transaction Documents”).Seller has not conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious name, assumed name, trade name or other than its own name. Seller does not own any interest in any Entity, other than the Seller Sub. Seller is not party to an existing agreement pursuant to which it is obligated to make any future investment in or capital contribution to any Entity. The Seller has not guaranteed or is not responsible or liable for any obligation of the Seller Sub. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 5.1.2. | Seller has delivered to Buyer accurate and complete copies of the Corporate Documents of Seller, including all amendments thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 5.1.3. | All of the issued and outstanding share capital of Seller Sub, on an actual basis and on an as-converted and as-exercised basis, taking into consideration any and all convertible or exchangeable securities and other interests in Seller Sub, is owned beneficially and of record by Seller. Except as set forth on Schedule 5.1.3,there are no outstanding or authorized subscriptions, options, warrants, calls, rights, commitments, convertible securities, or any other agreements of any character directly or indirectly obligating Seller Sub to issue any additional shares or any securities convertible into, or exchangeable for, or evidencing the right to subscribe for, any shares.                                                                                                                                                                                                                                                               |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.2.          Authority: No Violation; Due Execution; Etc.

|   | 5.2.1. | Assuming the receipt of all the required Consents at the Closing, the execution and delivery by Seller of the Transaction Documents and the performance by Seller of its obligations hereunder, including the sale and transfer of all Purchased Assets, will have been duly authorized by all requisite corporate action and will not violate or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default, or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit (any such event, a “Seller’s Conflict”)under (i) any Legal Requirement, (ii) any order of any court or other Governmental Entity by which Seller or any of its properties or assets is or are bound, (iii) the Corporate Documents of Seller, or (iv) any provision of any indenture, mortgage, lease, Contract or other agreement or instrument, permit, concession, franchise or license to which Seller is a party and which constitute part of the Purchased Assets or by which any of its properties or assets (which are part of the Purchased Assets) is or are bound, or result in the creation or imposition of any Lien upon any Purchased Assets (tangible or intangible) of Seller. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

  5.3.          Consents.

  5.4.          Financial Statements; No Undisclosed Liabilities.

|   | 5.4.1. | Seller has previously delivered to Buyer, true and completed copies of the following financial statements (collectively, the “FinancialStatements”):accurate and complete copies of Seller’s audited consolidated balance sheets as of December 31, 2006, December 31, 2007 and December 31, 2008 and the related audited consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the notes thereto, together with the report thereon of Seller Auditors and unaudited consolidated balance sheet as of March 31, 2009 and the related unaudited consolidated statements of operations. On or prior to the Closing, the Seller shall deliver to Buyer unaudited consolidated balance sheet as of June 30, 2009, the Pre-Closing Statement reviewed by the Seller’s Auditors and the related unaudited consolidated statements of operations (the “Second Quarter Financials”)and the Closing Balance Sheet, reviewed by the Seller’s Auditor. Until fiscal year 2008, Seller’s financial statements were prepared in conformity with Israeli GAAP and commencing with fiscal year 2008, Seller’s financial statements have been prepared in conformity with IFRS. The Financial Statements (including the notes thereto) have been (and, in the case of the Second Quarter Financials and Closing Balance Sheet, will be) prepared according to Israeli GAAP or IFRS (as applicable) applied on a consistent basis throughout the periods covered, present fairly the financial condition of the Seller as of such dates and the results of operations of the Seller for such periods, are correct and complete in accordance with Israeli GAAP or IFRS (as applicable), and are consistent with the books and records of Seller and Seller’s Sub (which books and records are correct and complete). Each delivered balance sheet fully sets forth all assets and liabilities existing as of its date which, under Israeli GAAP or IFRS (as applicable), should be set forth therein, and each delivered statement of earnings sets forth the items of income and expense which should appear therein under Israeli GAAP or IFRS (as applicable). The trade accounts and other receivables of Seller which are classified as current assets on the balance sheets of the Financial Statements, Second Quarter Financials and Closing Balance Sheet are (or will be, as applicable) bona fide receivables, were acquired in the ordinary course of business, are stated in accordance with Israeli GAAP or IFRS (as applicable) and, subject to the reserve for doubtful accounts, need not be written-off as uncollectible. The inventories of Seller reflected on the balance sheets of the Financial Statements, Second Quarter Financials and Closing Balance Sheet have been (or will be, as applicable) valued in accordance with Israeli GAAP or IFRS (as applicable), and the value of obsolete materials and materials of below standard quality has been (or will be, as applicable) written down or reserved against in accordance with Israeli GAAP or IFRS (as applicable). There have been no write-ups of inventories or other assets since January 1, 2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.4.2. | The Pre-Closing Statement and the Closing Statement to be delivered by Seller at Closing will be prepared according to IFRS applied on a consistent basis, present the correct and complete data required pursuant to Schedule 3.2.1 with respect to the Projects as of the Closing Date, and shall be consistent with the books and records of Seller and Seller’s Sub (which books and records are correct and complete).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.4.3. | Seller is in compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the date hereof. Seller has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Seller and designed such disclosure controls and procedures to ensure that material information relating to Seller, including its consolidated subsidiaries, is made known to the certifying officers by others within those entities and has established and maintained adequate internal control over financial reporting (as defined under Exchange Act Rules 13a-15(f) and 15d-15(f)) of Seller designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements of Seller. Seller’s certifying officers have evaluated the effectiveness of Seller’s disclosure controls and procedures and in internal control over financial reporting as of the end of the period covered by its most recently filed annual report under the Exchange Act (the date of such evaluation, the “Evaluation Date”).Seller presented in its most recently filed annual report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures and internal control over financial reporting based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in Seller’s internal control over financial reporting or, to the best of Seller’s knowledge, in other factors that could significantly affect Seller’s internal controls. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.4.4. | Except as set forth in Schedule 5.4.4 hereto or in the Financial Statements, Seller does not have any liabilities or other obligations of any nature, whether or not accrued, contingent or otherwise, that would be required by IFRS to be recorded on a balance sheet of Seller on the date of this Agreement or disclosed in the related notes thereto or that are otherwise deemed “off-balance sheet arrangements.” Except as set forth in Schedule 5.4.4,since December 31, 2008 (the “Balance Sheet Date”),there have been no events or changes with respect to Seller that, individually or in the aggregate, have had or reasonably would be expected to have a Seller Material Adverse Effect. Without limiting the generality of the foregoing, since the Balance Sheet Date, Seller has conducted its business only in, and has not engaged in any transaction other than according to, the ordinary and usual course of business consistent with past practices. At the Closing, Seller shall furnish an updated Schedule 5.4.4,to show any liabilities or other obligations that would be required by IFRS to be recorded on a balance sheet of Seller on the Closing Date and not otherwise reflected in the Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.5.          No Changes.

  5.6.          Tax.

|   | 5.6.1. | Each of Seller and Seller Sub (each Seller and Seller Sub hereinafter referred to as the “Taxpayer”) has filed, or been included in, all Tax Returns required to be filed through the date hereof and will timely file any such Tax Returns required to be filed on or prior to the Closing Date, in each case, subject to any applicable extensions. All such Tax Returns are correct, complete and accurate in all material respects.                                                                                                                                                                                                                                                                                                                               |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.6.2. | There is no income of the Taxpayer that will be required under applicable Tax laws to be reported by Buyer for a Tax period beginning after the Closing Date which taxable income was realized (and reflects economic income) arising prior to the Closing Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.6.3. | There are no liens for Taxes on the Purchased Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.6.4. | There is no audit or other matter in controversy with respect to the Taxpayer and there is no Tax deficiency or claim assessed that relates to the Taxpayer. No claim has ever been made by a Governmental Entity in a jurisdiction where the Taxpayer does not file Tax Returns that such Taxpayer is or may be subject to taxation by that jurisdiction. Seller is not a party to any pending examination, audit, action, administrative or judicial proceeding, proposed adjustment or assessed deficiency related to Tax and no examination, audit, action, administrative or judicial proceeding, proposed adjustment has been threatened by any Governmental Entity. There are no matters relating to Tax under discussion between any Governmental Entity and the Company. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.6.5.  | Taxpayer has withheld from its employees, suppliers and any other applicable payees (and timely paid to the appropriate Governmental Entity) proper and accurate amounts for all periods through the date hereof in compliance with all Tax withholding provisions of applicable laws (including income, social security, national health insurance and employment tax withholding for all types of compensation).                                                                                                                           |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.6.  | Taxpayer is not a party to or subject to or bound by any contract or agreement with any other person relating to Taxes. Taxpayer does not have any liability for the Taxes of any person (other than Seller) as a transferee or successor, or by contract, or otherwise.                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.7.  | Taxpayer is not currently the beneficiary of any extension of time within which to file any Tax Return, and the Taxpayer has not waived any statute of limitation with respect to any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency.                                                                                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.8.  | No state of facts exists or has existed that would constitute grounds for the assessment against Buyer, whether by reason of transferee liability or otherwise, of any liability for any Tax of the Taxpayer as a result of the transactions contemplated by this Agreement.                                                                                                                                                                                                                                                                 |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.9.  | Schedule 5.6.9 contains a list of all jurisdictions (whether foreign or domestic) to which any Tax is payable by the Taxpayer in relation to the Business.                                                                                                                                                                                                                                                                                                                                                                                   |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.10. | Seller has provided to Buyer all documentation relating to, and is in full compliance with all terms and conditions of, any Tax exemption, Tax holiday or other Tax reduction agreement, approval or order of a Governmental Authority. The consummation of the transactions contemplated by this Agreement will not have any adverse effect on the continued validity and effectiveness of any such Tax exemption, Tax holiday or other Tax reduction agreement or order (subject to any required approval contemplated by this Agreement). |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.6.11. | The Company is not subject to any restrictions or limitations pursuant to Part E2 of the Israeli Tax Ordinance.                                                                                                                                                                                                                                                                                                                                                                                                                              |

  5.7.          Grants, Incentives and Subsidies.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.8.          Restrictions on Business Activities.

  5.9.          Title to Properties; Condition of Properties; Absence of Liens.

|   | 5.9.1. | The Seller has good, marketable and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of the Purchased Assets, real, personal and mixed, used or held for use in the Business, free and clear of any Liens, except as reflected in Schedule 5.9.1.All current leases relating to any leased Purchased Assets are in full force and effect, are valid and effective in accordance with their respective terms, and to there is not, under any of such leases, any existing default or event of default (or event which with notice or lapse of time, or both, would constitute a default).                                                                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.9.2. | The Purchased Assets, collectively comprise all of the material assets, rights and services used by the Seller for the operation of the Business as currently conducted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.9.3. | Except as set forth in Schedule 5.9.3,allInventory used in the conduct of the Business reflected on the Financial Statements or acquired since the date thereof was acquired and has been maintained in the ordinary course of business; is of good and merchantable quality; consists substantially of a quality, quantity and condition useable, leasable or saleable in the ordinary course of business and none of which is slow-moving, obsolete, damaged, or defective. Schedule 5.9.3 hereto sets forth allowances by the Seller for a reserve for excess and obsolete Inventory. The quantity of the Inventory on the date hereof is, and on the Closing Date will be, consistent with the levels maintained by Seller in the ordinary course of business consistent with past practices. |

  5.10.        Intellectual Property.

|   | 5.10.1. | Schedule 5.10.1 lists all Seller Intellectual Property Rights of the type described in clauses (i), (ii), (iii) and (iv) of Section 2.1.9 in which Seller now has any interest, specifying whether such Seller Intellectual Property Rights are owned, controlled, used or held (under license or otherwise) by Seller and indicating, where applicable, the jurisdictions in which each such Seller Intellectual Property Right has been issued or registered or in which an application for such issuance and registration has been filed, including the respective registration or application numbers and the names of all registered owners. All Seller Intellectual Property Rights shown as registered in Schedule 5.10.1 have been properly registered, all pending registrations and applications have been properly made and filed and all annuity, maintenance, renewal and other fees relating to registrations or applications are current. All such registrations, filings and issuances are in full force and effect, all fees and other charges with respect thereto are current, and there are no fees or charges due or that would become due or payable with respect thereto within the thirty (30) days following the Closing Date. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.10.2.  | The Seller owns, or is licensed or otherwise possesses rights to, all Seller Intellectual Property Rights. The Seller Intellectual Property Rights comprise all the intellectual property rights and assets that are required in the ordinary operation of the Business as it is currently conducted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.3.  | Except as set forth in Schedule 5.10.3,the Seller is the sole and exclusive owner, with all right, title and interest in and to the Seller Intellectual Property Rights, free and clear of any Liens.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.4.  | To the best Seller’s knowledge, none of the products of the Business described in Schedule 5.10.4(a) infringe any copyright, patent, trademark, service mark, trade secret or other intellectual property right of any third party. Except as set forth in Schedule 5.10.4(b),no claims with respect to the Seller Intellectual Property Rights have been asserted or are, to the Seller’s knowledge, threatened by any person, nor to the Seller’s knowledge are there any valid grounds for any claims (i) to the effect that the manufacture, sale, or use of any product incorporating any of the Seller Intellectual Property Rights infringes or may infringe on any copyright, patent, trade mark, service mark, trade secret or other proprietary right or (ii) challenging the ownership by the Seller, validity or effectiveness, of any of the Seller Intellectual Property Rights. |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.5.  | All registered and/or issued patents, if any, which are part of the Seller Intellectual Property Rights are valid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.6.  | No Seller Intellectual Property Right is subject to any outstanding decree, order or judgment, restricting in any manner the use, licensing or transfer thereof by Seller.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.7.  | Each current and former employee, consultant or contractor of the Seller who invented, participated in the invention or reduction to practice of, or was granted access to, any of the Seller Intellectual Property Rights, has executed a proprietary information and confidentiality agreement substantially in the form attached hereto as Schedule 5.10.7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.8.  | Except asset forth in Schedule 5.10.8,all Seller Intellectual Property Rights (other than such rights licensed from third parties) have been either created by employees of Seller on a work-for-hire basis or by consultants or contractors who have created the same themselves and have assigned all rights they may have had therein to Seller.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.9.  | Except as set forth in Schedule 5.10.9,to the Seller’s knowledge, there has not been any unauthorized use, infringement or misappropriation of any of Seller Intellectual Property Rights by any third party, including any employee or independent contractor or former employee or former independent contractor of Seller.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.10. | All technical information, not generally known to the public, which is proprietary to the Business has been kept confidential by Seller, with the exception of technical information that has been disclosed in the ordinary course of business under non-disclosure or similar agreements and information that has been submitted in the course of filing patent applications.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 5.10.11. | Except as set forth in Schedule 5.10.11,Seller has not granted, and there are not outstanding, any options, licenses or agreements of any kind relating to any Seller Intellectual Property Rights, nor the Seller is a party to or, to its knowledge, bound by, any option, license or agreement of any kind with respect to any of the Seller Intellectual Property Rights. Except as set forth in Schedule 5.10.11,the Seller is not obligated to pay any royalties or other payments to third parties with respect to the marketing, sale, distribution, manufacture, license or use of any Seller Intellectual Property Rights.                                                                                                                                                                                                                                                                             |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.10.12. | Except as set forth in Schedule 5.10.12,Seller has not requested from, made any application to, nor received any benefits from, the OCS or BIRD for receipt of research and development funding in accordance with the Law for the Encouragement of Industrial Research and Development, 1984.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.10.13. | To the Company’s knowledge, the Seller Intellectual Property Rights do not include any open source, shareware, freeware code or other freely available software that is subject to restrictions on use. Schedule 5.10.13 lists all software or other material that Seller used or distributed as “open source software” or under a similar licensing or distribution model (including but not limited to any license which complies with the Open Source Initiative Corporation’s (OSI) open source definition or which is, or is equivalent to, a license approved by OSI) that to the Seller’s knowledge the Seller uses or licenses, and identifies that which is incorporated into, combined with, or distributed in conjunction with a key function of the Seller’s Products or services (“Incorporated Open Source Software”),copies of which have been provided to Buyer. Seller’s distribution of each component of Incorporated Open Source Software that when distributed must be passed along with the freedom to further copy and change it, substantially complies with all provisions of the applicable license agreement, and to Seller’s knowledge such distribution does not give rise under such license agreement to any rights in any third parties under any Seller Intellectual Property Rights or obligations for Seller with respect to any Seller Intellectual Property Rights, including any obligation to disclose or distribute any such intellectual property in source code form, to license any such intellectual property for the purpose of making derivative works, or to distribute any such intellectual property without charge. |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.10.14. | Except as set forth in Schedule 5.10.14,the Seller has not disclosed or provided access (or is required to do so), including by way of escrow, to any source code of, or any material proprietary information or algorithm contained in or relating to, any software source code, of any Seller Intellectual Property Rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 5.10.15. | Seller is not, nor as a result of the execution or delivery of this Agreement, or performance of its obligations hereunder, will Seller be, in violation of any license, sublicense, agreement or instrument relating to the Seller Intellectual Property Rights, nor will execution or delivery of this Agreement, or performance of Seller’s obligations hereunder, cause the diminution, termination or forfeiture of the Seller Intellectual Property Rights or any rights therein or thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

  5.11.        Agreements.

|   | 5.11.1. | The Contracts identified in Schedule 2.1.5 collectively constitute all of the Contracts necessary to enable Seller to conduct the Business in the manner in which the Business is currently being conducted. Seller has delivered to Buyer true, complete and correct copies of each of the Contracts.                                                                                                                                              |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 5.11.2. | Seller has not breached, violated or defaulted under, or received notice that it has breached, violated or defaulted under, any of the material terms or conditions of any Contracts.                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 5.11.3. | Within the past 24 months, Seller has not received any material written customer complaints concerning their services that have not been resolved. Each Contract was negotiated at arm’s length and is not with any Affiliate of the Seller. To Seller’s knowledge, none of the parties to any Contract intends to terminate or alter the provisions thereof by reason of the transactions contemplated by this Agreement or otherwise. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.11.4. | Each Contract is in full force and effect and, except as otherwise disclosed in Schedule 5.11.4,is not subject to any material default thereunder by any party obligated to the Seller pursuant thereto. Upon consummation of the transaction contemplated hereunder, subject to obtaining the consent of the counterparty thereto, if required as set forth in Schedule 5.3,all Contracts shall continue in full force and effect to the same extent without penalty or other adverse consequence to Buyer or the Business. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.11.5. | No Person is renegotiating, or has a right pursuant to the terms of any Contract to renegotiate, any amount paid or payable to the Seller under any Contract or any other material term or provision of any Contract.                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.11.6. | Schedule 5.11.6 lists the following Contracts, in each case detailing the party, date and title of the agreement: (1) any Contract involving more than $50,000 over the life of the contract which is not terminable by Seller without cause upon 30 days (or less) notice; and (2) any oral contract (in which case, a summary shall be provided).                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 5.11.7. | To Seller’s best knowledge, Seller has never been suspended or debarred from bidding on contracts or subcontracts to provide services to any Governmental Entity, or has any suspension or debarment action been contemplated, threatened or commenced.                                                                                                                                                                                                                                                                |

  5.12.        Compliance with Laws; Governmental Authorizations.

|   | 5.12.1. | In respect of all Purchased Assets and Assumed Liabilities, Seller has complied in all material respects with, is not in material violation of, and has not received any notices of violation with respect to, any foreign, national or local statute, law or regulation, including export control laws. Seller has carried on the Business and affairs in accordance with its Corporate Documents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 5.12.2. | Schedule 5.12.2 identifies each material Governmental Authorization held by Seller in connection with the Business, and Seller has delivered to Buyer accurate and complete copies of all Governmental Authorizations identified in Schedule 5.12.2,all of which are valid and in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable Seller to conduct the Business in the manner in which it is currently being conducted. Seller is, and at all times has been, in compliance in all material respects with the terms and requirements of the Governmental Authorizations identified in Schedule 5.12.2.Seller has not received any notice or other communication from any Governmental Entity regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization. |

  5.13.        Litigation.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.14.        Insurance.

  5.15         Environmental Matters.

  5.16.        Employee Matters.

|   | 5.16.1. | Schedule 5.16.1 contains a list of the names and positions of all employees of Seller (each, an “Employee”),along with their position, date of hire, annual rate of compensation (or with respect to employees compensated on an hourly or per diem basis, the hourly or per diem rate of compensation), estimated or target annual incentive compensation of each such person, annual vacation, whether each such person is subject to Section 14 of the Severance Pay Law of 1963 (and with respect to which part of his or her employment term), the sick and other paid time-off allowance, and other basic terms of employment, including contributions to funds, “13th salary,” car allowance, telephone allowance, share-based compensation and employment status of each such person (“Benefits”),payable or which Seller is bound to provide (whether now or in the future) to each Employee. Schedule 5.16.1 also identifies (i) each Employee who is not fully available to perform work because of disability or other leave and sets forth the basis of such leave and the anticipated date of return to full service and (ii) each Employee who is entitled to a termination notice of more than a thirty (30) days. Each current and former Employee has entered into Seller’s standard form of confidentiality, non-competition and assignment of inventions agreement, the form of which has previously been delivered to Buyer. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 5.16.2. | Schedule 5.16.2 contains a list of all independent contractors currently engaged by Seller, along with the position, date of retention and rate of remuneration and any other forms of compensation payable to each such person or entity. Each such independent contractor has entered into Seller’s standard form of confidentiality, non-competition and assignment of inventions agreement with the Seller or the applicable subsidiary, the form of which has previously been delivered to Buyer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 5.16.3. | Seller is in compliance in all material respects with all applicable laws, policies, procedures, customs and agreements relating to employment or the engagement of independent contractors, terms and conditions of employment or the engagement of independent contractors and to the proper withholding and remission to the proper tax authorities of all sums required to be withheld from Employees or other persons engaged thereby, and Seller has paid in full to the Employees (or has fully contributed to funds managed on their behalf) and independent contractors all remuneration, salaries, commissions, bonuses, benefits and other compensation due and payable to such employees and/or independent contractors as of the Closing Date. Any and all the benefits to which any employee or former employee or independent contractor or former independent contractor is or may be entitled including, inter alia,severance pay, accrued and unpaid vacation days, convalescence pay, leave and health, have been paid or fully funded, as aforesaid, or duly reserved for in Seller’s financial statements. Without derogating from the aforesaid, all contributions to benefit plans (including employer contributions and employee salary reduction contributions), including insurance and education funds, that are due as of the Closing Date have been fully contributed to each employee’s benefit plan.                                             |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 5.16.4. | Except as set forth in Schedule 5.16.4, the Seller has not been in the past, a party to, or bound by, any collective bargaining agreement or arrangement or union contract or extension order (excluding such extension orders that apply to all employers in Israel and extension orders applying to all employees in the field of business of the Seller) and no such collective bargaining agreement is being negotiated by Seller. No labor union or other representative organization has to the knowledge of the Seller otherwise been certified or recognized as the collective bargaining representative of any employees of Seller or has applied to represent such employees or, to Seller’s knowledge, is attempting to represent such employees. There are no existing or, to the knowledge of Seller, threatened labor strikes, work stoppages, organized slowdowns, unfair labor practice charges or complaints or labor arbitration proceedings to which any employee or consultant of Seller or any subsidiary is a party. The Seller has not experienced any such labor controversy. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 5.16.5. | Other than as set forth in Schedule 5.16.5, neither the Seller nor to the Seller’s knowledge, any officer, director, employee, consultant or independent contractor of the Seller, is in violation of any term of any material, employment, consulting, independent contractor, non-disclosure, non-competition, inventions assignment or any other contract relating to the relationship of such officer, director, employee, consultant or independent contractor with Seller.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 5.16.6. | There is no unfair labor practice complaints or other legal proceedings pending or, to the knowledge of Seller, threatened against Seller before any labor tribunal. There are no complaints or other legal proceedings pending or, to the knowledge of Seller, threatened by or on behalf of any present or former employee, contractor, consultant or service provider of Seller alleging breach of any express or implied contract.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | 5.16.7. | Except as contemplated hereby, neither the execution, delivery or performance of this Agreement, nor the consummation of any of the other transactions contemplated by this Agreement, will result in any payment (including any bonus, golden parachute or severance payment) to any current or former Employee, independent contractor or director of Seller (whether or not under any benefit plan), or increase the benefits payable under any benefit plan, or result in any acceleration of the time of payment or vesting of any such benefits (including any share-based benefits such as options, restricted shares or restricted share units), except as provided therein.                                                                                                                                                                                                                                                                                                                                                                                                                        |

  5.17.        Brokers and Finders.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.18.        Related Party Transactions.

  5.19.        Foreign Corrupt Practices Act.

  5.20.        Customers, Suppliers and Competitors.

  5.21.        Accounts Receivable; Work-in-Process.

  5.22.        Product Defects; Product Warranties.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  5.23.        Solvency.

  5.24.        Disclosure.

  5.25.        Tax Matters.

  5.26.        Seller SEC Documents.

        6.      Representations and Warranties of Buyer

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  6.1.          Organization, Qualification and Corporate Power.

  6.2.          Authority; No Violation; Due Execution; Etc.

  6.3.          Consents.

  6.4.          Brokers and Finders.

  6.5.          Disclosure.

  6.6.          Due Diligence.

        7.      Conduct Prior to Closing

  7.1.          Ordinary Course of Seller.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 7.1.1.  | Seller shall conduct the Business in the usual, regular and ordinary course and in substantially the same manner as the Business and operations thereunder have been conducted prior to the date of this Agreement;                                                                                                                                                                                                                                                                                                                 |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.2.  | Seller shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current employees and consultants, and maintain its relations and good will with all suppliers, customers, landlords, creditors, employees, consultants and other Persons having business relationships with Seller;                                                                                                                                                                      |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.3.  | Seller shall keep in full force all insurance policies referred to in Schedule 5.13(a);                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.4.  | Seller shall continue to maintain, in all material respects, the Purchased Assets in accordance with present practice in a condition suitable for its current use;                                                                                                                                                                                                                                                                                                                                                                  |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.5.  | Seller shall file, when due or required, national, state, foreign and other Tax Returns and other reports required to be filed and pay when due all Taxes, assessments, fees and other charges lawfully levied or assessed against them, unless the validity thereof is contested in good faith and by appropriate proceedings diligently conducted;                                                                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.6.  | Seller shall keep its books of account, files and records in the ordinary course and in accordance with existing practice;                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.7.  | Seller shall report regularly (but in no event less frequently than weekly) to Buyer concerning the status of the Business;                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.8.  | Seller shall not amend its Corporate Documents, or effect or permit any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;                                                                                                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.9.  | Seller shall not form any subsidiary or acquire any equity interest or other interest in any other Entity;                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.10. | Seller shall not change any of its methods of accounting or accounting practices in any respect, or alter its practices with respect to the collection of receivables or payment of payables;                                                                                                                                                                                                                                                                                                                                       |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.11. | Seller shall not make any Tax election;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.12. | Seller shall not enter into any transaction or relationship with any of its Affiliates;                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.13. | Seller shall not make any sale, assignment, transfer, abandonment or other conveyance of the Purchased Assets or any part thereof, except transactions pursuant to the existing Contracts and dispositions of Inventory or of worn-out or obsolete equipment for fair and reasonable value in the ordinary course of business consistent with past practice;                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.14. | Seller shall not subject any of the Purchased Assets, or any part thereof, to any Lien or suffer such to exist other than such non-material Liens as may arise in the ordinary course of business consistent with past practice by operation of law;                                                                                                                                                                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 7.1.15. | Seller shall not enter into any new (or amend any existing) employee benefit plan, program or arrangement or any new (or amend any existing) employment, severance or consulting agreement, grant any general increase in the compensation of officers or employees (including any such increase pursuant to any bonus, pension, profit-sharing or other plan or commitment) or grant any increase in the compensation payable or to become payable to any employee, except in accordance with pre-existing contractual provisions; |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 7.1.16. | Seller shall not take any other action that would cause any of the representations and warranties made by the Seller in this Agreement not to remain true and correct;                                                                                                                      |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                        |
|   | 7.1.17. | Seller shall not settle, release or forgive any claim or litigation or waive any right thereto which are connected to the Purchased Assets or Assumed Liabilities and shall not commence any claim or litigation; and                                                                       |
|   |    |                                                                                                                                                                                                                                                                                        |
|   | 7.1.18. | Seller shall not make, enter into, modify, amend in any material respect or terminate any Contract, bid or expenditure, where such Contract, bid or expenditure is for (A) a Contract entailing payments in excess of $100,000 or (B) a Contract having a term in excess of six (6) months. |
|   |    |                                                                                                                                                                                                                                                                                        |
|   | 7.1.19. | Seller shall not issue, grant or authorize the issuance of, or undertake to grant, issue or authorize, Ordinary Shares or any other securities exercisable, convertible or exchangeable into Ordinary Shares.                                                                               |
|   |    |                                                                                                                                                                                                                                                                                        |
|   | 7.1.20. | Seller shall not agree or commit to take any of the actions described in subsections 7.1.1 through 7.1.20 above.                                                                                                                                                                            |

  7.2.          Notification of Certain Matters.

|   | 7.2.1. | any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes an inaccuracy in or breach of any representation or warranty made by the relevant party in this Agreement;                                                                                                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                   |
|   | 7.2.2. | any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that causes or constitutes, or could reasonably be seen as likely to cause or constitute, an inaccuracy in or breach of any representation or warranty made (or to be made on the Closing Date) by the relevant party in this Agreement; |
|   |   |                                                                                                                                                                                                                                                                                                                                                   |
|   | 7.2.3. | any breach of any material covenant or obligation of the Seller; and                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                   |
|   | 7.2.4. | any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 4.2.2 impossible or unlikely;                                                                                                                                                                                         |

  7.3.          No Negotiation.

|   | 7.3.1. | solicit or encourage the initiation of any inquiry, proposal or offer from any Person (other than Buyer) relating to a possible Acquisition Transaction;                                                               |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                   |
|   | 7.3.2. | participate in any discussions or negotiations or enter into any agreement with, or provide any information to, any Person (other than Buyer) relating to or in connection with a possible Acquisition Transaction; or |
|   |   |                                                                                                                                                                                                                   |
|   | 7.3.3. | consider, entertain or accept any proposal or offer from any Person (other than Buyer) relating to a possible Acquisition Transaction.                                                                                 |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  7.4.          Access and Investigation.

|   | 7.4.1. | upon reasonable advance notice, provide Buyer and its Representatives, during normal business hours, with reasonable access to Seller’s Representatives and to its personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Business and the Purchased Assets; and                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 7.4.2. | provide Buyer or its Representatives with copies of such existing books, records, Tax Returns, work papers and other documents and information relating to the Business and the Purchased Assets, and with such additional financial, operating and other data and information regarding the Business and the Purchased Assets, as Buyer may reasonably request, and Seller shall cooperate with Buyer with regard to arranging meetings with key customers, if any, and other third parties, as Buyer may reasonably request. |

  7.5.          Public Announcements.

  7.6.          Commercially Reasonable Efforts.

        8.      Additional Agreements

  8.1.          Access to Information.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  8.2.          Expenses.

  8.3.          Filings and Consents.

|   | 8.3.1. | As promptly as practicable after the execution of this Agreement, each party to this Agreement (a) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the transactions contemplated by this Agreement, and (b) shall use all commercially reasonable efforts to obtain all consents (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with or to give full effect to transactions contemplated by this Agreement; provided, however, that (i) Seller shall be responsible for making all filings with and obtaining all such consents from Governmental Entities pursuant to Legal Requirements applicable to Seller or its businesses or properties, and for obtaining all such consents (if any) required to be obtained from parties to Contracts by which Seller or its respective properties are bound, (ii) Buyer shall be responsible for making all filings with and obtaining all such consents from Governmental Entities pursuant to Legal Requirements applicable to Buyer or its business or properties; and (iii) Buyer shall be obligated only to provide Seller with such assistance and information as is reasonably required from Buyer to make such filings or to obtain such consents; provided further,that Buyer shall not be obligated to consent to any divestitures or operational limitations or activities in connection therewith. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 8.3.2. | Each party to this Agreement shall promptly deliver to the other party a copy of each such filing made, each such notice given and each such Consent obtained by such party during the Pre-Closing Period. Each party shall promptly provide the other party with copies of all filings made by the other party with any state, federal or foreign Governmental Entity in connection with this Agreement and the transactions contemplated hereby.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

  8.4.          Non-Competition and Non-Solicitation.

|   | 8.4.1. | For a period commencing as of the Closing Date until the third (3rd) anniversary of the Closing Date, neither the Seller nor Mr. Aviv Tzidon (each referred to as the “Undertaking Party”)shall, without the prior written consent of Buyer, in any area of the world: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                               |
|   |   | 8.4.1.1.                                                                                                                                                                                                                                                                           | enter into, participate or engage, directly or indirectly, in the design, development, manufacture, production, marketing, sale or servicing of any product, or the provision of any service, that directly relates to the Business or render any services to any business engaged in the design, manufacture or sale of any product that directly relates to the Business or that otherwise competes with the Business (the “Specified Technology”); |
|   |   |                                                                                                                                                                                                                                                                               |   |
|   |   | 8.4.1.2.                                                                                                                                                                                                                                                                           | promote or assist, financially or otherwise, any person, firm, association, corporation, or other entity engaged in the Specified Technology; or |
|   |   |                                                                                                                                                                                                                                                                               |   |
|   |   | 8.4.1.3.                                                                                                                                                                                                                                                                           | encourage or solicit any officer or employee of Buyer or any of its subsidiaries to leave the employment of Buyer or any of its subsidiaries for any reason. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 8.4.2. | Each Undertaking Party will hold, and the Seller will use its commercially reasonable efforts to cause each of its Affiliates and its and its Affiliates’ Representative to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other Legal Requirements, all proprietary, non­public and other confidential documents and information concerning the Business.                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 8.4.3. | Without limitation, the parties agree and intend that the covenants contained in this Section 8.4 shall be deemed to be a series of separate covenants and agreements, one for each and every political subdivision of each jurisdiction. If, in any judicial proceeding, a court shall refuse to enforce in such action any of the separate covenants deemed included herein, then at the option of Buyer, wholly-unenforceable covenants or components thereof shall be deemed eliminated from the provisions hereof for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such a proceeding. The parties intend to have covenants enforceable to the fullest extent permitted by applicable law as to scope, time and geography. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 8.4.4. | The parties agree that there can be no adequate remedy at law for any breach of the obligations of the Undertaking Party hereunder, that any such breach may allow the Undertaking Party and/or third parties to unfairly compete with Buyer and its subsidiaries resulting in irreparable harm to Buyer and therefore, that upon any such breach by an Undertaking Party or any threat thereof. Buyer and its subsidiaries shall be entitled to appropriate equitable relief in addition to whatever remedies it might have at law.                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 8.4.5. | Each Undertaking Party acknowledges, represents and warrants to Buyer that the covenants of such Undertaking Party in this Section 8.4 are reasonably necessary for the protection of Buyer’s interests under this Agreement and are not unduly restrictive upon such Undertaking Party or any of its respective affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 8.4.6. | Each Undertaking Party shall notify Buyer of any breach or alleged breach by an Undertaking Party of any provision of this Section 8.4 and, within ten (10) days after becoming aware of such breach or alleged breach, the breaching Undertaking Party shall cure such breach or alleged breach. Failure to cure such breach or alleged breach to Buyer’s reasonable satisfaction within such time period shall constitute a default under this Agreement and Buyer shall be entitled to exercise any of its available rights and remedies (including pursuant to subsection 8.4.4 above).                                                                                                                                                                                                     |

  8.5.          Excess Payments.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  8.6.          Initial Review Period.

  8.7.          Change of Corporate Name of Seller.

  8.8.          Books and Records.

8.9.          No Liquidation.

        9.      Employees

  9.1.          Employee Resignation from Seller.

|   | 9.1.1. | The employment of the employees of Seller listed on Schedule 9.1 hereto, to be attached by Buyer by August 10, 2009, (the “Transferred Employees”)willbe terminated concurrently with the Closing. Such Schedule 9.1 shall also identify the key Transferred Employees (the “Key Transferred Employees”).                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 9.1.2. | Seller shall comply with all applicable laws, including statutory and/or common law, in connection with the resignation of such Transferred Employees and shall pay to such employees all amounts that may become payable to or in respect of or receivable by such employees at the time of their resignation from employment, including accrued wages, notice, severance, social benefits, bonuses, commissions, vacation pay, personal and sick time, or any amounts owing under statute, policies, customs and/or common law in respect of any such resignation. No option to Seller’s Ordinary Shares owned by any Transferred Employee shall be assumed by Seller. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 9.1.3. | Seller undertakes that effective as of the Closing Date the exercise period of each vested option to Seller’s Ordinary Shares owned by any Transferred Employee shall be extended until the respective expiration date of such option. Seller further undertakes that it shall not take any step following the Closing Date to amend, modify or change the terms of such options.                                                                                                                                                                                                                                                                                        |

  9.2.          Employment by Buyer.

|   | 9.2.1. | Buyer (or any of its Affiliates as designated by Buyer) shall extend offers of employment with terms not derogating from those existed with respect to each Transferred Employee as of the date of the letter of intent executed by the parties on May 5, 2009, effective as of the Closing Date to the Transferred Employees. The main employment terms of such offer are listed on Schedule 9.1.                                                                                                                              |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | 9.2.2. | Buyer shall hire all Transferred Employees who accept Buyer’s offer of employment (it being understood that the acceptance of certain Transferred Employees of Buyer’s employment offer is a condition precedent to the consummation of the transactions contemplated by this Agreement as provided in Section 4.2.2.7); provided that nothing in this Agreement shall be construed as granting any of the employees any rights under this Agreement, including the right to employment by Buyer or its Affiliates. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | 9.2.3. | Seller will not take any action that would impede, hinder, interfere or otherwise compete with Buyer’s effort to hire any such employees. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

  9.3.          Duties Towards Employees.

|   | 9.3.1. | Nothing in this Agreement shall limit Buyer’s ability to modify the salary or wage level or terminate the employment of any Transferred Employee at any time following the Closing Date and for any reason, including without cause in accordance with applicable law. The employees of Seller who are not offered employment with Buyer shall be referred to herein as “Non-Transferred Employees.” |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 9.3.2. | Buyer shall not have any liability with respect to any Non-Transferred Employee or former employee or retiree of Seller.                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 9.3.3. | Seller shall be responsible for the payment of any severance pay, notice pay, social benefits, insurance and supplemental pension to any of Seller’s employees, former employees or retirees based on or arising under employment with Seller.                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | 9.3.4. | On or prior to the Closing Date, each of Transferred Employees shall execute a release form substantially in the form attached hereto as Exhibit E1 and Seller shall use its commercially reasonable efforts to cause each of the Non Transferred Employees to execute a release form substantially in the form attached hereto as Exhibit E2.                                                                         |

  9.4.          Waiver of Non-Compete, Non Disclosure.

|   | 9.4.1. | Seller hereby waives any claims against the Transferred Employees for disclosures to the Buyer after the Closing Date of proprietary or confidential information related to the Business.                                  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                       |
|   | 9.4.2. | Seller hereby agrees that the conduct of the Business following the Closing will not be considered a breach of any nondisclosure or noncompetition agreements by and between Seller and each of the Transferred Employees. |

        10.   Survival of Representations and Warranties; Indemnification

  10.1.        Survival of Representations, Etc.

|   | 10.1.1. | The representations and warranties made by Seller (including the representations and warranties set forth in Section 5 and the representations and warranties of such persons set forth in any officer’s certificate) shall survive the Closing until the date which is the eighteenth (18) month anniversary following the Closing.                                                                                                                                                                                                                                                                                                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | 10.1.2. | The representations, warranties, covenants and obligations of Seller, and the rights and remedies that may be exercised by Buyer Indemnitee, shall not be limited or otherwise affected by or as a result of either (i) any waiver of Closing conditions by Buyer or any of its Representatives, or (ii) any information furnished to, or any investigation made by or knowledge of, any of the Buyer Indemnitees or any of their Representatives. For purposes of this Agreement, each statement or other item of information set forth in the Disclosure Schedule shall be deemed to be a representation and warranty made by Seller in this Agreement. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  10.2.        Indemnification.

|   | 10.2.1. | From and after the Closing Date (but subject to Section 10.1.1), the Buyer Indemnitees may seek indemnification from Seller, and Seller shall be obligated to pay indemnification for any Damages that are suffered or incurred by any of the Buyer Indemnitees or to which any of them may otherwise become subject (regardless of whether or not such Damages relate to any third-party claim) and which arise from or as a result of, or are connected with: (i) any incompleteness of, inaccuracy in or breach of any representation or warranty by Seller set forth in Section 5 or elsewhere in this Agreement, or in any officer certificate, excluding however any expenses incurred by Buyer if it shall elect to take actions to comply with any open source licenses not in connection with any pending or threatened Legal Proceeding; (ii) any failure to comply with, or breach of any covenant or obligation of the Seller (including the covenants set forth in Sections 7, 8 and 9 of this Agreement) or any of Seller’s respective obligations pursuant to the Transaction Documents; (iii) any claims against Buyer with respect to the Retained Liabilities, including without limitation any liability of Seller (other than an Assumed Liability) that becomes a liability of Buyer for any reason, whether under any Tax law, under any bulk transfer law of any jurisdiction, under any common law doctrine of de facto merger or successor liability, or otherwise, (including without limitation, any liability as an employer related to the period prior to the Closing Date) but excluding any claim related to the Closing Statement addressed by the mechanism set forth in Sections 3.2.6 through 3.2.8; (iv) any claims against Buyer with respect to the Business whose cause is based on the operation of the Business by Seller prior to the Closing Date excluding anything assumed by the Buyer as part of the Assumed Liabilities; or (v) any Legal Proceeding relating to any incompleteness, inaccuracy, failure or breach referred to above (including any Legal Proceeding commenced by any Buyer Indemnitee for the purpose of enforcing any of its rights under this Section 10). |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 10.2.2. | Notwithstanding the foregoing, Seller shall not be obligated to provide indemnification for Losses in respect of claims made under this Section 10 unless the total of all such Losses shall exceed $150,000 in the aggregate, whereupon the full amount of such Losses (from the first U.S. Dollar) shall be recoverable by Buyer in accordance with the terms hereof; provided, however, that Buyer shall not be entitled to recover any Losses in excess of the Base Purchase Price (the “Maximum Liability”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 10.2.3. | Notwithstanding anything to the contrary (including in Section 10.2.2), nothing in this Agreement shall limit any right or remedy for fraud or any equitable remedy, including a preliminary or permanent injunction or specific performance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 10.2.4. | In the event of the assertion or commencement by any Person of any claim or Legal Proceeding with respect to which any of the Buyer Indemnitees shall have the right to seek indemnification pursuant to this Section 10, the Seller shall have the right, at its election following consultation with the party entitled to indemnification, to proceed with the defense of such claim or Legal Proceeding on its own, with counsel reasonably satisfactory to the party entitled to indemnification. If such party so proceeds with the defense of any such claim or Legal Proceeding, all reasonable expenses relating to the defense of such claim or Legal Proceeding shall be borne and paid by the Seller. The Seller shall have the right to settle, adjust or compromise such claim or Legal Proceeding with the consent of Buyer Indemnitee entitled to indemnification; provided, however, that such consent shall not be unreasonably withheld.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 10.2.5. | Each Buyer Indemnitees seeking indemnification shall give the Seller prompt notice of the commencement of any such Legal Proceeding; provided, however,that any failure to do so shall not limit any of the rights of the Buyer Indemnitees under this Section 10 (except to the extent such failure materially prejudices the defense of such Legal Proceeding).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 10.2.6. | Notwithstanding anything to the contrary herein, Each Buyer Indemnitees shall be entitled to seek any available remedy of law or equity in addition to any remedy provided herein, subject, other than in events as provided in Section 10.2.3, to the Maximum Liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

        11.   Termination

  11.1.        Termination.

|   | 11.1.1. | by mutual written consent of the parties;                                                                                                                                                                                                                                                                                                                            |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                 |
|   | 11.1.2. | by either party if a court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling or taken any other action, in each case restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable; or |
|   |    |                                                                                                                                                                                                                                                                                                                                                                 |
|   | 11.1.3. | by Buyer if the Closing has not taken place on or before December 31, 2009 (other than as a result of any failure on the part of Buyer to comply with or perform any covenant or obligation of Buyer set forth in this Agreement); or                                                                                                                                |
|   |    |                                                                                                                                                                                                                                                                                                                                                                 |
|   | 11.1.4. | by Seller if the Closing has not taken place on or before December 31, 2009 (other than as a result of the failure on the part of the Seller to comply with or perform any covenant or obligation set forth in this Agreement); or                                                                                                                                   |

  11.2.        Termination Procedures.

  11.3.        Effect of Termination.

        12.   General Provisions

  12.1.        Notices.

|   | if to Buyer:                 |
|--------|------------------------------|
|   |                         |
|   | Elbit Systems Ltd.           |
|   | Advanced Technology Center   |
|   | POB 539, Haifa 31053, Israel |
|   | Fax: +972-4-831-6266         |
|   | Attention: Yoav Kastel, Adv. |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   | with a copy to (which shall not constitute notice):     |
|--------|---------------------------------------------------------|
|   |                                                    |
|   | Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. |
|   | One Azrieli Center (Round Building)                     |
|   | Tel Aviv 67021, Israel                                  |
|   | Fax: +972-3-607-4411                                    |
|   | Attention: Esther Koren, Adv.; Dr. Shachar Hadar, Adv.  |
|   |                                                    |
|   | if to Seller:                                           |
|   |                                                    |
|   | BVR Systems (1998) Ltd.                                 |
|   | 16 Hamelacha St.                                        |
|   | Afek Industry Park                                      |
|   | Rosh Ha'ayin 48091, Israel                              |
|   | Fax: +972-9-900-8040                                    |
|   | Attention: Aviv Tzidon                                  |
|   |                                                    |
|   | with a copy to (which shall not constitute notice):     |
|   |                                                    |
|   | Yigal Arnon & Co.                                   |
|   | One Azrieli Center (Round Building)                     |
|   | Tel Aviv 67021, Israel                                  |
|   | Fax: +972-3-608-7713                                    |
|   | Attention: Orly Tsioni, Adv.                            |

  12.2.        Counterparts.

  12.3.        Taxes.

  12.4.        Entire Agreement.

  12.5.        Severability.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

  12.6.        Other Remedies.

  12.7.        Governing Law; Jurisdiction.

|   | 12.7.1. | This Agreement shall be governed by and construed in accordance with the laws of the State of Israel, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.                                           |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                         |
|   | 12.7.2. | Without derogating from the provisions of Section 3.8 herein, each party hereby irrevocably submits to the exclusive jurisdiction of the courts of Tel Aviv Jaffa, for the purpose of any actions or proceeding arising out of or relating to the Agreement. |

  12.8.        Specific Performance.

  12.9.        No Third Party Beneficiaries.

  12.10.      Amendment.

  12.11.      Extension; Waiver.

|   | 12.11.1. | No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | 12.11.2. | No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.                                              |

  12.12.      Successors and Assigns.

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

| ELBIT SYSTEMS LTD.                          |                      |
|---------------------------------------------|---------------------------|
|                                        |                      |   |   |
| By:                                         |                           |   |
| Name:                                       | Jacob Gadot               |   |
| Title:                                      | EVP M & A             |   |
|                                        |                      |   |
| By:                                         |                           |   |
| Name:                                       | Yoram Shmuely             |   |
| Title:                                      | EVP & Co.GM Aerospace |   |
|                                        |                      |   |   |
| BVR SYSTEMS (1998) LTD.                     |                      |
|                                        |                      |   |
| By:                                         |                           |   |
| Name:                                       | Aviv Tzidon               |   |
| Title:                                      | Chairman                  |   |   |
|                                        |                      |   |   |
| By:                                         |                           |   |
| Name:                                       | Reuven Shahar             |   |   |
| Title:                                      | CFO                       |   |   |
|                                        |                      |   |   |
| AVIV TZIDON, for the purpose of Section 8.4 |                      |
|                                        |                      |
|                                             |                      |

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

|   |  |   |   |  |
|--------|--|--------|--------|--|

----

----

----

| Elbit Systems Ltd.      |                  |   |   |          |
|-------------------------|-----------------------|--------|--------|---------------|
|                    |                  |   |   |          |   |   |
| By:                     |                       |   | By:    |               |
| Name:                   | Alon Afik             |   | Name:  | Alon Uri      |
|                    |                  |   |   |          |   |   |
| Title:                  | V.P. T&S, ELBIT   |   | Title: | Sales, ELBIT  |
|                    |                  |   |   |          |   |   |
| BVR Systems (1998) Ltd. |                  |   |   |          |
|                    |                  |   |   |          |   |   |
| By:                     |                       |   | By:    |               |
| Name:                   | Aviv Tzidon           |   | Name:  | Reuven Shahar |
|                    |                  |   |   |          |   |   |
| Title:                  | Chairman of the Board |   | Title: | CFO           |

----

----

----

----

|   | If to Buyer:                                            |
|--------|---------------------------------------------------------|
|   |                                                    |
|   | Elbit Systems Ltd.                                      |
|   | Advance Technology Center                               |
|   | P.O. Box 539, Haifa 31503, Israel                       |
|   | Attention: Yoav Kastel, Adv.                            |
|   |                                                    |
|   | with a copy to (which shall not constitute notice):     |
|   |                                                    |
|   | Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. |
|   | One Azrieli Center (Round Building)                     |
|   | Tel Aviv 67021, Israel                                  |
|   | Attention: Esther Koren, Adv.; Dr. Shachar Hadar, Adv.  |
|   |                                                    |
|   | If to Seller:                                           |
|   |                                                    |
|   | BVR Systems (1998) Ltd.                                 |
|   |                                                    |
|   | 16 Hamelacha St.                                        |
|   | Afek Industry Park                                      |
|   | Rosh Ha'ayin 48091, Israel                              |
|   | Attention: Aviv Tzidon                                  |
|   |                                                    |
|   | with a copy to (which shall not constitute notice):     |
|   |                                                    |
|   | Yigal Arnon & Co.                                   |
|   | One Azrieli Center (Round Building)                     |
|   | Tel Aviv 67021, Israel                                  |
|   | Attention: Orly Tsioni, Adv.                            |
|   |                                                    |
|   | If to Escrow Agent:                                     |
|   |                                                    |
|   | Yigal Arnon & Co. – Trust Company        |
|   | One Azrieli Center (Round Building)                     |
|   | Tel Aviv 67021, Israel                                  |
|   | Attention: Orly Tsioni, Adv.                            |

----

----

----

| ESCROW AGENT:                                     |   |
|---------------------------------------------------|--------|
| YIGAL ARNON & CO.  – TRUST COMPANY |   |
|                                              |   |   |   |
| By:                                               |   |
| Name:                                             |   |
| Title:                                            |   |
|                                              |   |   |
| BUYER:                                            |   |
| ELBIT SYSTEMS LTD.                                |   |
|                                              |   |
| By:                                               |   |
| Name:                                             |   |
| Title:                                            |   |
|                                              |   |   |   |
| By:                                               |   |
| Name:                                             |   |
| Title:                                            |   |
|                                              |   |   |   |
| SELLER:                                           |   |
| BVR SYSTEMS (1998) LTD.                           |   |
|                                              |   |   |
| By:                                               |   |
| Name:  Aviv Tzidon                           |   |
| Title:  Chairman of the Board                |   |
|                                              |   |   |   |
| By:                                               |   |
| Name:  Reuven Shahar                         |   |
| Title:  CFO                                  |   |

----