---

---

Exhibit 4.8

# SHARE EXCHANGE
AGREEMENT

THIS
AGREEMENT, made and entered into as of this 25 day of April, 2004 by and among Nexus
Telocation Systems Ltd. a public company incorporated under the laws of the State of
Israel whose registration number with the Registrar of Companies is 52-004147-6 (the
Buyer), and shareholders of Pointer (Eden Telecom Group SP.) Ltd., a
private company incorporated under the laws of the State of Israel whose registration
number with the Registrar of Companies is 51-176783-2 (the Company), as
listed in Annex A (collectively the Sellers). All references to
the term Sellers shall include each of the Sellers, severally and not jointly.

# W I T N E S S E T H:

WHEREAS,
the Sellers own the shares of the Company as set forth on Annex Aattached hereto
(the Shares), constituting 100% of the issued share capital of the
Company, including the Company shares held by the Buyer; and

WHEREAS,
the parties hereto desire that the Shares be exchanged for such number of ordinary shares
of the Buyer, par value NIS 0.03, as detailed in Annex A (Buyer
Shares) and warrants to purchase shares of the Buyer
(Warrants), on the terms and conditions set forth herein; and

WHEREAS,
certain of the Sellers wish to assign to the Buyer loans provided to the Company by such
relevant Sellers and the Buyer wishes to have such loans assigned to it, on the terms and
conditions set forth herein.

NOW,
THEREFORE, in consideration of the representations, warranties, covenants and agreements
contained herein, and upon the terms and subject to the conditions hereinafter set forth,
the parties do hereby agree as follows:

# ARTICLE I

TERMS OF EXCHANGE

1.1     Exchange of Shares. On the
Closing Date, (i) each of the Sellers shall sell, transfer, assign and deliver to Buyer
all of its respective number of shares out of the Shares; (ii) As full and complete
consideration for the Shares, the Buyer shall issue and sell to the Sellers number of
Buyer Shares and Warrants as set forth beside each of the Sellers names on Annex A
attached hereto. A form of the warrant to be granted to each of the Sellers is attached
hereto as Annex B. At the Closing, each of the Sellers shall deliver to Buyer duly
executed share transfer deeds, and Buyer shall issue to each of the Sellers the number of
shares of the Buyer Shares and Warrants as set forth on Annex A. Share certificates
in respect of the Buyer Shares will be distributed to the Sellers within fourteen days
from the date of the Closing.



---

---

1.2     Capital Notes. Prior to
the Closing each of the Sellers shall assign to the Buyer, for no consideration, all
capital notes issued to such Seller by the Company (the Capital Notes),
a form of the Capital Notes assignment is attached hereto as Annex C.

1.3     Assignment of Loans. On
the Closing Date those Sellers that provided the Company with loans will assign these
loans (the Loans) to the Buyer for consideration of shares of the Buyer
at a price per share of $0.50, to be issued by the Buyer to the Seller. Annex A
hereto details the shares of the Buyer to be issued in respect of the Loans assignments
(the Loan Shares). Copies of the Loans assignment agreements are
attached hereto as Annex D.

1.4     Indemnification for
Guarantees. On the Closing Date the Buyer will provide those Sellers (the
Guarantee Sellers) that provided the Company with guarantees (the
Guarantees) with an indemnification letter pursuant to which it shall
undertake to indemnify such Sellers in the event the banks shall exercise the Guarantees
provided by them, for consideration of Buyer Shares at a price per Buyer Share of $0.50,
to be paid by such Seller to the Buyer. A form of the indemnification letter is attached
hereto as Annex E. The payment of the Sellers to the Buyer shall be by way of
deduction of such number of Buyer Shares from the total amount of Buyer Shares due to such
Seller. Annex A hereto details the number of Buyer Shares to be deducted from each
of the Guarantee Sellers (the Guarantee Shares). It is hereby agreed
that Buyer shall furnish the Guarantee Sellers with confirmation letter from the Bank,
stating that the Guarantees shall be against specific loans only, and that such loans
repayment shall be in accordance with the repayment schedule, as specified in article
1.7.2 (v) hereof. The confirmed repayment schedule and release of Guarantees against such
payment shall become part of this Agreement and will be attached to it as Annex J.
In order to secure the Buyers undertakings to repay the loans in accordance with the
repayment schedule and release the Guarantee Sellers from the Guarantees, above detailed,
the Buyer shall issue to the Guarantee Sellers, with no further consideration, options to
purchase Ordinary Shares of the Buyer in an amount equal to the number of Guarantee
Shares. These options shall be exercisable, for their nominal value, in whole or in part,
as applicable, in the event the Buyer shall not comply with its obligation to repay the
loans and release the Guarantees in accordance with the repayment schedule, above
detailed. Upon repayment of the loans and cancellation of the Guarantees in accordance
with the repayment schedule the applicable number of options subject thereto shall become
null and void.

2

---

---

1.5     Exchange of Options to
purchase Shares. Each of the Companys employees listed on Annex F shall
transfer its Options to purchase Shares in the Company to the Buyer, in exchange for the
number of Buyers Options to purchase Buyers Shares as set forth beside each of
their names on Annex F attached hereto. Annex F includes all options granted
to employees of the Company as of the date hereof plus options to purchase an additional
1,605 Ordinary Shares of the Company to be granted to the employees of the Company prior
to the Closing Date, at an exercise price per share equal to the current exercise price of
the options held by the Companys employees and shall be fully vested as of the date
of grant. The Companys employees shall waive all rights to which they may have been
entitled in respect of any warrant or option to purchase shares of the Company. The
options to be granted to the Companys employees shall be fully vested at an exercise
price per share as detailed in Annex F.

Transfer
and exchange of the Options shall be pre-conditioned upon receipt from the Income Tax
Authorities of a pre-ruling that such exchange of Options to purchase Shares is not
subject to immediate payment of taxes and that the Buyers Options of the employees
shall be considered as if granted under the amended section 102 to the Income Tax
Ordinance.

Annex
F shall be comprised of the consents of the Companys employees to the exchange
of options in the manner above and waiver of any rights relating to the entitlement to
warrants or options to purchase shares of the Company.

3

---

---

1.6     The Closing. The
consummation of the exchange contemplated under sections 1.1  1.5 hereof in this
Agreement (the Closing) shall take place at the offices of Yigal Arnon
& Co., 1 Azrieli Center, Tel Aviv, Israel at 10:00 a.m. on __________, 2004, or at
such other time and location as the parties shall agree.

1.7     Transaction at Closing. At
the Closing, after counterparts of this Agreement have been executed and delivered by all
Parties, each of the following transactions shall occur, (or shall previously occurred)
which transactions shall be deemed to take place simultaneously and no transaction shall
be deemed to have been completed or any document delivered until all such transactions
have been completed and all required documents delivered:

1.7.1    
The Sellers shall deliver, or shall cause the Company to deliver, to the Buyer the
following documents:

| | (i) | Share
Transfer Deeds in respect of all the Shares of the Company owned by the
          Sellers.
| | --- | ------------------------------------------------------------------------------------------------

| | (ii) | Approval
of the Board of Directors of the Company to the transfer of the Shares.
| | ---- | --------------------------------------------------------------------------------

| | (iii) | The
resignation of the directors of the Company.
| | ----- | ------------------------------------------------

| | (iv) | Approval
of the Income Tax Authorities to the exchange of the options of the Companys
employees;
| | ---- | -------------------------------------------------------------------------------------------------

1.7.2    
The Buyer shall deliver to the Sellers the following documents:

| | (i) | Resolutions
of the Shareholders Meeting of the Buyer to increase the share capital of the Buyer and
resolutions of the Buyers Board of Directors approving the execution and
performance of this Agreement including the issuance of the Buyer Shares, Warrants and
Loan Shares and any other required corporate approvals according to US and Israeli law.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Approval
of the Office of the Chief Scientist and Investment Center.
| | ---- | --------------------------------------------------------------------

| | (iii) | Approval
of the Anti-Trust Controller, if required.
| | ----- | ---------------------------------------------------

| | (iv) | Approval
of Ministry of Communications as required under the Companys license.
| | ---- | -------------------------------------------------------------------------------

4

---

---

| | (v) | Approval
of Bank HaPoalim B.M. to specify the Guarantees to specific loans and to cancel the
Guarantees in accordance with an agreed upon repayment schedule of such loans.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1.7.3    
The Buyer shall deliver to each of the Sellers its respective share certificate in
connection with the Buyer Shares within fourteen days from the Closing.

DBSI
Investments Ltd. (DBSI), the controlling shareholder of the Buyer,
shall grant to each of the Sellers, for a period of 24 months from the Closing, a tag
along right in connection with any and all sale/s of its shares of the Buyer, during such
period, which reduce, in the aggregate, DBSIs holdings in the Buyer, on a fully
diluted basis, to below 50% of its percentage holdings of the Buyer, on a fully diluted
basis, immediately following the Closing. This right shall be pro-rata among such Sellers
that utilize such right and DBSI, in proportion to their holdings in the Buyer at the date
of exercise of this right. A form of the agreement to be entered into between DBSI and the
Sellers is attached hereto as Annex G.

# ARTICLE II

REPRESENTATIONS AND
WARRANTIES OF SELLERS

Each
of the Sellers, severally, and not jointly, hereby represents and warrants as of the date
hereof as follows:

2.1     Execution and Delivery.
Each of the Sellers represents with respect to itself, that upon Closing, this Agreement
shall have been duly executed and delivered on behalf of itself and constitutes the valid
and binding obligation of the Seller, enforceable against the Seller in accordance with
its terms.

2.2     Authorization. Each of the
Sellers represents with respect to itself that all actions on the part of such Seller
necessary for authorization, execution, delivery, and performance by it of this Agreement,
have been duly taken and this Agreement is such Sellers legal, valid, and binding
obligation, enforceable with respect to the Buyer in accordance with its terms. The
authorization, execution, delivery, and performance by such Seller of this Agreement do
not require the approval or consent of third party or governmental agency except the
approval of the Anti-Trust Controller.

5

---

---

2.3     Title to Shares. Each of
the Sellers Shares of the Company transferred to the Buyer, are duly authorized,
validly issued, fully paid, and non assessable, and free and clear of liens, security
interests, pledges, charges and encumbrances.

2.4     Investment Intent. Each of
the Sellers is acquiring the Buyer Shares, Warrants and Loan Shares solely for their own
account and not with a view to a sale or distribution thereof in violation of any
securities laws.

# ARTICLE III

REPRESENTATIONS AND
WARRANTIES OF BUYER

3.1     Corporate Existence of Buyer,
etc. The Buyer is a company duly registered and validly existing under the laws of the
State of Israel and has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as presently conducted. The shares of
the Buyer are traded on the OTC Bulletin Board under the symbol NXUS.OB. Upon Closing,
this Agreement shall have been duly executed and delivered on behalf of the Buyer and
constitutes the valid and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms.

3.2     Capitalization. The
authorized capitalization of the Buyer on the date hereof is 6,000,000 NIS divided to
200,000,000 ordinary shares, par value NIS 0.03 each. 120,717,480 ordinary shares are
outstanding on the date hereof. Prior to the Closing the share capital of the Buyer shall
be increased to 12,000,000 NIS divided into 400,000,000 Ordinary Shares, par value NIS
0.03. All of the outstanding ordinary shares have been validly issued and are fully paid
and non-assessable with no personal liability attaching to the ownership thereof. There
are no outstanding or enforceable subscriptions, calls or convertible securities other
than the outstanding options and warrants issued which are described on Annex H.

6

---

---

3.3     Buyer Shares, Warrants and
Loan Shares. The Buyer Shares, Warrants and Loan Shares which will be issued to the
Sellers, will be duly authorized, validly issued, fully paid, and non assessable. The
Sellers will have good and marketable title to the Buyer Shares, Warrants and Loan Shares
free and clear of all liens, security interests, pledges, charges, encumbrances.

3.4     Authorization. All actions
on the part of the Buyer necessary for authorization, signature, delivery, and performance
by it of this Agreement, has been duly taken and this Agreement is its legal, valid, and
binding obligation, enforceable as to the Buyer in accordance with its terms. The
authorization, execution, delivery, and performance by the Buyer of this Agreement does
not require the approval or consent of third party or governmental agency except the
approval of the Chief Scientist, Investment Center, Anti-Trust Controller and Ministry of
Communication which shall be handled by the Buyer and which shall approach such entities
no later than ten days from the execution of this Agreement.

3.5     Public Company. The shares
of the Buyer are publicly traded and the Buyer undertakes to make its best efforts,
relating to matters under its control, to keep its shares publicly traded for a period of
at least 24 months from the Closing Date.

3.6     No Additional
Representations. The Buyer is familiar with the Company, its property, its obligations
and its activities. Buyer is, thus, purchasing the Shares AS IS, without
having relied upon any representations and/or warranties by the Seller, except those
representations and warrants specifically indicated herein.

3.7     Immediately following the
Closing, the capitalization table of the Buyer, on a fully diluted basis, will be as
reflected in Annex I hereto.

# ARTICLE IV

CERTAIN COVENANTS OF
THE PARTIES

The
Sellers, on the one hand, and Buyer, on the other hand, hereby covenant to and agree with
each other as follows:

4.1    Conduct of Business.
 Between the date hereof and the Closing Date:

7

---

---

(a)    
          Sellers will cause the Company to (i) operate its businesses only in the
          ordinary course; (ii) use its best efforts to preserve the business organization
          of the Company as a whole intact; (iii) continue all of the insurance policies
          in full force and effect; (iv) use its best efforts to keep available until the
          Closing Date the services of their present officers and key employees; (v) pay
          its accounts payable and all other obligations in the ordinary course of
          business; and (vi) use its best efforts to preserve its relationships with its
          material lenders, suppliers, customers, licensors and licensees and others
          having material business dealings with it such that the business will not be
          impaired; and

(b)    
          Sellers will cause the Company not to (i) make any change in its Memorandum
          and/or Articles of Association or similar charter documents; (ii) make any
          change in its issued or outstanding share capital, or issue any warrant, option
          or other right to purchase shares of its share capital or any security
          convertible into shares of its share capital, or redeem, purchase or otherwise
          acquire any shares of its share capital; (iii) voluntarily incur or assume,
          whether directly or by way of guarantee or otherwise, any obligation or
          liability, except obligations and liabilities incurred in the ordinary course of
          business; (iv) sell or transfer any part of its assets, property or rights, or
          cancel any material debts or claims; (v) amend or terminate any Company contract
          or any permit to which it is a party, except in the ordinary course of business
          pursuant to the terms of such Agreement; (vi) make any change in any Company
          benefit plans; (vii) make any changes in the accounting methods, principles or
          practices employed by it, except as required by generally accepted accounting
          principles; (viii) make any capital expenditure or enter into any commitment
          therefor; (ix) incur any debt or make any borrowings, or enter into any
          commitment therefor; or (x) enter into any other agreement, course of action or
          transaction material to the Company except in the ordinary course of business.

4.2     Undertakings. Sellers and
Buyer will use their best efforts, and will cooperate with one another, to secure all
necessary consents, approvals, authorizations and exemptions from governmental agencies as
shall be required in order to enable Sellers and Buyer to effect the transactions
contemplated hereby in accordance with the terms and conditions hereof.

4.3     Access. From the date of
this Agreement to the Closing Date, Sellers shall (i) provide Buyer with such information
as Buyer may from time to time reasonably request with respect to the Company and the
transactions contemplated by this Agreement, (ii) provide Buyer and its officers, counsel
and other authorized representatives reasonable access during regular business hours and
upon reasonable notice to the properties, books, and records of the Company, or as may
otherwise from time to time reasonably request, and (iii) permit Buyer to make such
inspections thereof as Buyer may reasonably request.

8

---

---

4.4.    
          Conduct of Business of the Buyer. Between the date hereof and the Closing
          Date:

(a)    
          Buyer will (i) operate its businesses only in the ordinary course and will
          inform the Sellers of any material changes or events; (ii) use its best efforts
          to preserve the business organization of the Buyer as a whole intact; (iii)
          continue all of the insurance policies in full force and effect; (iv) use its
          best efforts to keep available until the Closing Date the services of their
          present officers and key employees; (v) pay its accounts payable and all other
          obligations in the ordinary course of business; and (vi) use its best efforts to
          preserve its relationships with its material lenders, suppliers, customers,
          licensors and licensees and others having material business dealings with it
          such that the business will not be impaired.

# ARTICLE V

COVENANTS RELATING
TO THE BUYER SHARES AND LOAN SHARES

5.1    Restriction.
          None of the Buyer Shares or Loan Shares acquired hereunder, nor the shares
          resulting from the exercise of the Warrants, may be sold, transferred or
          otherwise disposed of (any such sale, transfer or other disposition, a
          sale), except in compliance with (i) United States Federal
          Securities laws (which generally provide for a 12 month waiting period before
          sales of restricted securities), (ii) state blue sky laws and (iii) this Article
          V.

9

---

---

5.2     Legend on Shares. Each
certificate representing the Buyer Shares and Loan Shares shall be stamped or otherwise
imprinted on its face with a legend in the following form:

The
shares represented by this certificate have not been registered under the Securities Act
of 1933, as amended (the Securities Act) and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence of (1) an
effective Registration Statement under the securities act, (2) to the extent applicable,
an exemption pursuant to Rule 144 under Securities Act (or similar rule under the
Securities Act relating to the disposition of securities) or (3) an opinion of counsel, if
such opinion shall be reasonably satisfactory to counsel for issuer, that an exemption
from registration under the Securities Act is available. The Shares have been acquired for
investment and may not be sold, transferred or otherwise disposed of except in compliance
with the Securities Act.

# ARTICLE VI

REGISTRATION RIGHTS

6.1.    
          Definitions. As used in this Agreement, the term (A) Registrable
          Securities means (i) the Buyer Shares and Loan Shares issued
          hereunder; (ii) the shares resulting from the exercise of the Warrants and (iii)
          any securities which may be issued with respect to shares acquired or exercised
          by the Sellers hereunder by way of bonus shares, share splits or share
          conversions on account of the Buyer Shares, Loan Shares and shares resulting
          from the exercise of the Warrants; the term Securities Act
          means the U.S. Securities Act of 1933, as amended; the term
          registration means registration under the Securities Act; and the
          term Commission means the U.S. Securities and Exchange
          Commission; and (B) Underwritten Offering means a
          registration in connection with which securities are sold to an underwriter for
          re-offering to the public pursuant to an effective Registration Statement.

6.2.    
          Registrable Securities. As to any particular Registrable Securities, such
          securities will cease to be Registrable Securities when they have been
          effectively registered under the Securities Act and/or any other applicable
          securities law, although they will again become Registrable Securities if later
          deregistered.

10

---

---

6.3.    
          Registration. No later than two weeks from the Closing the Buyer shall
          start to prepare a Registration Statement on Form F-3 with respect to all of the
          Registrable Securities (the Registration Statement). The
          Buyer will file the Registration Statement with the Commission within four
          months after the Closing and shall make its best efforts to have such
          registration Statement declared effective by the Commission as soon as
          practicable thereafter. The Buyer agrees to use its best efforts to keep the
          Registration Statement continuously effective for a period of 36 months
          following the date on which the Registration Statement is initially declared
          effective or such shorter period as will terminate when all of the shares
          covered by the Registration Statement have been sold pursuant to the
          Registration Statement. The Buyer further agrees, if necessary, to supplement or
          amend the Registration Statement, if required by the rules, regulations or
          instructions applicable to the registration form used by the Buyer for such
          Registration Statement or by the Securities Act or by any other rules and
          regulations there under for registration.

The Buyer shall not be required to
keep the Registration Statement effective between March 15 and June 30 of each year. The
Buyer shall (i) notify each Seller in writing at least 30 business days in advance, if the
Registration Statements effectiveness is to be suspended and (ii) immediately notify
each Seller upon the Registration Statement becoming effective again.

6.4      No Seller may participate in any
Underwritten Offering hereunder unless such Seller (i) agrees to sell its Registrable
Securities on the basis provided in any underwriting agreements entered into in connection
therewith and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other customary documents required under the
terms of such agreements.

6.5     Registration Expenses. The
Buyer shall bear and be responsible for all registration expenses incurred in connection
with the transactions described herein. Registration expenses include all expenses
incident to the Buyers performance of or compliance with this Agreement, including
without limitation expenses incurred in connection with the preparation of a prospectus.
Notwithstanding the foregoing, however, all underwriters discounts and commissions
in respect of the sale of Registrable Securities shall be paid by the Sellers, pro
rata in accordance with the number of shares sold in the offering, and the Sellers
shall bear the expense of their legal counsel, if separate from the Buyers legal
counsel.

11

---

---

6.6      The Buyer undertakes not to
register for trade, prior to the registration of the Registrable Securities, any shares to
be issued after the date of this Agreement.

6.7      The Buyer will keep each Seller
advised in writing as to the initiation of such registration and as to the completion
thereof. At its expense, the Buyer will:

6.7.1     Furnish to the Sellers such
numbers of copies of the Registration Statement in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.

6.7.2     Notify each Seller of
Registrable Securities covered by the Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act or the happening of
any event as a result of which the prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.

6.8     Indemnification.

6.8.1     The Buyer will indemnify each
Seller, each of such Sellers officers, directors and partners, and each person
controlling such Seller, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement of a material fact contained in
any prospectus, offering circular or other document (including any related Registration
Statement, notification or the like) incident to any such registration, qualification or
compliance, or based on any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading, or any violation by the Buyer of the Securities
Act including any rule or regulation thereunder applicable to the Buyer relating to action
or inaction required of the Buyer in connection with any such registration, qualification
or compliance, and will reimburse each such Seller, each of its officers, directors and
partners, and each person controlling such Seller, each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Buyer will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or is based
on any untrue statement or omission so made in strict conformity with written information
furnished to the Buyer by such Seller or underwriter, if any, and stated to be
specifically for use therein, and provided further that the Buyer will not
be liable in any such case if a settlement was effected without the prior written consent
of the Buyer, which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of
the Sellers, the underwriter, or any controlling person of the Sellers or the underwriter,
and regardless of any sale in connection with such offering by the Sellers. Such indemnity
shall survive the transfer of the securities by a Seller.

12

---

---

6.8.2     Sellers Indemnity. The Sellers
shall indemnify and hold harmless the Buyer, any underwriter for the Buyer and each
person, if any, who controls the Buyer or such underwriter, from and against any and all
losses, damages, claims, liabilities, costs or expenses (including any amounts paid in any
settlement effected with the selling shareholders consent) to which the Buyer, any
such underwriter or any such controlling person may become subject under applicable law or
otherwise, insofar as such losses, damages, claims, liabilities (or actions or proceedings
in respect thereof), costs or expenses arise out of or are based on (i) any untrue
statement of any material fact contained in the Registration Statement or included in the
prospectus, as amended or supplemented, or (ii) the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading, and the Sellers will
reimburse the Buyer, any such underwriter and each such controlling person of the Buyer or
any such underwriter, promptly upon demand, for any reasonable legal or other expenses
incurred by them in connection with investigating, preparing to defend or defending
against or appearing as a third-party witness in connection with such loss, claim, damage,
liability, action or proceeding; in each case to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such Sellers to the
Buyer specifically for inclusion in the Registration Statement or prospectus and that such
information was reasonably relied upon by the Buyer for use in the Registration Statement,
prospectus or to the extent that such information related to the Sellers or the
Sellers proposed method of distribution of Registrable Securities and was reviewed
and expressly approved in writing by the Sellers expressly for use in the Registration
Statement, form of prospectus (it is hereby clarified that the indemnification liability
detailed herein shall only apply to such Seller/s who provided such untrue statements or
omitted to include certain information as detailed in subsection (i) and (ii) above);
provided, however, that the indemnity shall not apply to amounts paid in
settlement of any losses if such settlement is effected without the prior written consent
of the Sellers. In no event shall the liability of any Seller hereunder be greater in
amount than the dollar amount of the net proceeds received by the Sellers upon the sale of
the Registrable Securities giving rise to such indemnification obligation; and in case
that no sale of Registrable Securities occurred, then the liability shall not exceed the
average value of the securities within the first three months after the registration.

13

---

---

6.9     Information by Seller.Each Seller shall furnish to the Buyer such information regarding such Seller, the
Registrable Securities held by it and the distribution proposed by such Seller as the
Buyer may reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.

6.10     Rule 144
Reporting.With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of the Restricted Securities
to the public without registration, the Buyer agrees to:

6.10.1     Make and keep public
information available as those terms are understood and defined in Rule 144 under the
Securities Act;

6.10.2     File with the Commission in a
timely manner all reports and other documents required of the Buyer under the Securities
Act and the Exchange Act;

14

---

---

6.10.3     So long as a holder of
Registrable Securities owns any Restricted Shares (i.e. shares required to bear a legend
restricting their transferability), furnish to such holder forthwith upon request a
written statement by the Buyer as to its compliance with the reporting requirements of
Rule 144, and of the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Buyer, and such other reports and documents so filed as
such holder may reasonably request in availing itself of any rule or regulation of the
Commission allowing a holder to sell any such shares without registration.

6.11     Transfer or Assignment of
Registration Rights. Any of the Sellers may assign its rights to register Registrable
Securities pursuant to this Agreement to a transferee of all or any part of its
Registrable Securities, on condition that such transferee shall fully undertake and comply
with all limitations and obligations set herein. The transfer shall be effective only if
(i) within twenty (20) days after such transfer, the transferor or transferee furnishes
the Buyer with written notice of the name and address of such transferee and the
securities with respect to which such registration rights are being assigned, and (ii) the
transferee provides the Buyer with its written agreement to be bound by this Agreement.

# ARTICLE VII

CONDITIONS TO
BUYERS OBLIGATIONS

The
obligations of Buyer to consummate the transactions contemplated hereby shall be subject
to the satisfaction on or prior to the Closing Date of all of the following conditions,
except such conditions as Buyer may waive:

7.1     Representations, Warranties
and Covenants of Sellers. Sellers shall have complied in all material respects with
all of its agreements and covenants contained herein required to be complied with at or
prior to the Closing Date, and all the representations and warranties of Sellers contained
herein shall be true on and as of the Closing Date with the same effect as though made on
and as of the Closing Date. As a pre-condition to Closing Buyer shall have received a
certificate executed by the Sellers, and dated as of the Closing Date, certifying as to
the fulfillment of the conditions set forth in this Section 7.1.

15

---

---

7.2     Further Action. All action
(including notifications and filings) that shall be required to be taken by Sellers in
order to consummate the transactions contemplated hereby shall have been taken and all
consents, approvals and authorizations that shall be required in order to enable Sellers
to consummate the transactions contemplated hereby shall have been duly obtained.

7.3     No Governmental or Other
Proceeding. No order of any court or governmental or regulatory authority or body
which restrains or prohibits the transactions contemplated hereby shall be in effect on
the Closing Date and no suit or investigation by any government agency to enjoin the
transactions contemplated hereby or seek damages or other relief as a result thereof shall
be pending or threatened as of the Closing Date.

7.4     Sellers shall obtain the
Companys employees consents to the exchange of options as above detailed and
the Income Tax Authorities approval for the options exchange.

# ARTICLE VIII

CONDITIONS TO
SELLERS OBLIGATIONS

The
obligations of Sellers to consummate the transactions contemplated hereby shall be subject
to the satisfaction on or prior to the closing Date of all of the following conditions,
except such conditions as Sellers may waive:

8.1     Representations, Warranties
and Covenants of Buyer. Buyer shall have complied in all material respects with all of
its agreements and covenants contained herein required to be complied with at or prior to
the Closing Date, and all the representations and warranties of Buyer contained herein
shall be true on and as of the Closing Date with the same effect as though made on and as
of the Closing Date. As a pre-condition to Closing Buyer shall have received a certificate
executed by the Buyer, and dated as of the Closing Date, certifying as to the fulfillment
of the conditions set forth in this Section 8.1.

16

---

---

8.2     Further Action. All action
(including notifications and filings) that shall be required to be taken by Buyer in order
to consummate the transactions contemplated hereby shall have been taken and all consents,
approvals and authorizations that shall be required in order to enable Buyer to consummate
the transactions contemplated hereby shall have been duly obtained.

8.3     No Governmental or Other
Proceeding. No order of any court or governmental or regulatory authority or body
which restrains or prohibits the transactions contemplated hereby shall be in effect on
the Closing Date and no suit or investigation by any government agency to enjoin the
transactions contemplated hereby or seek damages or other relief as a result thereof shall
be pending or threatened as of the Closing Date.

|8.4 | Buyer
shall obtain the following required approvals and consents:
|--- | -----------------------------------------------------------------

| | (i) | Approval
of the Board of Directors of the Buyer to the issuance of the Buyer
               Shares, Warrants and Loan Shares and the increase of the share capital of
the                Buyer and any other required corporate approvals according to US and
Israeli                law.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | Approval
of the Office of the Chief Scientist and Investment Center.
| | ---- | --------------------------------------------------------------------

| | (iii) | Approval
of the Anti-Trust Controller, if required.
| | ----- | ---------------------------------------------------

| | (iv) | Approval
of the Ministry of Communication.
| | ---- | ------------------------------------------

| | (v) | DBSI
shall enter into the agreement in the form attached hereto as Annex G.
| | --- | ---------------------------------------------------------------------------

| | (vi) | Approval
of Bank HaPoalim B.M. to specify the Guarantees to specific loans and to cancel the
Guarantees in accordance with an agreed upon repayment schedule of such loans.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17

---

---

# ARTICLE IX

RELEASE OF SELLERS
& RUN OFF INSURANCE POLICY FOR FORMER DIRECTORS

9.1      Conditioned
upon the occurrence of the Closing of the transactions contemplated hereunder, each of the
Sellers hereby agrees and confirms that he or it has no demands and/or claims against the
Company, including but not limited to demands and/or claims regarding any repayment of any
debentures and/or convertible loans, and the Buyer hereby confirms that each of them shall
have no demands and/or claims against any of the Sellers, including but not limited to
demands and/or claims regarding any repayment of any debentures and/or convertible loans
relating to the Company.

9.2      The
Buyer undertakes to maintain a run-off insurance policy for the directors of the Company
in office immediately prior to this Agreement.

9.3      The
Buyer hereby waives any claim and/or demand against any and all of the directors and/or
officers of the Company as of the date hereof, in connection with their position as
directors and/or officers, as applicable, of the Company. In addition, the Buyer hereby
waives any claims and/or demands against the Sellers in their position as shareholders of
the Company.

# ARTICLE X

TERMINATION PRIOR TO
CLOSING

This Agreement may be terminated at
any time prior to the Closing by either the Buyer or the Sellers in the event that the
average closing price of one share of the Buyer during the period commencing March 3, 2004
until the Closing Date is lower than $0.15 or higher than $0.85. In the event of
termination this Agreement shall be null and void.

# ARTICLE XI

MISCELLANEOUS

11.1     Entire Agreement. This
Agreement constitutes the sole understanding of the parties with respect to the subject
matter hereof. No amendment, modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly executed by the
parties hereto.

18

---

---

11.2     Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original and all of which shall constitute the same
instrument.

11.3     Headings.
          The headings of the Sections and paragraphs of this Agreement are inserted for
          convenience only and shall not be deemed to constitute part of this Agreement or
          to affect the construction hereof.

11.4     Taxation.
          Each Party shall bear the payment of any tax or levy, should such payment apply
          to the Party, pursuant to the provision of any law, in its status of transferor
          or transferee, depending on the case. Without derogating from the foregoing,
          each Seller, alone, will be responsible for payment of any capital gains tax, if
          any, which may apply as a result of (i) the transfer and sale of the Shares, and
          (ii) the issuance of Buyer Shares, Warrants and Loan Shares by the Buyer, as
          contemplated herein.

11.5      No
Waiver. No action taken pursuant to this Agreement will be deemed to constitute a
waiver by the party taking any action of compliance with any representation, warranty or
agreement contained herein. The waiver by any party hereto of any condition or of a breach
of any other provision of this Agreement will not operate or be construed as a waiver of
any other condition or subsequent breach. The waiver by any party of any of the conditions
precedent to its obligations under the Agreement will not preclude it from seeking redress
for breach of this Agreement other than with respect to the condition so waived.

11.6     This
Agreement, which is signed by all of the Sellers, shall also be deemed as a waiver from
each of the Seller to the other Sellers, of the right of first refusal, which it may have
been entitled with respect of any sale of the Companys Shares by the other Sellers,
pursuant to the Shareholder Agreement dated October 16, 2000.

11.7     No Broker. Each of the
Parties represents, as to itself, its subsidiaries and its affiliates, that no agent,
broker, investment banker or other firm or person is or shall be entitled to any
brokers or finders fee or any other commission or similar fee in connection
with this Agreement.

19

---

---

11.8     Notices. Any notice,
request, instruction or other document (each, a notice) to be given hereunder
by any party hereto to any other party hereto shall be in writing and delivered personally
or sent by registered or certified mail, postage prepaid,

if to Sellers to: in accordance with Annex A

if to Buyer to:   Nexus Telocation Systems Ltd.

| | 1
Korazin Street, Givatayim
| | ---------------------------

| | Attention:
Arik Avni, CEO
| | -------------------------

with a copy to:   Yigal Arnon & Co.,

| | 1
Azrieli Center, Tel Aviv
| | --------------------------

| | Attention:
Orly Tsioni, Adv.
| | ----------------------------

11.9     Further  Assurances. From
and after the Closing  Date,  each party,  at the request of the other party and at the
requesting  party's  expense,  will each take all such action and deliver all such
documents as shall be reasonably necessary  or  appropriate  to  confirm  and vest  title
to the  Shares in Buyer and the  Buyer's  Shares in Seller and otherwise enable Buyer and
Seller to enjoy the respective benefits contemplated by this Agreement.

11.10     Governing  Law and
 Jurisdiction.  The  validity,  performance  and  enforcement  of this  Agreement  and
any agreement  entered  into  pursuant  hereto,  will be  governed  solely  by the  Laws
of the  State of  Israel  and the applicable courts in the Tel Aviv - Jaffa district
shall have exclusive jurisdiction.

11.11     Public  Announcements.
 Sellers and Buyer shall consult with each other before  issuing any press releases or
otherwise  making any public  statements with respect to this Agreement and the
transactions  contemplated  hereby and shall not issue any such press release or make any
public statement prior to such  consultation,  except to the extent required by law.

20

---

---

IN
WITNESS  WHEREOF,  each of the parties hereto has caused this Agreement to be executed on
its behalf as of the date first above written.

|NEXUS TELOCATION SYSTEMS LTD.     
                                  
By:      _______________          
Title:   _______________          
Name:    _______________          
                                  CLAL INFORMATION TECHNOLOGIES LTD.
By:      _______________          
Title:   _______________          
Name:    _______________          M. VERTHEIM (HOLDINGS) LTD.      
By:      _______________          
Title:   _______________          
Name:    _______________          DROR GOLDMAN LTD.      
By:      _______________          
Title:   _______________          
Name:    _______________          I. BRANDES LTD.
By:      _______________
Title:   _______________
Name:    _______________ | PELEPHONE COMMUNICATIONS LTD.
By:      _______________ 
Title:   _______________ 
Name:    _______________ POLAR COMMUNICATIONS LTD.
By:      _______________
Title:   _______________
Name:    _______________ERDINAST - BEN NATHAN TRUSTEES LTD.
By:      _______________
Title:   _______________
Name:    _______________GADI AVIRAM LTD.
By:      _______________
Title:   _______________
Name:    _______________
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

---

---

ANNEX A

|Name of Seller &
Address     | Company's
Shares
Transferred | Buyer
Shares | Warrants  | Loan Shares | Guarantee
Shares (and
equal number
of options) | Total
shares of
Buyer to
be issued
|---------------------------- | ---------------------------- | ------------ | --------- | ----------- | ---------------------------------------------- | ----------------------------------
|
|
|
|
|Pelephone                    | 5,091                        | 9,542,283    | 6,609,219 | 2,053,381   | (1,677,334)                                    | 16,527,549                        
|Communications Ltd.         
|33 Itzhak  Rabin St.,       
|Givatayim                   
|                             |                              |              |           |             |                                                |                                   
|Clal Information             | 4,552                        | 8,531,924    | 5,909,419 | 3,302,934   |                                                | 17,744,277                        
|Technologies Ltd.           
|3 Azrieli Center,           
|44th Floor, Tel Aviv        
|                             |                              |              |           |             |                                                |                                   
|Polar Communications Ltd.    | 4,552                        | 8,531,924    | 5,909,419 | 3,262,200   |                                                | 17,703,543                        
|21 Ha'arbah St., Tel Aviv   
|                             |                              |              |           |             |                                                |                                   
|M. Vertheim  (Holdings Ltd.) | 4,191                        | 7,855,794    | 5,441,116 | 1,625,932   | (1,447,111)                                    | 13,475,731                        
|c/o Soft Drinks             
|Production Co., 129         
|Khaneman St., Bnei Brak     
|                             |                              |              |           |             |                                                |                                   
|Erdinast  - Ben Nathan       | 499                          | 935,518      | 647,963   | 185,640     | (164,444)                                      | 1,604,677                         
|Trustees Ltd.               
|25 Nachmani St., Tel Aviv   
|                             |                              |              |           |             |                                                |                                   
|Dror Goldman Ltd.            | 67                           | 125,588      | 86,985    |             |                                                | 212,573                           
|21 Tushiya St., Tel Aviv    
|                             |                              |              |           |             |                                                |                                   
|Gadi Aviram Ltd.             | 67                           | 125,588      | 86,985    |             |                                                | 212,573                           
|21 Tushiya St., Tel Aviv    
|                             |                              |              |           |             |                                                |                                   
|I. Brandes Ltd.              | 67                           | 125,588      | 86,985    |             |                                                | 212,573                           
|21 Tushiya St., Tel Aviv     |                              |              |           |            

22

---

---