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# Exhibit 4.(b)1

# REGISTRATION
RIGHTS AGREEMENT

THIS
REGISTRATION RIGHTS AGREEMENT(this Agreement) is entered
into as of the __ day of _____, 2008, by and among ECTEL LTD., a company
incorporated under the laws of the State of Israel, 10 Amal Street, Park Afek, Rosh
Haayin 48902, Israel (the Company), and the entities whose name
and address is listed on Schedule 1 attached hereto (each a
Holder and collectively, the Holders).

WHEREAS,
the Holders are holders of Ordinary Shares, par value NIS 0.04 each, of the Company
(Ordinary Shares);

WHEREAS,
the parties wish to set provisions governing the registration of the Companys
Ordinary Shares held by the Holders, in accordance with the terms set forth herein.

NOW,
THEREFORE, in consideration of the mutual agreements, covenants and other promises set
forth herein, the mutual benefits to be gained by the performance thereof, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereby agree as follows:

1.    
          DEFINITIONS. As used in this Agreement, the following
          capitalized terms shall have the following respective meanings:

1.1.        Board means
the Board of Directors of the Company.

1.2.        Exchange
Act means the Securities Exchange Act of 1934, as           amended, and the
rules and regulations promulgated thereunder.

1.3.        Form
F-3 means such form (or Form S-3, as the case may be)           under the
Securities Act as in effect on the date hereof or any successor or           similar
registration form under the Securities Act subsequently adopted by the           SEC,
which permits inclusion or incorporation of substantial information by
          reference to other documents filed by the Company with the SEC.

1.4.        Holder(s) means
as set forth in the preamble to this           Agreement and any of their respective
successors and assigns (solely in           accordance with Section 9 of this Agreement),
in each case, so long as such           Holder holds of record at least 50% (except that
with respect to Section 3 it           shall be 25%) of the Registrable Securities listed
opposite its name in Schedule           I, provided, however, that under no
circumstances shall the term Holder           include persons who have acquired Ordinary
Shares sold in the open market or           pursuant to a registration statement.

1.5.        Original
Registrable Securities means the Registrable           Securities outstanding
on the date hereof, excluding any Registrable Securities           that cease to be
Registrable Securities after the date hereof for any reason           whatsoever and
excluding Registrable Securities that are transferred without an           assignment of
registration rights under Section 9 hereunder.

1.6.        Prospectus means
the prospectus included in a Registration           Statement, as amended or supplemented
by any prospectus supplement and by all           other amendments thereto and all
material incorporated by reference in such           prospectus.



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1.7.        Register, registered, and
          registration refer to a registration effected by preparing
          and filing a registration statement in compliance with the Securities Act, and
          the declaration or ordering of effectiveness of such registration statement or
          document.

1.8.        Registrable
Securities means (i) the Ordinary Shares held by           the Holders on the
date hereof that are listed opposite the name of each Holder           on Schedule I, and
(ii) any and all securities issued or issuable with respect           to the securities
described in clause (i) upon any stock split, stock dividend           or the like, or
into which such Ordinary Shares have been or may be converted to           or exchanged
into in connection with any merger, consolidation,           reclassification,
recapitalization or similar event; in each case, until their           effective
registration under the Securities Act and their resale in accordance           with the
registration statement in which such Registrable Securities are           included,provided
however, that at such time any such securities become           eligible for sale
under Rule 144 within a period of 90 days thereafter, then           such securities
shall no longer be deemed to be Registrable           Securities.

1.9.        SEC means
the United States Securities and Exchange           Commission.

1.10.        SecuritiesAct shall
mean the Securities Act of 1933,           as amended, and the rules and regulations
promulgated thereunder.

2.    
          DEMAND REGISTRATION.

2.1.        Request
for Shelf Registration. Subject to the conditions of this Section           2, at any
time after the date hereof, if the Company shall receive a written           request from
Holders owning at least 30% of the Original Registrable Securities           outstanding
on the date hereof (the Initiating Holders) that           the Company
file a registration statement on Form F-3 for an offering to be made           on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act
          registering the resale from time to time by the Holders thereof of Registrable
          Securities constituting at least 30% of the Original Registrable Securities,
          then the Company shall, within thirty (30) days of the delivery of such written
          request by the Initiating Holders, give written notice of such request to all
          Holders, and subject to the limitations of this Section 2, use its reasonable
          best efforts to effect, as promptly as reasonably possible, the registration
          under the Securities Act of the Registrable Securities specified in the
          Initiating Holders request, together with the Registrable Securities of
          any Holder(s) joining in such request as are specified in a written request
          received by the Company within the above 30-day period (the Shelf
          Registration Statement). The Company shall use its reasonable efforts
          to cause the Shelf Registration Statement to be declared effective under the
          Securities Act within 3 months after the Holders initial request in
          accordance with this Section and to keep such Shelf Registration Statement
          continuously effective under the Securities Act until the earlier of (i) two
          years following the date such registration was declared effective and (ii) the
          disposition of all Registrable Securities included in such Shelf Registration
          Statement.

2.2.        Request
for Subsequent Registration. Subject to the conditions of this           Section 2,
at any time after the second anniversary of the date on which the           Shelf
Registration Statement is declared effective, if the Company shall receive           a
written request from the Initiating Holders that the Company file a
          registration statement on Form F-3 registering the resale by the Holders
thereof           of Registrable Securities constituting at least 30% of the Original
Registrable           Securities, then the Company shall, within thirty (30) days of the
delivery of           such written request by the Initiating Holders, give written notice
of such           request to all Holders, and subject to the limitations of this Section
2, use           its reasonable best efforts to effect, as promptly as reasonably
possible, the           registration under the Securities Act of the Registrable
Securities specified in           the Initiating Holders request, together with the
Registrable Securities           of any Holder(s) joining in such request as are
specified in a written request           received by the Company within the above 30-day
period (the Demand           Registration Statement). The Company
shall use its reasonable efforts           to cause the Demand Registration Statement to
be declared effective under the           Securities Act within 3 months after the Holders initial
request in           accordance with this Section.

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2.3.        Underwritten
Offering. If the Initiating Holders intend to           distribute the
Registrable Securities covered by their request by means of an           underwriting
then the Initiating Holders shall inform the Company in writing of           their
intention to do so and the intended plan of distribution and such           information
shall be included in the written notice referred to in Sections 2.1           and 2.2.
Distribution of the Registrable Securities by means of an underwriting           pursuant
to the Shelf Registration Statement shall be subject to the           Companys
consent, which shall not be unreasonably withheld.           Notwithstanding any other
provision of this Section 2, if the offering is done           by means of an
underwriting and the underwriter advises the Company that           marketing factors
require a limitation of the number of Registrable Securities           to be underwritten
then the Company shall so advise all Holders of Registrable           Securities which
would otherwise be underwritten pursuant hereto, and the number           of shares that
may be included in the underwriting shall be allocated to the           Holders of such
Registrable Securities so requesting to be registered on a pro           rata basis,
based on the number of Registrable Securities then held by all such           Holders.
Any Registrable Securities excluded or withdrawn from such underwriting           shall
be withdrawn from the registration.

2.4.        Suspension.

| | 2.4.1.        In
addition to any suspension rights under subsection 2.4.2 below, upon the
          happening of any pending corporate development, public filing with the SEC or
          similar event, that, in the judgment of the Companys Board, renders it
          advisable to suspend the use of the Prospectus or upon the request by an
          underwriter in connection with an underwritten public offering of the
          Companys securities, the Company may, suspend use of the Prospectus, on
          written notice to each Holder (which notice will not be required to disclose
the           content of any material non-public information and will indicate the date
of the           beginning and end of the intended period of suspension, if known), in
which case           each Holder shall discontinue disposition of Registrable Securities
covered by           the registration statement or Prospectus until copies of a
supplemented or           amended Prospectus are distributed to the Holders or until the
Holders are           advised in writing by the Company that sales of Registrable
Securities under the           applicable Prospectus may be resumed and have received
copies of any additional           or supplemental filings that are incorporated or
deemed incorporated by           reference in any such Prospectus. The suspension and
notice thereof described in           this Section 2.4.1 shall be held by each Holder in
strictest confidence and           shall not be disclosed by such Holder.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.4.2.        In
the event of: (i) any request by the SEC or any other federal or state
          governmental authority for amendments or supplements to a registration
statement           or related prospectus or for additional information, (ii) the
issuance by the           SEC or any other federal or state governmental authority of any
stop order           suspending the effectiveness of a registration statement or the
initiation of           any proceedings for that purpose, (iii) the receipt by the
Company of any           notification with respect to the suspension of the qualification
or exemption           from qualification of any of the Registrable Securities for sale
in any           jurisdiction or the initiation of any proceeding for such purpose, or
(iv) any           event or circumstance which necessitates the making of any changes in
the           registration statement or Prospectus, or any document incorporated or
deemed to           be incorporated therein by reference, so that, in the case of the
registration           statement, it will not contain any untrue statement of a material
fact or any           omission to state a material fact required to be stated therein or
necessary to           make the statements therein not misleading, and that in the case
of the           Prospectus, it will not contain any untrue statement of a material fact
or any           omission to state a material fact required to be stated therein or
necessary to           make the statements therein, in the light of the circumstances
under which they           were made, not misleading, then the Company shall deliver a
certificate in           writing to the Holders (the Suspension Notice)
to the effect           of the foregoing (which notice will not be required to disclose
the content of           any material non-public information and will indicate the date
of the beginning           and end of the intended period of suspension, if known), and,
upon receipt of           such Suspension Notice, the Holders will discontinue
disposition of Registrable           Securities covered by the registration statement or
Prospectus (a Suspension) until the Holders receipt of copies of
a           supplemented or amended Prospectus prepared and filed by the Company, or
until           the Holders are advised in writing by the Company that the current
Prospectus           may be used, and have received copies of any additional or
supplemental filings           that are incorporated or deemed incorporated by reference
in any such           prospectus. In the event of any Suspension, the Company will use
its           commercially reasonable efforts to cause the use of the Prospectus so
suspended           to be resumed as soon as possible after delivery of a Suspension
Notice to the           Holders. The Suspension and Suspension Notice described in this
Section 2.4.1           shall be held by each Holder in strictest confidence and shall
not be disclosed           by such Holder.
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2.5.        Exclusions.
The Company shall not be required to effect a registration           pursuant to this
Section 2 (without limiting any other provisions of this           Section 2 to that
effect):

| | 2.5.1.        After
the Company has effected one (1) Shelf Registration Statement, and such
          registration has been declared or ordered effective (except that in such case
          the Company may still be required to effect one (1) Demand Registration
          Statement);
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| | 2.5.2.        After
the Company has effected one (1) Demand Registration Statement, and such
          registration has been declared or ordered effective;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.5.3.        If
Form F-3 is not available for such offering by the Holders,
| | ----------------------------------------------------------------------------

| | 2.5.4.        During
the period starting with the date of filing of, and ending on the date           one
hundred eighty (180) days following the effective date of a registration
          statement pertaining to the Companys securities (but other than
          registration relating solely to employee benefit plans on Form S-8 or similar
          forms that may be promulgated in the future, or a registration relating solely
          to SEC Rule 145 transaction on Form F-4 or similar forms that may be
promulgated           in the future);
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| | 2.5.5.        If
within ten (10) days of receipt of a written request from Initiating Holders
          pursuant to Section 2.1, the Company gives notice to the Initiating Holders of
          the Companys good faith intention to file a registration statement for a
          public offering for a sale of the Companys shares for its own account
          within sixty (60) days, provided that the Company actually files such
          registration statement within such sixty (60) days and makes reasonable good
          faith efforts to cause such registration statement to become effective;
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| | 2.5.6.        For
a Holder if a registration statement filed pursuant to Section 3 herein is           then
effective and is available to such Holder for the resale of Registrable
          Securities; or
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| | 2.5.7.        If
the Company shall furnish to Holders requesting a registration statement
          pursuant to this Section 2, an officers a certificate signed by order of
          the Board stating that in the good faith judgment of the Board, (i) such
          registration may interfere with or affect the negotiation or completion of any
          material transaction or other material event that is being contemplated by the
          Company (whether or not final decision has been made to undertake such
          transaction at the time the right to delay is exercised), (ii) such
registration           involves initial or continuing disclosure obligations that impose
on the Company           a significant burden to which it would not otherwise be subject
in the absence           of such registration, or (iii) it would be otherwise seriously
detrimental to           the Company and its shareholders for such registration statement
to be effected           at such time, and in each of the events described in (i), and
(iii) the Company           shall have the right to defer such filing for a period of not
more than ninety           (90) days after such officers certificate; provided that
such right to           delay a request shall be exercised by the Company not more than
twice in any           twelve (12) month period.
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3.    
          PIGGYBACK REGISTRATIONS.

3.1.        Notice
of Registration. The Company shall notify all Holders of           Registrable
Securities in writing at least twenty (20) days prior to the filing           of any
registration statement under the Securities Act for purposes of an           offering of
securities of the Company (including, but not limited to,           registration
statements relating to the initial offering or secondary offerings           of
securities of the Company, but other than registration relating solely to
          employee benefit plans on Form S-8 or similar forms that may be promulgated in
          the future, or a registration relating solely to a SEC Rule 145 transaction on
          Form F-4 or similar forms that may be promulgated in the future) and will
afford           each such Holder requesting to be included in such registration, in
accordance           with this Section 3.1, an opportunity to include in such
registration statement           all or part of such Registrable Securities held by such
Holder. Each Holder           desiring to include in any such registration statement all
or any part of the           Registrable Securities held by it shall, within fourteen
(14) days after           delivery of the above-described notice by the Company, so
notify the Company in           writing specifying the number of Registrable Shares
requested to be included. If           a Holder decides not to include all of its
Registrable Securities in any           registration statement thereafter filed by the
Company, such Holder shall           nevertheless continue to have the right to include
any Registrable Securities in           any subsequent registration statement or
registration statements as may be filed           by the Company with respect to
offerings of its securities, all upon the terms           and conditions set forth
herein.

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3.2.        Underwritten
Offering.

| | 3.2.1.        If
the registration statement under which the Company gives notice under this
          Section 3 is for an underwritten offering, the Company shall so advise the
          Holders of Registrable Securities as part of its notice made pursuant to
Section           3.1. In such event, the right of any such Holder to be included in a
          registration pursuant to this Section 3 shall be conditioned upon such
          Holders participation in such underwriting and the inclusion of such
          Holders Registrable Securities in the underwriting to the extent provided
          herein. All Holders proposing to distribute their Registrable Securities
through           such underwriting shall enter into the underwriting agreement agreed
upon           between the Company and the underwriter or underwriters selected for such
          underwriting by the Company. If any Holder disapproves of the terms of such
          underwriting agreement, such Holder may elect to withdraw therefrom by written
          notice to the Company and the underwriter, delivered no later than five (5)
days           after the date on which the material terms of such underwriting are agreed
upon           and made known to the Holder in writing, and in the event that such
withdrawal           notice was not timely provided, the Holder shall be required to
execute the           underwriting agreement in the form agreed between the Company and
the           underwriters.
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| | 3.2.2.        Notwithstanding
any other provision of this Agreement, if the underwriter           determines in good
faith that marketing factors require a limitation of the           number of shares
(including Registrable Securities) to be underwritten, the           number of shares
that may be included in the underwriting shall be reduced to           such amount
determined by the underwriters, to be allocated, first, to the           Company; second,
if any, to the Holders pro-rata, based on the total number of           Registrable
Securities then held by the Holders requesting to be included in           such
registration; and third, if any, to any shareholder of the Company (other           than
a Holder) pro-rata, based on the total number of shares then held by such
          shareholder requesting to be included in such registration. Any Registrable
          Securities excluded or withdrawn from such underwriting shall be excluded and
          withdrawn from the registration.
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3.3.        Right
to Terminate Registration. The Company shall have the right to           terminate or
withdraw any registration initiated by it under this Section 3           prior to the
effectiveness of such registration, whether or not any Holder has           elected to
include securities in such registration. The registration expenses of           such
withdrawn registration shall be borne by the Company.

4.    
          OBLIGATIONS OF THE COMPANY. Whenever required to effect the
          registration of any Registrable Securities, the Company shall, without
          limitation of any other provision herein, as expeditiously as reasonably
          possible:

4.1.        Prepare
and file with the SEC a registration statement with respect to such           Registrable
Securities and use its commercially reasonable best efforts to cause           such
registration statement to become effective, and keep such registration
          statement effective until the earlier of (i) 180 days following the date such
          registration was declared effective and (ii) the disposition of all Registrable
          Securities included in such registration statement. In case of a registration
          statement pursuant to Section2, such registration statement shall include a
plan           of distribution in customary form.

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4.2.        Prepare
and file with the SEC such amendments and supplements to such           registration
statement and the prospectus used in connection with such           registration
statement as may be necessary to comply with the provisions of the           Securities
Act with respect to the disposition of all securities covered by such
          registration statement.

4.3.        Furnish
to the Holders such number of copies of a prospectus, including a           preliminary
prospectus, in conformity with the requirements of the Securities           Act, and such
other documents as they may reasonably request in order to           facilitate the
public sale or other disposition of the Registrable Securities           covered by such
registration statement.

4.4.        Use
its reasonable efforts to register and qualify the securities covered by           such
registration statement under such other securities or Blue Sky laws of such
          jurisdictions as shall be reasonably requested by the Holders; provided that
the           Company shall not be required in connection therewith or as a condition
thereto           to qualify to do business or to file a general consent to service of
process in           any such states or jurisdictions.

4.5.        Use
commercially reasonable efforts to list the Registrable Securities covered           by
such registration statement with any securities exchange or quotation system           on
which the Ordinary Shares of the Company are then listed or quoted.

4.6.        Provide
a transfer agent and registrar for all such Registrable Securities not           later
than the effective date of such registration statement.

4.7.        In
the event of any underwritten public offering, enter into and perform its
          obligations under an underwriting agreement, in usual and customary form, with
          the managing underwriter(s) of such offering, on terms to be agreed between the
          Company and such managing underwriter(s).

4.8.        Except
as otherwise provided under Section 2, immediately notify each seller of
          Registrable Securities covered by such registration statement and each
          underwriter under such registration statement at any time when a prospectus
          relating thereto is required to be delivered under the Securities Act of 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. The Company shall prepare and furnish to each such
          seller a reasonable number of copies of a supplement to or an amendment of such
          prospectus as may be necessary so that, as thereafter delivered to the
          purchasers of such Registrable Securities, such prospectus shall not include
any           untrue statement of a material fact or omit 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.

4.9.        Use
its reasonable efforts to furnish, on the date that such Registrable           Securities
are delivered to the underwriters for sale, if such securities are           being sold
through underwriters, (i) an opinion, dated as of such date, of the           counsel
representing the Company addressed to the underwriters for the purposes           of such
registration, in form and substance as is customarily given to           underwriters in
an underwritten public offering, and (ii) a letter, dated as of           such date, from
the independent certified public accountants of the Company,           addressed to the
underwriters and to such seller, in form and substance as is           customarily given
by independent certified public accountants in an underwritten           public offering;

4.10.        In
connection with the preparation and filing of each registration statement
          registering Registrable Securities under the Securities Act, and before filing
          any such registration statement or any other document in connection therewith,
          give the participating Holders of Registrable Securities and their
underwriters,           if any, the opportunity to review any such registration
statement, each           prospectus included therein or filed with the SEC, each
amendment thereof or           supplement thereto and any related underwriting agreement,
or other document to           be filed.

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4.11.        Otherwise
use commercially reasonable efforts to comply with the Securities Act,           the
Exchange Act and any other applicable rules and regulations of the SEC, and
          make available to the Holders, as soon as reasonably practicable, an earnings
          statement covering the period of at least 12 months after the effective date of
          such registration statement, which earnings statement shall satisfy Section
          11(a) of the Securities Act and any applicable regulations thereunder,
including           Rule 158.

5.    
          EXPENSES OF REGISTRATION. All expenses incurred in connection with
          any registration, qualification or compliance sought pursuant to Section 2
          herein shall be borne and paid by the Holders participating in such
          registration, whether or not such registration is eventually completed, declared
          effective or withdrawn, which expenses shall be allocated among them pro rata to
          the number of Registrable Securities sought to be registered by each such
          Holder. All expenses incurred in connection with any registration, qualification
          or compliance sought pursuant to Section 3 herein and in connection with a
          registration under Section 2 in which the the Company includes securities to be
          sold for the account of the Company, shall be borne and paid by the Company and
          the Holders which expenses shall be allocated among them pro rata to the number
          of securities registered by each of them, except that any expenses incurred by
          advisors to the Holders, including legal advisors, shall be borne and paid
          solely by the Holders retaining them. Expenses shall include all expenses
          incurred by the Company or incident to the Companys performance of or
          compliance with this Agreement, including, without limitation, expenses incurred
          in connection with the preparation of a prospectus, printing, registration and
          filing fees, printing fees and expenses, fees and disbursements of counsel,
          accountants and other advisors for the Company, taxes, fees and expenses
          (including reasonable counsel fees) incurred in connection with complying with
          state securities or blue sky laws, fees of the National Association
          for Securities Dealers, Inc., fees of transfer agents or registrars and the
          expense of any special audits incident to or required by any such registration.
          Notwithstanding the foregoing, however, all underwriters discounts and
          commissions in respect of the sale of Registrable Securities shall be paid by
          the Holders, pro rata in accordance with the number of Registrable
          Securities sold in the offering. With respect to any expense described in this
          Section 5 which is required to be borne by a Holder, each Holder shall make
          payment within 30 days of receipt of payment instructions from the Company,
          accompanied by the relevant invoices or similar documentation. During the course
          of preparation of a registration for which expenses are to be borne by the
          Holders, a Holder who is a representative nominated by the Holders participating
          in the registration may request at reasonable intervals information from the
          Company with respect to the amount of expenses incurred until such time. In a
          registration in which the Holders are required to bear more than 75% of the
          expenses, the Company shall consult with the foregoing representative of the
          Holders in advance, with respect to any expense in an amount of more than
          $40,000.

6.    
          AGREEMENT TO FURNISH INFORMATION; PRECONDITIONS TO PARTICIPATION IN
          CERTAIN UNDERWRITTEN REGISTRATIONS.

6.1.        Each
Holder of Registrable Securities shall furnish to the Company such relevant
          information regarding such Holder and the distribution proposed by such Holder
          as the Company may reasonably request in writing and as shall be reasonably
          required in connection with any registration, qualification or compliance
          referred to in this Agreement.

6.2.        If
a registration pursuant to Section 2 is to be effected by means of an
          underwritten offering, the identity of the underwriter shall be proposed by the
          Initiating Holders, subject to the consent of the Company which shall not be
          unreasonably withheld, and in such event, the right of any Holder to include
its           Registrable Securities in such registration shall be conditioned upon such
          Holders participation in such underwriting and the inclusion of such
          Holders Registrable Securities in the underwriting to the extent provided
          herein.

6.3.        No
Holder of Registrable Securities may participate in any underwritten
          registration under Section 2 unless such Holder (i) agrees to enter into a
          written underwriting agreement with the managing underwriter selected in the
          manner herein provided in such form and containing such provisions as are
          customary in the securities business for such an arrangement between such
          underwriter and companies of the Companys size and investment stature,
and           (ii) provides any relevant information and completes and executes all
          questionnaires, powers of attorney, indemnities, underwriting agreements, and
          other documents required under the terms of such underwriting arrangements.

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7.    
          INDEMNIFICATION. In the event any Registrable Securities are
          included in a registration statement under Sections 2 or 3:

7.1.        To
the extent permitted by law, the Company will indemnify and hold harmless           each
Holder, its affiliates, the partners, officers, directors and shareholders           of
each Holder and each person, if any, who controls such Holder within the
          meaning of the Securities Act or the Exchange Act, against any losses, claims,
          damages, or liabilities to which they are finally determined to be subject
under           the Securities Act, the Exchange Act or other federal or state law,
insofar as           such losses, claims, damages or liabilities arise out of or are
based upon any           of the following statements, omissions or violations
(collectively a           Violation) by the Company: (i) any untrue
statement of a           material fact contained in such registration statement,
including any           preliminary prospectus or final prospectus contained therein or
any amendments           or supplements thereto, (ii) the omission to state therein a
material fact           required to be stated therein, or necessary to make the
statements therein not           misleading, or (iii) any violation by the Company of the
Securities Act, the           Exchange Act, any state securities law or any rule or
regulation promulgated           under the Securities Act, the Exchange Act or any state
securities law in           connection with the offering covered by such registration
statement; and the           Company will reimburse each such Holder, its affiliates,
partners, officers, or           directors and each person, if any, who controls such
Holder within the meaning           of the Securities Act or the Exchange Act, for any
legal or other expenses           reasonably incurred by them in connection with
investigating or defending any           such loss, claim, damage, liability or action,
if it is judicially determined           that there was such a Violation; provided
however, that the indemnity agreement           contained in this Section 7.1 shall not
apply to amounts paid in settlement of           any such loss, claim, damage, liability
or action if such settlement is effected           without the consent of the Company,
nor shall the Company be liable in any such           case for any such loss, claim,
damage, liability or action to the extent that it           arises out of or is based
upon a Violation which occurs in reliance upon and in           conformity with
information furnished for use in connection with such           registration by such
Holder, partner, officer, director or controlling person of           such Holder.

7.2.        To
the extent permitted by law, each Holder will, if Registrable Securities held
          by such Holder are included in the securities as to which such registration
          qualifications or compliance is being effected, indemnify and hold harmless the
          Company, each of its directors, its officers, directors and each person, if
any,           who controls the Company within the meaning of the Securities Act and any
other           Holder selling securities under such registration statement or any of
such other           Holders its affiliates, partners, directors officers or any
person who           controls such Holder within the meaning of the Securities Act or the
Exchange           Act, against any losses, claims, damages or liabilities to which the
Company or           any such director, officer, controlling person, or other such Holder
or           controlling person of such other Holder is finally determined to be subject
          under the Securities Act, the Exchange Act or other federal or state law,
          insofar as such losses, claims, damages or liabilities arise out of or are
based           upon any Violation, in each case to the extent that such Violation occurs
in           reliance upon and in conformity with information furnished by such Holder
for           use in connection with such registration; and each such Holder will
reimburse           any legal or other expenses reasonably incurred by the Company or any
such           director, officer, controlling person, or other Holder, or partner,
officer,           director or controlling person of such other Holder in connection with
          investigating or defending any such loss, claim, damage, liability or action if
          it is judicially determined that there was such a Violation; provided, however,
          that the indemnity agreement contained in this Section 7.2 shall not apply to
          amounts paid in settlement of any such loss, claim, damage, liability or action
          if such settlement is effected without the consent of the Holder, which consent
          shall not be unreasonably withheld.

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7.3.        Promptly
after receipt by an indemnified party under this Section 7 of notice of           the
commencement of any action (including any governmental action), such
          indemnified party will, if a claim in respect thereof is to be made against any
          indemnifying party under this Section 7, deliver to the indemnifying party a
          written notice of the commencement thereof and the indemnifying party shall
have           the right to participate in, and, to the extent the indemnifying party so
          desires, jointly with any other indemnifying party similarly noticed, to assume
          the defense thereof; provided, however, that an indemnified party shall have
the           right to retain its own counsel, with the fees and expenses to be paid by
the           indemnifying party, if representation of such indemnified party by the
counsel           retained by the indemnifying party would be inappropriate due to actual
or           potential differing interests between such indemnified party and any other
party           represented by such counsel in such proceeding. The failure to deliver
written           notice to the indemnifying party within a reasonable time of the
commencement of           any such action, shall, to the extent materially prejudicial to
its ability to           defend such action, relieve such indemnifying party of its
liability to the           indemnified party under this Section 7.

7.4.        If
the indemnification provided for in this Section 7 is held by a court of
          competent jurisdiction to be unavailable to an indemnified party with respect
to           any losses, claims, damages or liabilities referred to herein, the
indemnifying           party, in lieu of indemnifying such indemnified party thereunder,
shall to the           extent permitted by applicable law contribute to the amount paid
or payable by           such indemnified party as a result of such loss, claim, damage or
liability in           such proportion as is appropriate to reflect the relative fault of
the           indemnifying party on the one hand and of the indemnified party on the
other in           connection with the Violation(s) that resulted in such loss, claim,
damage or           liability, as well as any other relevant equitable considerations.
The relative           fault of the indemnifying party and of the indemnified party shall
be determined           by a court of law by reference to, among other things, whether
the untrue or           alleged untrue statement of a material fact or the omission to
state a material           fact relates to information supplied by the indemnifying party
or by the           indemnified party and the parties relative intent, knowledge,
access to           information and opportunity to correct or prevent such statement or
omission;           provided, that no party will be liable for contribution with respect
to the           settlement of any claim or action effected without its written consent.

7.5.        Notwithstanding
the foregoing, to the extent that the provisions on           indemnification and
contribution contained in any underwriting agreement entered           into in connection
with an underwritten public offering are in conflict with the           foregoing
provisions, the provisions in such underwriting agreement shall           prevail.

8.    
          LOCK-UP AGREEMENT.

8.1.        Each
Holder hereby agrees that, if so requested by the representative of the
          underwriters in any underwritten offering of the Company, including any
offering           effected under Section 2 hereof (the Managing Underwriter),
          such Holder shall not, without the prior consent of the Managing
          Underwriter (i) lend, offer, pledge, sell, contract to sell, sell any
          option or contract to purchase, purchase any option or contract to sell, grant
          any option, right or warrant to purchase, or otherwise transfer or dispose of,
          directly or indirectly, any Registrable Securities or any securities of the
          Company (whether such shares or any such securities are then owned by the
          Holder, or are thereafter acquired), or (ii) enter into any swap or other
          arrangement that transfers to another, in whole or in part, any of the economic
          consequences of ownership of the Registrable Securities, whether any such
          transaction described in clause (i) or (ii) above is to be settled by delivery
          of Registrable Securities or such other securities, in cash or otherwise,
during           the period specified by the Managing Underwriter (the Market
Standoff           Period), with such period not to exceed 90 days following
the           effective date of such registration statement.

8.2.        The
Company may impose stop-transfer instructions with respect to securities
          subject to the foregoing restrictions until the end of such Market Standoff
          Period.

8.3.        The
foregoing provisions of this Section  7 shall not apply to the sale of           any
shares to an underwriter pursuant to an underwriting agreement, and shall           only
be applicable to the Holder if all officers and directors of the Company           enter
into similar agreements.

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8.4.        The
underwriters in connection with a registration statement so filed are           intended
to be third party beneficiaries of this Section  7 and shall have           the
right, power and authority to enforce the provisions hereof as though they           were
a party hereto.

9.    
          ASSIGNMENT OF REGISTRATION RIGHTS; TRANSFER OF REGISTRABLE SECURITIES.

The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned by the Holders
to any one or more transferees or assignees that acquire in one transaction at least 75%
of the Original Registrable Securities held by the Holders; provided, however that
simultaneously with such transfer, (i) the transferors shall furnish to the Company
written notice of the name and address of such transferee(s) or assignee(s) and the
securities with respect to which such registration rights are being assigned, and (ii)
such transferee(s) shall agree in writing, on a form to be agreed upon with the Company,
to be subject to all provisions and restrictions set forth in this Agreement.

10.    RULE
144 REPORTING. With a view to making available to the Holders           the
benefits of certain rules and regulations of the SEC which may permit the           sale
of the Registrable Securities to the public without registration, the           Company
(at any time after it has become subject to such reporting requirements)           agrees
to:

10.1.       Make
and keep available adequate current public information with respect to the
          Company, within the meaning Rule 144(c) under the Securities Act or any similar
          or analogous rule promulgated under the Securities Act, at all times after the
          effective date of the first registrationstatement filed by the Company
          for an offering of its securities to the general public.

10.2.       Furnish
to such Holder forthwith upon request a written statement by the Company           as to
its compliance with the informational requirements of Rule 144(c) under           the
Securities Act (or similar rule then in effect), and of the Exchange Act (at
          any time after it has become subject to such reporting requirements); and

10.3.       Comply
with all other necessary filings and other requirements so as to enable           the
holders of Registrable Securities to sell Registrable Securities under Rule           144
under the Securities Act (or similar rule then in effect).

|11. | MISCELLANEOUS.
|--- | --------------

11.1.       Expenses.
The Holders shall bear and pay, on a pro rata basis among them,           all the
expenses incurred by each of the Company and the Holders in connection           with the
negotiation, approval, authorization and execution of this Agreement,
          including, without limitation all expenses incurred by the Company in
connection           with the shareholder approval to be sought for the authorization of
this           Agreement. This section 11.1 shall be in full force and effect whether or
not           this Agreement is eventually approved and authorized by the shareholders
meeting           of the Company.

11.2.        Entire
Agreement. This Agreement constitute the full and           entire
understanding and agreement between the parties with regard to the           subject
matters hereof and supersede and replaces all prior negotiations,           agreements
and understandings of the parties of any nature, whether oral or           written,
relating thereto, and any such previous agreement or understanding           shall
terminate and be of no further force and effect.

11.3.       Amendment;
Termination. Any provision of this Agreement may be amended           and the
observance thereof may be waived (either generally or in a particular           instance
and either retroactively or prospectively), with the written consent of           the
Company and Holders who own a majority of the Registrable Securities then           held
by the Holders, and any such amendment shall be binding upon all Holders.           This
Agreement shall terminate and shall have no further force and effect upon           the
earlier of (i) five years after the date hereof, or (ii) such time that the
          outstanding Registrable Securities constitute less than 10% of the
          Companys issued and outstanding share capital.

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11.4.       Governing
Law; Venue. This Agreement shall be governed by and construed           under the
laws of the State of Israel, without regard to the conflicts of law           principles
of such State, except with respect to matters that are subject to           securities
laws and regulations, which shall be governed by the respective laws           and
regulations. The parties hereto irrevocably submit to the exclusive
          jurisdiction of the Courts of the district of Tel Aviv-Jaffa in respect of any
          dispute or matter arising out of or connected with this Agreement.

11.5.       Successors
and Assigns. The provisions hereof shall inure to the benefit           of, and be
binding upon, the successors, permitted assigns, heirs, executors,           and
administrators of the parties hereto.

11.6.       Severability.
In the event one or more of the provisions of this           Agreement should, for any
reason, be held to be invalid, illegal or           unenforceable in any respect, such
invalidity, illegality, or unenforceability           shall not affect any other
provisions of this Agreement, and this Agreement           shall be construed as if such
invalid, illegal or unenforceable provision had           never been contained herein.

11.7.       Delays
or Omissions. It is agreed that no delay or omission to exercise           any right,
power, or remedy accruing to any Holder, upon any breach, default or
          noncompliance of the Company under this Agreement shall impair any such right,
          power, or remedy, nor shall it be construed to be a waiver of any such breach,
          default or noncompliance, or any acquiescence therein, or of any similar
breach,           default or noncompliance thereafter occurring. It is further agreed
that any           waiver, permit, consent, or approval of any kind or character on any
          Holders part of any breach, default or noncompliance under the Agreement
          or any waiver on such Holders part of any provisions or conditions of
this           Agreement must be in writing and shall be effective only to the extent
          specifically set forth in such writing. All remedies, either under this
          Agreement, by law, or otherwise afforded to Holders, shall be cumulative and
not           alternative.

11.8.       Notices.
All notices required or permitted hereunder shall be in writing           and shall be
deemed effectively given: (i) upon personal delivery to the party           to be
notified, (ii) when sent by confirmed electronic mail or facsimile if sent
          during normal business hours of the recipient; if not, then on the next
business           day, (iii) three (3) days after having been sent by registered or
certified           mail, return receipt requested, postage prepaid, or (iv) two (2) days
after           deposit with an internationally recognized courier, specifying two day
delivery,           with written verification of receipt. All communications shall be
sent to the           party to be notified at the address as set forth below or at such
other address           as such party may designate by ten (10) days advance written
notice to the other           parties hereto.

11.9.       If
to the Company: to the address set forth in the preamble to this Agreement.

11.10.       If
to a Holder: to the address set forth in Schedule 1 attached hereto.

11.11.       Counterparts.
This Agreement may be executed in one or more counterparts,           all of which shall
be considered one and the same agreement and shall become           effective when one or
more counterparts have been signed by each of the parties           and delivered to the
other party, it being understood that all parties need not           sign the same
counterpart and that signatures may be provided by facsimile           transmission.

11.12.       Questionnaire.
Each Holder agrees to furnish to the Company a completed           Questionnaire in a
customary form (a Selling Holder           Questionnaire). The Company
shall not be required to include the           Registrable Securities of a Holder in a
Registration Statement who fails to           furnish to the Company a fully completed
Selling Holder Questionnaire at least           five business days prior to the date the
Company notifies such Holder that a           registration statement is being filed.

 Signature page follows 

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IN
WITNESS WHEREOF, the parties have duly signed this Registration Rights Agreement
as of the Effective Date.

THE COMPANY:

_____________________________________________________

|       |                                      
|------ | -------------------------------------
|       | ECTEL LTD.                           
|Name:  | _____________________________________
|      
|Title: | _____________________________________

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IN
WITNESS WHEREOF, the parties have duly signed this Registration Rights Agreement
as of the Effective Date.

THE HOLDERS:

KOOR INDUSTRIES LTD.

_____________________________________________________

|       |                                      
|------ | -------------------------------------
|       |                                      
|Name:  | _____________________________________
|      
|Title: | _____________________________________

CLAL ELECTRONICS INDUSTRIES LTD.

_____________________________________________________

|       |                                      
|------ | -------------------------------------
|       |                                      
|Name:  | _____________________________________
|      
|Title: | _____________________________________

IDB DEVELOPMENT CORPORATION LTD.

_____________________________________________________

|       |                                      
|------ | -------------------------------------
|       |                                      
|Name:  | _____________________________________
|      
|Title: | _____________________________________

BADAL SECURITIES LTD.

_____________________________________________________

|       |                                      
|------ | -------------------------------------
|       |                                      
|Name:  | _____________________________________
|      
|Title: | _____________________________________

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# Schedule 1

# Schedule of Holders

|                                 |                                                                      
|-------------------------------- | ---------------------------------------------------------------------
|KOOR INDUSTRIES LTD.            
|                                
|Address:                         | 3 Azrieli Center, Triangle Tower, 43rd Floor, Tel-Aviv 67023, Israel 
|Telephone No:                    | +972-3-607-5107                                                      
|Facsimile No.:                   | +972-3-607-5110                                                      
|                                
|CLAL ELECTRONICS INDUSTRIES LTD.
|                                
|Address:                         | 3 Azrieli Center, Triangular Tower 45th Floor, Tel-Aviv 67023, Israel
|Telephone No:                    | +972-3-607-5794                                                      
|Facsimile No.:                   | +972-3-607-5131                                                      
|                                
|IDB DEVELOPMENT CORPORATION LTD.
|                                
|Address:                         | 3 Azrieli Center, Triangle Tower, 44th Floor, Tel-Aviv 67023, Israel 
|Telephone No:                    | +972-3-607-5666                                                      
|Facsimile No.:                   | +972-3-607-5667                                                      
|                                
|BADAL SECURITIES LTD.           
|                                
|Address:                         | 3 Azrieli Center, Triangle Tower, 44th Floor, Tel-Aviv 67023, Israel 
|Telephone No:                    | +972-3-607-5666                                                      
|Facsimile No.:                   | +972-3-607-5667                                                      

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