EXHIBIT 10.5


                AGREEMENT FOR THE RENDITION OF FACTORING SERVICES

                      EXECUTED ON JULY 8, 2003 IN TEL AVIV



Between
INVESTEC BANK (ISRAEL) LTD.                                   ("FACTOR")

And
ELTEK LTD.                                                    ("CLIENT")1


WHEREAS   Factor engages in the rendition of Factoring Services to clients, as
          specified in this agreement; and

WHEREAS   Client is interested in receiving Factoring Services from Factor,
          pursuant to the terms and conditions of this agreement;


     THEREFORE, THE PARTIES HAVE AGREED, STIPULATED AND DECLARED AS FOLLOWS:

1. DEFINITIONS

     1.1 "RECEIVABLE" means all sums due to Client from an Account Debtor, for
     merchandise sold or services rendered, plus interest and expenses relating
     to said sums, with the exception of:

          1.1.1 Sums due for sales that are based on non-standby documentary
          letters of credit;

          1.1.2 Sums due for transactions of cash against delivery of title or
          shipping documents, or any other delivery against cash;

          1.1.3 Sums due to Client from an Account Debtor in which Client holds
          means of control or which holds means of control in Client, either
          directly or indirectly. In this section, "means of control" shall mean
          the holding of 25% of the share capital, the right to appoint a
          director, the right to receive a dividend on shares as aforesaid or to
          direct the acts of the Account Debtor or the Client, as the case may
          be.

     1.2 "APPROVED RECEIVABLE" means a Receivable for which Client shall have
     submitted an application for a factoring line, which application shall have
     been approved by Factor, within the limits and pursuant to the terms and
     conditions of such approval (ANNEX A hereto), and subject to the following
     provisions:

1 Translator's note: Literally, `Factor' is referred to in the original Hebrew
text as `Bank', and `Client' as `Supplier'. The terms `Factor' and `Client' used
in the translation have been chosen due to their higher incidence in American
factoring agreements.

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          1.2.1 The Receivable shall be within the Factoring Line Ceiling
          approved by Factor.

          1.2.2 The Factoring Line shall not have been terminated in accordance
          with the terms of this agreement.

          1.2.3 Factor's consent to the assignment of the rights under the
          Invoice for the Receivable shall not have been withdrawn pursuant to
          the terms of this agreement.

          1.2.4 Account Debtor shall have no Defenses, as defined below, against
          Client.

          1.2.5 Client shall have committed no fundamental breach of this
          agreement.

          1.2.6 The Receivable shall have been created due to a shipment made or
          a service rendered after the date of filing of the application for
          approval of a factoring line.

          1.2.7 The Underlying Transaction agreement shall contain no provision
          barring the institution of legal proceedings and the receipt of a
          judgment or arbitration award.

     1.3 "ACCOUNT DEBTOR" means the buyer of merchandise or services from
     Client, who is named in the application for approval of a factoring line
     that is approved by Factor.

     1.4 "INVOICE" means an invoice issued by Client to Account Debtor pursuant
     to the Underlying Transaction.

     1.5 "DEFENSE" means any right, demand or claim due to a Receivable,
     including setoffs, liens or counterclaims, arising from any cause, and any
     claim relating to the quality of the product or service or the manner of
     performance of the Underlying Transaction by Client.

     1.6 "DATE OF COMMENCEMENT OF THE DISPUTE" means the date on which Factor,
     Indemnifier or Client learns of the existence of a Dispute, whichever is
     earlier.

     1.7 "INSURER" means the insurer under an insurance policy issued in
     connection with the Underlying Transaction or the Factoring Services.

     1.8 "DISPUTE" means Account Debtor's refusal to pay Receivable due to a
     Defense.

     1.9 "INDEMNIFIER" means an Import Factor or an Insurer.

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     1.10 "UNDERLYING TRANSACTION" means a transaction between the Client and an
     Account Debtor for the sale of merchandise or the rendition of services.

     1.11 "IMPORT FACTOR" means an entity providing Factoring Services and
     assuming an undertaking to pay the sum of the Receivable to Factor for the
     shipping of merchandise or the rendition of services to or at the country
     in which it is located or another country.

     1.12 "FACTORING LINE" means a framework for the provision of Factoring
     Services to Client for Underlying Transactions, as approved by Factor.

     1.13 "RATE OF RETENTION" means the rate determined in the Factoring Line
     Terms and Conditions as that portion of an approved Invoice for which no
     advances shall be paid by Factor.

     1.14 "FACTORING SERVICES" means the provision of a Factoring Line, the
     provision of an undertaking to pay an Approved Receivable, the monitoring
     of customer Receivables and handling the collection thereof, all subject to
     the terms and conditions of this agreement.

     1.15 "FACTORING LINE TERMS AND CONDITIONS" means the terms and conditions
     under which Factor approved the Factoring Line.

     1.16 "FACTORING LINE CEILING" means the sum of the Factoring Line, as
     approved by Factor.

     1.17 "PAYMENT PURSUANT TO THE UNDERTAKING" means a payment made or required
     to be made by Factor, pursuant to its undertaking in Sections 22 and 26
     hereof.

     1.18 "ADVANCE FEE" means the sum to be deducted from each Invoice as the
     consideration due to Factor for advances paid thereby on Approved
     Receivables.

2. UNDERTAKING TO ASSIGN RIGHTS

     Unless revoked in accordance with the provisions of this agreement, Client
     undertakes to irrevocably assign to Factor, in an absolute assignment by
     way of a sale,2 pursuant to the Obligations Assignment Law, 5729-1969, all
     sums due thereto from an Account Debtor by virtue of any Receivable, in
     full, regardless of whether the Receivable shall or shall not have been
     approved, all in accordance with the terms and conditions of this
     agreement, and the terms and conditions of the Assignment of Right and
     Notice of Furnishing of Trade Invoices, ANNEX B hereto.

2 Translator's note: Although the original punctuation mark at this point in the
text is a period, a comma was most probably intended in its place.

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     It is clarified that the absolute assignment by way of a sale of Client's
     right to sums due and to be due thereto from an Account Debtor, is
     performed solely due to the fact that Factor undertakes to pay Client,
     pursuant to the terms of this agreement, the sum of the assigned
     Receivable, if the Account Debtor defaults thereon. Therefore, the payment
     of an advance on account of such Receivable and the calculation of the
     Advance Fee shall neither add to, nor derogate from nor modify any of
     Factor's and Client's rights and liabilities with respect to such
     assignment.

3. ADDITIONAL ASSIGNMENT

     Factor shall be entitled, at the discretion thereof, to further assign a
     right under any Receivable to any third party, according to Factor's
     choice, including to an Indemnifier (an "ADDITIONAL ASSIGNMENT"), all under
     the terms and conditions of this agreement.

4. SUBMISSION OF AN APPLICATION FOR A FACTORING LINE AND APPROVAL THEREOF BY
FACTOR

     4.1 Client may submit an application to Factor to approve a Factoring Line
     in connection with a certain Account Debtor.

     4.2 Factor shall have absolute discretion on whether to approve the
     Factoring Line application, in whole or in part, and/or to condition the
     approval upon reasonable conditions.

     4.3 If approved by Factor, the terms and conditions of the Factoring Line,
     as approved, shall become an integral part of this agreement.

5. DEVIATION FROM FACTORING LINE CEILING

     5.1 If Client shall exceed the Factoring Line Ceiling, Factor shall be
     entitled to terminate the Factoring Line with advance notice of 45-60 days.

     5.2 If Client shall exceed the Factoring Line Ceiling, the amount of the
     deviation shall be deemed an unapproved Receivable.

     5.3 If part of the sum of any Invoice furnished to Factor shall be within
     the Factoring Line Ceiling and the other part in excess thereof, and so
     long as such Invoice is not fully contained within the ceiling framework,
     then the portion exceeding the Factoring Line Ceiling shall be deemed an
     unapproved Receivable.

     5.4 If Factor is furnished with several Invoices relating to a single
     Factoring Line, the order of inclusion thereof in the Factoring Line shall
     be in accordance with the payment due date of each Invoice.

     5.5 If Factor shall have received several Invoices together, only part of
     the aggregate sum of which lies within the framework of the Factoring Line
     Ceiling, then Factor shall be authorized to determine, at the discretion
     thereof, which of the Invoices shall be deemed as Invoices for Approved
     Receivables, and which for unapproved Receivables.

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     5.6 In the event of termination of the line, Factor shall first make
     payment on account of Receivables approved at the time of termination, and
     only thereafter, subject to the collection thereof by Factor, on account of
     unapproved Receivables.

6. TERMINATION OR REDUCTION OF FACTORING LINE CEILING

     6.1 Factor shall be entitled to terminate or reduce a Factoring Line
     Ceiling at the discretion thereof, by giving notice to Client at least 90
     days in advance.

     6.2 In the event that Factor shall have decided to reduce the Factoring
     Line, and shall have notified Client thereof, Client shall be deemed to
     have consented to the Factoring Line Terms and Conditions, as modified by
     Factor, if it shall have deposited additional Invoices with Factor for the
     receipt of Factoring Services therefor after the notice is given.

     6.3 Factor shall be entitled to terminate or reduce a Factoring Line,
     immediately after giving prompt notice in writing, while giving concurrent
     notice in writing, verbally or by telephone, if an Indemnifier shall
     terminate or reduce the factoring line maintained thereby for an Account
     Debtor or if Client, Factor or Indemnifier shall receive information on the
     condition of an Account Debtor or Client having a material adverse effect,
     according to Factor's or Indemnifier's reasonable discretion, on their
     ability to pay their debts.

     6.4 Nothing in this section shall derogate from any other remedy available
     to Factor pursuant to any law or agreement, including the possibility
     available to Factor to terminate the agreement.

7. FURNISHING OF INVOICES TO FACTOR

     Upon issuance of an Invoice for a Receivable, Client undertakes to furnish
     a copy thereof to Factor, together with an "Assignment of Right and Notice
     on the Furnishing of an Invoice", in the form attached hereto as ANNEX B.

8. CLIENT'S UNDERTAKINGS IN CONNECTION WITH THE ASSIGNMENT OF A RIGHT PURSUANT
TO AN INVOICE

     Client undertakes that:

     8.1 Any Invoice for a Receivable to be issued to an Account Debtor, shall
     correspond to the Underlying Transaction in accordance with the Factoring
     Line Terms and Conditions, as approved by Factor.

     8.2 Any right to any Receivable pursuant to an Invoice assigned to Factor
     under this agreement shall be due to Client, at the time of performance of
     any assignment, for an existing Underlying Transaction performed thereby in
     its ordinary course of business, in good faith and in full conformity with
     the terms and conditions of the Underlying Transaction.

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     8.3 In the event that the Underlying Transaction which is the subject of
     the right assigned to Factor shall be a sale of merchandise, the sale shall
     be complete and perfected, and not conditional.

     8.4 Client shall be entitled to the full sum of any Invoice issued to an
     Account Debtor, a copy of which shall be furnished to Factor. Without
     derogating from the generality of the aforesaid:

          8.4.1 The amount due under the Invoice shall be after deduction of any
          down payments made by Account Debtor to Client.

          8.4.2 To Client's best knowledge, neither Account Debtor nor any third
          party shall, at the time of assignment of the Receivable, have any
          Defense against the Receivable which is the subject matter of the
          Invoice.

     8.5 Any right due to any Receivable assigned to Factor by Client pursuant
     to this agreement, shall be assignable under any law or agreement.

     8.6 There shall be no lawful or contractual impediment to Factor's
     assignment of any right due to any Receivable, in an Additional Assignment
     to any third party, including an Indemnifier.

     8.7 Factor is relying upon Client's undertakings in its consent to provide
     Factoring Services pursuant to this agreement.

9. MODIFICATION, WAIVER OR COMPROMISE

     After the furnishing of any Invoice to Factor, Client shall neither modify
     nor agree to any modification of the Underlying Transaction, nor to any
     waiver or compromise, without Factor's prior written consent.

10. NOTICE OF REDUCED PAYMENT, RETURNS OR CLAIMS RAISED BY ACCOUNT DEBTOR

     Client undertakes to notify Factor promptly of any return of merchandise by
     Account Debtor or any claim raised by Account Debtor in connection with the
     Receivable.

11. NO RIGHT TO ASSIGN

     Should it transpire that Client shall not have been entitled to assign the
     right to Factor and/or that Factor is not entitled to assign the right to a
     third party, including an Indemnifier, then the Receivable shall be deemed
     never to have been approved.

12. PAYMENT DUE DATE UNDER INVOICE

     12.1 Subject to the provisions of this section, the payment due date of
     each Invoice shall correspond to the terms of payment stated in the
     Factoring Line Terms and Conditions approved for such Account Debtor (the
     "Original Period").

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     12.2 Client may request Factor, in advance, that the period for payment of
     a certain Invoice be different than the Original Period.

     12.3 Factor shall have absolute discretion as to whether to grant the
     request. If the request is approved, the additional period shall not exceed
     twice the Original Period, or another 45 days, whichever is shorter.

     12.4 In the event that Factor shall have granted Client's request, and
     Client shall have fulfilled all of the other undertakings thereof in
     connection with the Receivable, pursuant to this agreement, including its
     undertakings with respect to the Factoring Line Ceiling, then the
     Receivable underlying the said Invoice shall be deemed an Approved
     Receivable.

13. FURNISHING OF RELEVANT INFORMATION

     Client shall furnish to Factor, of its own initiative, at any time,
     including on the date of performance of an assignment, any Information in
     its possession on the condition of its business, on the Underlying
     Transaction and the performance thereof by the parties and on the condition
     of Account Debtor's business.

     In this section, "Information" means any information which, if in Factor's
     possession, would have had a material effect on Factor's decision in
     connection with the approval of a Factoring Line, the acceptance of an
     Invoice, or the terms and conditions thereof, or merchandise stoppage,
     collection or handling of the Receivable. Information as provided in this
     agreement shall not include any public information.

14. FURNISHING OF INFORMATION AND DOCUMENTS ON DEMAND

     Client undertakes to furnish to Factor, on the demand thereof, any
     information or document in its possession and required by Factor, including
     information or documents relating to the existence of a Receivable, the
     existence of the Underlying Transaction, or the shipping of merchandise
     (including furnishing a copy of the bill of lading).

15. CLIENT'S UNDERTAKING TO STOP MERCHANDISE

     15.1 At any time prior to the rendition of a service or the delivery of
     merchandise to an Account Debtor, Factor shall be entitled to order Client
     to do anything in its power to prevent the rendition of the service, to
     delay the delivery of the merchandise or to prevent the arrival thereof at
     the Account Debtor's, if one of the following shall have occurred:

          15.1.1 Indemnifier shall have terminated the factoring line maintained
          thereby for the Account Debtor;

          15.1.2 Client, Factor or Indemnifier shall have received information
          on the merchandise or the service, the Client or the Account Debtor,
          which, had it been in the possession of Factor and/or Indemnifier
          prior to the assignment of the right to Factor and/or Indemnifier,
          would have caused them to decline the Invoice, or could have caused
          Factor to withdraw its consent to render Factoring Services for the
          Receivable.

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     15.2 In the event that Client shall have failed to act as provided in
     Section 15.1 [sic] or Section 15.1.2, then all Invoices pertaining to the
     said shipments shall be deemed as unapproved Receivables, and Factor shall
     be entitled, by written notice to Client, to terminate the Factoring Line
     relating to the said Account Debtor.

16. NOTICE TO ACCOUNT DEBTOR AND PAYMENT DEMAND

     16.1 Client undertakes to notify Account Debtor of its engagement with
     Factor in a factoring agreement, pursuant to which it shall be assigning
     Account Debtor's Receivable to Factor or Indemnifier.

     16.2 Client undertakes that any Invoice and payment demand pertaining to a
     Receivable and any copy thereof, to be issued thereby to Account Debtor,
     shall include a notice to Account Debtor with regard to the assignment of
     the Receivable to Factor or to Import Factor, in the form to be delivered
     to Client by Factor, and an irrevocable order to pay the sum of the
     Receivable to Factor or to Import Factor, in the form to be delivered to
     Client by Factor.

17. COLLATERAL RECEIVED BY CLIENT

     17.1 Bills of Exchange - Client undertakes to act as follows in any event
     in which a note, drawn by Account Debtor to Client, shall have been
     provided to secure any Receivable:

          17.1.1 The payee under the note shall be Factor or Client.

          17.1.2 If Client shall have been named as payee on the note, Client
          shall endorse the note to Factor in such a manner that Factor shall be
          deemed a holder in due course of the note.

          17.1.3 Client shall act to have Account Debtor apply an acceptance
          signature to the note, and shall notify Factor of the date of
          performance of the acceptance by Account Debtor.

          17.1.4 In the event that a violation notice or a notice of dishonored
          note shall be required, Client undertakes to perform such act in a
          timely manner and so as to preserve all rights under the note.

          17.1.5 Client shall take all reasonable measures to ensure that all
          signatures on the note are duly applied.

     17.2 OTHER COLLATERAL - Insofar as such act shall not constitute a breach
     of other undertakings of Client, Client undertakes to transfer and/or
     assign to Factor any collateral in its possession or which shall be in its
     possession in the future for any Receivable, and to take any measure
     necessary to validate such transfer and/or assignment.

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     17.3 In the event that Client shall have collected a Receivable through the
     realization of collateral, it shall not be entitled to receive the sum of
     such Receivable from Factor, and shall be obligated to return any sum
     received on account of such Receivable to Factor.

18. FORWARDING OF PROCEEDS

     Client undertakes:

     18.1 To forward to Factor any sum, check, note or other means of payment
     received thereby from an Account Debtor for a Receivable.

     18.2 That any sum, check, note or other means of payment received by Client
     as aforesaid shall, pending delivery thereof to Factor, be deemed to be
     held by Client in trust for Factor.

     18.3 That Client shall have no title, possession, lien, setoff or claim due
     to such proceeds.

     18.4 The aforesaid notwithstanding, Factor may, at the discretion thereof,
     consent, by written notice to be delivered to Client, that a certain
     payment remain in Client's hands.

19. NOTICE OF OTHER TRANSACTIONS

     Client undertakes to notify Factor of any transaction to be performed
     thereby with an Account Debtor, which is not included in the definition of
     Receivable under this agreement.

20. CLAIMS

     Client undertakes to assist Factor, as reasonably required, in enforcing
     claims entertained by Factor against an Account Debtor.

21. NO CONFLICTING AGREEMENTS

     21.1 So long as this agreement is in effect, or so long as any sums shall
     be due to Factor from Client and/or Account Debtor, Client undertakes to
     assign no Receivable to others.

     21.2 Client undertakes not to discount [already pledged] [sic] other notes
     and negotiable instruments received thereby from an Account Debtor due to
     any Receivable, but to forward the same to Factor.

22. FACTOR'S UNDERTAKINGS IN CONNECTION WITH APPROVED RECEIVABLES

     Subject to the provisions of this agreement, Factor undertakes to:

     22.1 Monitor the status of Receivables assigned thereto for Client.

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     22.2 Handle the collection of Receivables assigned thereto under this
     agreement, according to Factor's standard practices in connection with
     receivables assigned thereto pursuant to factoring agreements.

     22.3 Pay the sum of any Invoice issued for an Approved Receivable and not
     paid by Account Debtor, in accordance with Section 26.

23. FACTOR'S AND INDEMNIFIER'S POWERS REGARDING COLLECTION OF RECEIVABLES

     23.1 Factor or Import Factor, and if needed Insurer, shall be entitled to
     demand that the original documents conferring title to merchandise and the
     insurance documents be delivered through them.

     23.2 For the purpose of collection, Factor shall be entitled to act through
     a third party.

     23.3 Factor and Indemnifier shall have discretion in determining and
     conducting Receivable collection proceedings, including the institution of
     legal or other action and with respect to the manner of conduct thereof;
     provided, however, that if the collected Receivable is not an Approved
     Receivable, Client shall be joined in the decision-making and in the
     conduct of proceedings as aforesaid. In the event that Factor shall have
     taken no action to collect an unapproved Receivable within 90 days from its
     payment due date, the assignment with respect to such Receivable shall be
     revoked, notice thereof shall be given to Account Debtor, and the right to
     collect the Receivable shall be returned to Client.

     23.4 Without derogating from the generality of the aforesaid, Factor and/or
     Indemnifier shall be entitled to reach a settlement or arrangement with
     Account Debtor, including with regard to the collection of expenses or
     fees; provided, however, that Client's prior written consent shall be
     required for settlements or arrangements concerning an unapproved
     Receivable.

24. REIMBURSEMENT OF EXPENSES

     24.1 If obligated to pay an Approved Receivable, Factor shall bear the
     expenses of collecting the same.

     24.2 The aforesaid notwithstanding, Client shall bear any reasonable
     expense relating to the collection of Receivables which Factor is not
     obligated to pay, if not paid by Account Debtor, including expenses
     deriving from the performance of the collection through a third party or
     the Indemnifier, provided that the provisions of Section 23.3 shall have
     been fulfilled.

     24.3 Client undertakes to pay any such expenses per Factor's demand.

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25. TRANSFER OF SUMS RECEIVED UPON COLLECTION

     25.1 Factor undertakes to credit Client for sums identical to those
     actually collected by Factor from Account Debtors, immediately after
     collection thereof, by virtue of the assignments of rights under this
     agreement, on Invoices deposited therewith, less any sums due to Factor
     from Client.

     25.2 In the event that Factor shall have transferred to Client a sum
     received thereby from Import Factor, which relates to a payment order or
     negotiable instrument delivered by Account Debtor, which payment order or
     negotiable instrument shall subsequently turn out not to have been honored,
     Client shall return such sum to Factor upon the first demand thereof.

26. PAYMENT OF THE SUM OF AN INVOICE FOR AN APPROVED RECEIVABLE

     In connection with an Invoice relating to an Approved Receivable, that is
     deposited with Factor, Factor undertakes as follows:

     26.1 If an Account Debtor shall default on a Receivable relating to an
     approved Invoice3, Factor shall pay Client a sum equal to the rate of
     Factor's undertaking from the sum of any such Invoice under the Factoring
     Line Terms and Conditions, in the currency stated therein, without interest
     or differences of indexation, less the sums specified in Section 32
     hereunder.

     26.2 If Indemnifier is an Import Factor, or in the absence of an
     Indemnifier, payment under this section shall be made no later than 3
     business days, in Israel and in Import Factor's country, after the 90th day
     following the payment due date under the Invoice.

     26.3 If Indemnifier is an Insurer, payment shall be made no later than 3
     business days, in Israel and in such Insurer's country, after the day fixed
     for the indemnification of Factor by Insurer pursuant to the insurance
     policy.

     26.4 In the event that Factor shall have paid Client pursuant to the
     undertaking, and that a Dispute shall have arisen after payment is made,
     Client shall return to Factor, at its first demand, any amount paid thereto
     pursuant to the undertaking, plus interest at the rate of the Advance Fee
     under the Factoring Line Terms and Conditions, to be calculated from the
     date of payment of any such sum by Factor to Client, until the date of
     actual repayment.

3 Translator's note: This sentence should probably have read "If an Account
Debtor shall default on an INVOICE RELATING TO AN APPROVED RECEIVABLE...".

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27.  ADVANCES ON APPROVED RECEIVABLES

     Factor and Client agree that the Factoring Services shall include the
     payment of advances on Approved Receivables, subject to the following terms
     and conditions:

     27.1 Advances shall be made only on fully Approved Receivables.

     27.2 The advance shall be a fixed percentage of the sum of any Invoice, in
     accordance with the Factoring Line Terms and Conditions.

     27.3 The Advance Fee, at the rate fixed in the Factoring Line Terms and
     Conditions, shall be deducted from the sum of any advance and paid to
     Factor, as follows:

          27.3.1 On the date of payment of the advance by Factor to Client, the
          estimated sum of the Advance Fee shall be deducted from the advance,
          i.e., calculated in accordance with the payment period fixed on the
          Invoice.

          27.3.2 If Account Debtor shall have paid the Invoice prior to the date
          fixed thereon, Factor shall credit Client the rate fixed for the
          Advance Fee in accordance with the number of prepayment days, and
          shall charge Client the same rate if Account Debtor shall have paid
          the Invoice after the date fixed thereon, in accordance with the
          number of days which shall have elapsed from the Payment Due Date
          fixed on the Invoice until the date of actual payment.

          27.3.3 In the event that Account Debtor shall have defaulted on the
          Invoice and Factor shall have an obligation to pay pursuant to the
          undertaking, the Advance Fee shall be calculated from the date fixed
          on the Invoice until the date of payment by Factor.

28. DISPUTE

     If Account Debtor shall refuse to pay an Approved Receivable due to a
     Defense raised against the Receivable, such Receivable shall be deemed
     never to have been an Approved Receivable, and the following provisions
     shall apply:

     If the Receivable shall have been assigned to an Import Factor:

     28.1 Client shall take all measures necessary to settle the Dispute as
     quickly as possible.

     28.2 If the Dispute shall not have been settled, Client shall institute the
     legal proceeding necessary to collect the Receivable within 90 days from
     the Date of Commencement of the Dispute.

     28.3 Client shall update Factor, on a full and ongoing basis, on the status
     of the proceedings or the negotiations to settle the Dispute.

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     28.4 The aforesaid notwithstanding, Factor shall be entitled, subject to
     the provisions of Section 23.3, to take action of its own to settle the
     Dispute, including instituting legal action.

     28.5 In the event that Client shall have fulfilled its undertakings, and
     one of the following events shall have occurred, Factor shall pay Client
     the sum of the Receivable according to its undertaking:

          28.5.1 The Dispute shall have been settled by way of a compromise
          without a judicial ruling, within 180 days from the date of
          commencement, and notice of the settlement shall have been furnished
          to Factor, provided that Account Debtor shall have undertaken, within
          the framework of the settlement, to make payment no later than 30 days
          after the date of the settlement.

          28.5.2 A judgment shall have been issued in favor of Client by a
          competent court or another competent judicial tribunal, including by
          way of arbitration, within 3 years from the Date of Commencement of
          the Dispute, provided that all of the following shall have occurred:

               (a) The legal proceeding shall have been opened by the lawful
               service of process or demand for arbitration before the lapse of
               180 days from the Date of Commencement of the Dispute.

               (b) The judgment shall have been furnished to Factor, and the
               date of payment fixed therein shall be no later than 30 days
               after the date of issuance of the judgment.

     28.6 If the Dispute shall have been settled within 75 days from the payment
     due date of the Invoice which is the subject matter of the Dispute,
     Factor's liability to pay Client the sum of the Disputed Receivable shall
     be as fixed in Section 26 above.

     28.7 If the Dispute shall have been settled more than 75 days after the
     payment due date fixed in the Invoice, Factor shall pay Client the sum of
     the Receivable within 15 business days from the date of furnishing thereto
     of a judgment or notice on the settlement of the Dispute by way of a
     compromise.

     28.8 If the Dispute shall not have been settled within the aforementioned
     time frames, Factor shall be exempt from its liability for Payment Pursuant
     to the Undertaking.

     If the Receivable shall have been assigned to an Insurer: Factor and Client
     shall act in accordance with the provisions of the insurance policy,
     provided that it is not inconsistent with the provisions of this agreement.

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29. UNAPPROVED RECEIVABLES

     29.1 If Factor shall have been furnished an Invoice, the Receivable under
     which is unapproved, and so long as it remains unapproved, Factor shall
     have no liability to Client to pay such Receivable.

     29.2 The aforesaid notwithstanding, the Receivable shall be deemed to have
     been assigned to Factor, which shall be entitled to act to collect the
     same, at its discretion and subject to the provisions of Section 23.3.

     29.3 In the event that Factor shall have actually collected any sums due to
     any Receivable deemed an unapproved Receivable under this agreement, Factor
     shall have the rights of lien and setoff with respect thereto.

30. ARREARS INTEREST

     In the event that Client shall have been required by Factor to pay Factor
     any sum in accordance with this agreement, and such sum shall not have been
     paid (or offset, or another collateral shall have been given to Factor's
     satisfaction) within 15 days from the date of demand, the debt shall bear
     interest at the maximum rate charged by Factor on unapproved debit balances
     in checking accounts maintained in the currency of the demand, from the
     date of the demand.

     This section shall not derogate from another right available to Factor
     under this agreement or by law.

31. LIEN AND SETOFF

     31.1 Factor may offset an amount due thereto from Client against any sum
     due to Client from Factor pursuant to the terms and condition of this
     agreement.

     31.2 The said setoff right shall apply also to collateral and to the
     proceeds from the realization thereof.

     31.3 So long as Client has an indebtedness to Factor, Factor may retain any
     sum, asset or collateral held thereby.

32. DEDUCTIONS

     It is agreed that any sum due to Factor from Client at the time being,
     shall be deducted from any sum credited to Client pursuant to the
     provisions of this agreement, following an actual collection, or as an
     advance, as follows:

     32.1 Factoring fees.

     32.2 Advance Fee.

     32.3 Rate of Retention.

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<PAGE>

     32.4 Principal of and interest on any indebtedness of Client to Factor.

     32.5 Payment deriving from taxes or levies involved in the performance of
     this agreement, insofar as required by law.

     32.6 An amount paid by Factor to Client as an advance or pursuant to
     Factor's undertaking, the underlying Receivable of which turns out to be
     unapproved.

     32.7 An amount included in a credit notice issued by Client to Account
     Debtor.

     32.8 Any other sum due to Factor from Client.

     32.9 Conversion and transfer fees, banking expenses and expenses, all in
     accordance with this agreement.

33. CALCULATION OF THE BALANCE FOR WITHDRAWAL

     Factor shall calculate the balance available to Client.

     X = A - (A * b%) - C - D

     While:

     X = The balance for withdrawal

     A = The aggregate sum of Invoices for Approved Receivables (i.e., the
         aggregate sum of Invoices furnished to and accepted by Factor, less the
         aggregate sum of Invoices for unapproved Receivables, as of the date of
         calculation)

     b = The Retention Rate

     C = The aggregate sum of Invoices for Receivables in Dispute paid by Factor
         to Client

     D = Amounts paid to Client in the past and not yet collected by Factor

34. COLLATERAL

     34.1 If Client and Factor shall agree upon the provision of collateral,
     Client undertakes to furnish the same so long as Client has any
     indebtedness to Factor.

     34.2 The collateral shall be free of any security interest, attachment or
     other third party right. Client shall be entitled to give no security
     interest in the collateral to others, other than with rights subordinate to
     those of Factor.

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<PAGE>

     34.3 REGISTRATION OF SECURITY INTERESTS

          34.3.1 Client shall act to register a security interest in any
          collateral in the appropriate registry; provided, however, that Factor
          shall be entitled to act by itself to have the security interest
          registered.

          34.3.2 Client shall sign any document required to validate the
          security interest in any collateral.

          34.3.3 Client shall bear the expenses involved in the registration,
          handling and realization of collateral.

35. EXPIRATION OF THE AGREEMENT

     Each party shall be entitled to terminate this agreement by giving notice
     to the other at least 90 days in advance (the "NOTICE PERIOD").

     It is clarified that:

     35.1 The parties' rights and obligations under this agreement shall remain
     in effect from the date of the notice throughout the Notice Period, with
     the exception of Client's obligation to continue assigning any and all
     Receivables to Factor.

     35.2 Upon expiration of the Notice Period, the parties' rights and
     obligations shall remain in effect with respect to any Receivable approved
     prior to the date of expiration, and with respect to any right and
     obligation deriving from the period prior thereto.

     35.3 Upon expiration or termination of the agreement for any reason, the
     parties shall notify Account Debtors of the revocation of the assignment
     with respect to Receivables created after the termination.

36. TERMINATION OF THE AGREEMENT

     The parties hereby determine that, due to the nature and quality of this
     contract, the provisions of Sections 2, 3, 5, 6, 8, 9, 10, 11, 12, 13, 14,
     16, 18, 20, 21, 22, 25, 26, 28, 29, 30, 31, 32, 34 and 39 of this contract,
     including the subsections thereof, shall be deemed fundamental provisions,
     the failure to fulfill or the breach of which shall be deemed a fundamental
     breach.

     36.1 Without derogating from the parties' lawful rights, Factor may
     terminate this agreement with immediate effect in each of the following
     cases:

          36.1.1 If, in Factor's opinion, there is substantial fear for Client's
          ability to perform its undertakings under this agreement, or the
          ability thereof to perform its undertakings to an Account Debtor.

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<PAGE>

          36.1.2 If proceedings shall have been instituted against Client for
          the attachment of a material asset thereof, receivership, dissolution
          or bankruptcy, or a composition with creditors.

          36.1.3 If Client shall have ceased its business operations, or
          materially reduced the same outside the ordinary course of business.

37. FACTOR'S LIABILITY

     Factor and Client shall not be liable for any loss or damage incurred by
     the other party due to FORCE MAJEURE or events beyond their control,
     including riots, strikes, acts of war, or the acts of a governmental, local
     or other authority, in Israel and overseas.

38. FACTOR'S RECORDS

     Factor's records in connection with the Factoring Services, any Receivable,
     the parties' undertakings under this agreement and the manner of
     performance thereof, shall constitute PRIMA FACIE evidence of the veracity
     of the content thereof.

39. REVIEW OF DEBITS, CREDITS AND DOCUMENTS BY CLIENT

     39.1 Factor undertakes to furnish to Client its records in connection with
     the rendition of the Factoring Services, including records on debits and
     credits.

     39.2 Client undertakes to review Factor's records as issued thereto, and
     any other document sent thereto by Factor, and to notify Factor in writing,
     within 90 days, of any reservation about the content thereof.

40. RECEIVABLES IN FOREIGN CURRENCY

     40.1 Any indebtedness of Client to Factor in a foreign currency shall be
     paid in the same currency.

41. DATABASES

     In accordance with the Privacy Protection Law, 5741-1981, Client agrees and
     declares that:

     41.1 It is subject to no lawful duty to deliver to Factor details necessary
     for the performance of this agreement (in this section: "Information"). The
     delivery of the Information is dependent upon Client's wishes and consent.

     41.2 The Information shall be stored, according to Factor's needs, in
     databases of Factor or of another on its behalf, or of anyone rendering to
     Factor computer and data processing services, or any other service
     essential to the rendition of the Factoring Services, including the
     Indemnifier.

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<PAGE>

     41.3 The Information shall be used by Factor, for the purpose of rendering
     the Factoring Services, as customary in its current work and at its
     discretion.

     41.4 Client consents to the delivery of the Information to a person acting
     in the name or on behalf of Factor in the performance of this agreement,
     and to a third party to whom a right under this agreement shall have been
     assigned, including the Indemnifier.

42. Anything stated above in the masculine form shall be deemed to have been
stated also in the feminine form.

43. The headings in this agreement are inserted for the purpose of convenience
and reference only.



          IN WITNESS WHEREOF, THE PARTIES HAVE HERETO SET THEIR HANDS


    [ stamp and signature of                    [ stamp and signature of
 Investec Bank (Israel) Ltd. ]                        Eltek Ltd. ]
   __________________________                  __________________________

          FACTOR                                          CLIENT




                                  CERTIFICATION

I, the undersigned, _________________, Adv., do hereby certify that this
agreement was signed by Messrs. __________________ and _________________, who
are authorized to sign on its behalf and to bind it with its signature [sic].
Minutes of the company's board of directors and of the board of directors'
approval pursuant to Section 282 of the Companies Law, 57394-1999 are attached
hereto.



________________________
ATTORNEY

4 Sic - should be 5759.

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