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                                                                     Exhibit 4.2

                              AMENDED AND RESTATED
                          SHAREHOLDERS RIGHTS AGREEMENT

                             dated February 8, 2000

                                  by and among

                                DEALTIME.COM LTD.

                                       and

                           CERTAIN OF ITS SHAREHOLDERS
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                                TABLE OF CONTENTS


1.    DEFINITIONS; REPRESENTATIONS; EFFECT OF AGREEMENT.........................


2.    INCIDENTAL REGISTRATION...................................................


3.    DEMAND REGISTRATION.......................................................


4.    DESIGNATION OF UNDERWRITER................................................


5.    EXPENSES..................................................................


6.    INDEMNIFICATION AND CONTRIBUTION..........................................


7.    OBLIGATIONS OF THE COMPANY................................................


8.    CONDITIONS TO REGISTRATION OBLIGATIONS....................................


9.    ASSIGNMENT OF REGISTRATION RIGHTS.........................................


10.   LOCK-UP AND OTHER REQUIREMENTS OF THE HOLDERS.............................


11.   RULE 144..................................................................


12.   OTHER REGISTRATION RIGHTS; TERM...........................................


13.   AFFIRMATIVE COVENANTS.....................................................


14.   NEGATIVE COVENANTS........................................................


15.   BOARD OF DIRECTORS........................................................


16.   PRE-EMPTIVE RIGHT.........................................................


17.   FOUNDER SALES.............................................................


18.   RIGHT OF FIRST REFUSAL....................................................


19.   INVESTOR TAG-ALONG RIGHTS.................................................


20.   BRING-ALONG...............................................................
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21.   INTENTIONALLY DELETED.....................................................


22.   AMENDMENT.................................................................


23.   MISCELLANEOUS.............................................................
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                          SHAREHOLDERS RIGHTS AGREEMENT


THIS AGREEMENT (this "AGREEMENT") made as of the 8th day of February, 2000, by
and among

DEALTIME.COM LTD., a company organized under the laws of the State of Israel,
registered under number 51-246003-1, with offices at 6 Hatzoren Street, Netanya,
Israel (the "COMPANY"); and

NAHUM SHARFMAN, Israel I.D. 005567110 ("SHARFMAN") and AMIR ASHKENAZI, Israel
I.D. 027757806 ("ASHKENAZI") (Sharfman and Ashkenazi are each referred to as a
"FOUNDER" and are collectively referred to as the "FOUNDERS"); and

M.L. TRUST COMPANY LTD. , a company organized under the laws of the State of
Israel ("ML"); and

ISRAEL SEED II L.P., a limited partnership organized under the laws of Jersey,
by its general partner, Seed Venture Partners Limited, a company organized under
the laws of the British Virgin Islands, with offices at Lord Coutanche House,
66-68 Esplanade, St. Helier, Jersey JE4 8SZ, Channel Islands ("ISLP"); and

UNICYCLE TRADING COMPANY, L.P., a limited partnership organized under the laws
of the State of Nevada ("UNICYCLE"); and

ODEON CAPITAL PARTNERS, L.P., a limited partnership organized under the laws of
the State of Delaware ("ODEON"); and

NOMURA INTERNATIONAL PLC, a company registered under the laws of England and
Wales ("NOMURA"); and

HOLDERS OF THE COMPANY'S PREFERRED D SHARES (as defined below) purchased
pursuant to the Subscription Agreement by and between the Company and each such
Purchaser dated February 8, 2000 (the "Series D Investors")

THE COMPANIES, INDIVIDUALS AND/OR ENTITIES IDENTIFIED IN SCHEDULE A attached
hereto .

                                   WITNESSETH:

WHEREAS, concurrently with the execution of this Agreement, the Company and
certain Investors (as defined therein) shall enter into a Subscription Agreement
(the "SA"), according to which such Investors shall purchase Preferred D Shares
of the Company; and

WHEREAS, in connection with the execution of the SA and the investment in the
Company contemplated therein, the parties desire to amend the existing
Shareholders' Rights Agreement,
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dated August 23, 1999, as amended by Amendment No. 1, dated December 16, 1999 to
(the "EXISTING SRA"), by replacing the Existing SRA with this Agreement (the
"SRA").

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:


1.       DEFINITIONS; REPRESENTATIONS; EFFECT OF AGREEMENT.


         1.1.     Definitions. As used herein, the following terms have the
                  following meanings:


                  "Control" means direct or indirect ownership of more than 50%
                  of the equity or voting capital of an entity, or possession of
                  the right and power to direct the policy and management of
                  such entity.


                  "Form S-3" means Form S-3 or Form F-3 under the Securities
                  Act, as in effect on the date hereof or any registration form
                  under the Securities Act subsequently adopted by the
                  Securities and Exchange Commission (the "SEC") which permits
                  inclusion or incorporation of substantial information by
                  reference to other documents filed by the Company with the
                  SEC.


                  "Founder Registrable Shares" means all Ordinary Shares held by
                  the Founders and/or issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares the Founders may purchase pursuant to their
                  first refusal rights and preemptive rights.


                  "Holder" means any holder of outstanding Registrable Shares.


                  "Initiating Founders" means each of the Founders holding at
                  least 50% of the Founders Registrable Shares.


                  "Initiating Holders" means Investor Holders holding 20% of the
                  unregistered Investor Registrable Shares.


                  "IIF Investors" means Israel Infinity Venture Capital Fund
                  (Israel) LP, Israel Infinity Venture Capital Fund (Delaware)
                  LP, Israel Infinity Venture Capital Fund (Cayman I) LP and
                  Israel Infinity Venture Capital Fund (Cayman II) LP, and any
                  permitted transferee of any of the above.


                  "Investor" means a holder of either Preferred A Shares,
                  Preferred B Shares, Preferred C Shares or Preferred D Shares.


                  "Investor Holder" means any holder of outstanding Investor
                  Registrable Shares.


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                  "Investor Registrable Shares" shall mean the Series A Investor
                  Registrable Shares, the Series B Investor Registrable Shares,
                  the Series C Registrable Shares and the Series D Registrable
                  Shares, collectively.


                  "IPO" means the Company's initial underwritten public offering
                  of its Ordinary Shares pursuant to an effective registration
                  statement under the Securities Act or equivalent law of
                  another jurisdiction.


                  "Ordinary Registrable Shares" means all Ordinary Shares now
                  held by the Founders and the Ordinary Share Investors, all
                  Ordinary Shares issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares that the Founders or Ordinary Share Investors
                  may hereafter purchase or acquire pursuant to their preemptive
                  rights or rights of first refusal or otherwise.


                  "Qualified IPO" means an IPO (i) that raises net proceeds for
                  the Company of a minimum of $30 million and (ii) if effective
                  by December 31, 2000, in which the Ordinary Shares offered
                  thereby are offered at a price per share equal to 500% or more
                  of the then effective Conversion Price for the Preferred C
                  Shares under the Company's Articles of Association, or if
                  effective after January 1, 2001, the Ordinary Shares offered
                  thereby are offered at a price per share equal to 750% or more
                  of the then effective Conversion Price for the Preferred C
                  Shares under the Company's Articles of Association.


                  "Permitted Transferee" shall mean a person or entity which
                  receives shares pursuant to one of the following permitted
                  transfers:


                           (a) the transfer of all or any of the shares held by
                           the shareholder (the "TRANSFEROR") to: (i) a company
                           Controlled by the transferor; or (ii) a company that
                           Controls the transferor; or (iii) an entity under
                           common Control with the transferor (which for these
                           purposes shall be deemed to include any transfer to
                           any company under the Control of UBS AG (a "UBS Group
                           Company") and/or any transfer to any partnership or
                           unincorporated association under the Control of any
                           UBS Group Company which includes, without prejudice
                           to the generality of the foregoing, any limited
                           partnership the general partner of which is a UBS
                           Group Company), or (iv) in the case of a transfer by
                           a partnership (including a limited partnership) or
                           limited liability company, to any partners or members
                           thereof, or any partnership (including a limited
                           partnership) or limited liability company managed by
                           the same management company or to the partners or
                           members thereof; or (v) in the case of a body
                           corporate, to its shareholders in the same proportion
                           as their ownership interest in the body corporate; or
                           (vi) in the case of a trustee, to the beneficiary or
                           beneficiaries for whom the trustee is holding shares;
                           provided that such Permitted Transferee has agreed in


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                           writing to assume all obligations of the transferor
                           (in its capacity as a shareholder) under all
                           agreements involving the Company; and


                           (b) the transfer by a shareholder who is an
                           individual to his spouse, children, or grandchildren,
                           other than to minors and persons incapacitated as a
                           matter of law, and provided that such Permitted
                           Transferee has agreed in writing to assume all
                           obligations of the transferor (in its capacity as a
                           shareholder) under all agreements involving the
                           Company.


                  "Preferred A Shares" means Series A Preferred Shares of the
                  Company par value NIS 0.01 each.


                  "Preferred B Shares" means Series B Preferred Shares of the
                  Company par value NIS 0.01 each.


                  "Preferred C Shares" means Series C Preferred Shares of the
                  Company par value NIS 0.01 each.


                  "Preferred D Shares" means Series D Preferred Shares of the
                  Company par value NIS 0.01 each.


                  "Register", "registered" and "registration" refer to a
                  registration effected by filing a registration statement in
                  compliance with the Securities Act and the declation or
                  ordering by the SEC of effectiveness of such registration
                  statement, or the equivalent actions under the laws of another
                  jurisdiction.


                  "Registrable Shares" means all Investor Registrable Shares and
                  Ordinary Registrable Shares.


                  "Reserved Shares" means Ordinary Shares issuable upon
                  conversion of the Preferred Shares.


                  "Securities Act" means the United States Securities Act of
                  1933, as amended.


                  "Series A Investor Registrable Shares" means all Ordinary
                  Shares issuable upon conversion of the Preferred A Shares, all
                  Ordinary Shares issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares that the holders of Preferred A Shares may
                  hereafter purchase or acquire, pursuant to their preemptive
                  rights or rights of first refusal or otherwise, or Ordinary
                  Shares issued on conversion of such other securities.


                  "Series B Investor Registrable Shares" means all Ordinary
                  Shares issuable upon conversion of the Preferred B Shares, all
                  Ordinary Shares issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares that the holders of Preferred B Shares may
                  hereafter purchase or


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                  acquire, pursuant to their preemptive rights or rights of
                  first refusal or otherwise, or Ordinary Shares issued on
                  conversion of such other securities.


                  "Series C Investor Registrable Shares" means all Ordinary
                  Shares issuable upon conversion of the Preferred C Shares, all
                  Ordinary Shares issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares or other securities convertible into Ordinary
                  Shares, that the holders of Preferred C Shares may hereafter
                  purchase or acquire, pursuant to their preemptive rights,
                  rights of first refusal, warrants or otherwise, or Ordinary
                  Shares issued on conversion of such other securities.


                  "Series A and B Registrable Shares" means the Series A
                  Investor Registrable Shares and the Series B Investor
                  Registrable Shares, collectively.


                  "Series D Investor Registrable Shares" means all Ordinary
                  Shares issuable upon conversion of the Preferred D Shares, all
                  Ordinary Shares issued by the Company in respect of such
                  shares, including bonus shares and share dividends, and all
                  Ordinary Shares or other securities convertible into Ordinary
                  Shares, that the holders of Preferred D Shares may hereafter
                  purchase or acquire, pursuant to their preemptive rights,
                  rights of first refusal, warrants or otherwise, or Ordinary
                  Shares issued on conversion of such other securities.


         1.2.     Representations


                  The Company and each of Sharfman, Ashkenazi, ML, ISLP,
                  Unicycle, Odeon, Nomura and the Series D Investors hereby
                  acknowledge that the amendment and restatement of the SRA as
                  set forth hereunder shall be binding upon all Shareholders,
                  including such Shareholders who are not a party to this
                  Agreement and that upon execution of this Agreement, its terms
                  shall be binding upon the Company and each and all of the
                  Shareholders, as if such parties would have been parties
                  hereto.


         1.3.     Effect of Agreement


                  By executing this Agreement, the Existing SRA is hereby
                  amended and replaced by this SRA. The provisions of this SRA
                  shall binding upon the shareholders of the Company, provided
                  however, that nothing herein contained shall derogate form the
                  rights and obligations of the shareholders of the Company
                  under the Existing SRA, insofar as same relates to the period
                  prior to the date hereof.


2.       INCIDENTAL REGISTRATION.


         2.1.     If, at any time (i) the Company proposes to register any of
                  its securities (including in the event of the Company's IPO)
                  or (ii) the Company proposes to register any securities owned
                  by anyone other than the Investor Holders, other than (a) in a
                  registration under Section 3 of this Agreement or (b) a
                  registration on Form S-8 or Form F-4, the Company shall give
                  notice to the Holders of such


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                  intention, at least 45 days prior to the filing of the
                  registration statement in connection with such registration.
                  Upon the written request of any Holder given within twenty
                  (20) days after receipt of any such notice, the Company shall
                  include in such registration all of the Registrable Shares
                  indicated in such request(s) of the Investor Holders, so as to
                  permit the disposition of the shares so requested.


         2.2.     Notwithstanding any other provision of this Section 2, if the
                  managing underwriter advises the Company in writing that in
                  its opinion the number of securities requested to be included
                  in such registration exceeds the number that can be sold in
                  such offering without adversely affecting such underwriter's
                  ability to effect an orderly distribution of such securities,
                  the Company will include in such registration: (i) first, the
                  Company's Securities; (ii) second, the number of Investor
                  Registrable Shares requested to be included that, in the
                  opinion of such underwriters, can be sold, pro rata, among the
                  holders of such securities on the basis of the number of
                  Investor Registrable Shares requested to be included by such
                  holders in the registration; and (iii) third, the number of
                  Ordinary Registrable Shares requested to be included that, in
                  the opinion of such underwriters, can be sold, pro rata, among
                  the holders of such securities on the basis of the number of
                  Ordinary Registrable Shares requested to be included by such
                  holders in the registration; provided, however, that in any
                  event, all Investor Registrable Shares must be included in
                  such registration prior to the Ordinary Registrable Shares and
                  any other shares of the Company (with the exception of shares
                  to be issued by the Company to the public).


3.       DEMAND REGISTRATION.


         3.1.     At any time following 120 days after the closing of the
                  Company's IPO, the Initiating Holders may request in writing
                  that all or part of their Investor Registrable Shares shall be
                  registered under the Securities Act. Within 20 days after
                  receipt of any such request, the Company shall give written
                  notice of such request to the other Holders, and shall include
                  in such registration all Registrable Shares held by all such
                  Holders who wish to participate in such demand registration
                  and provide the Company with written requests for inclusion
                  therein within 20 days after the receipt of the Company's
                  notice. Thereafter, the Company shall effect the registration
                  of all Registrable Shares as to which it has received requests
                  for registration (a "DEMAND") and in connection with the first
                  Demand after the Company's IPO (the "FIRST DEMAND"), use its
                  best efforts to have such First Demand effective by the 61st
                  day after the Initiating Holders make such First Demand.
                  Notwithstanding the foregoing, the Company shall have the
                  right, exercisable by the 31st day after such First Demand, to
                  nullify such Demand in order to file a registration statement
                  for the registration of its equity securities for its own
                  account. Subject to the provisions of this Section 3.1, no
                  Demand shall be binding on the Company if the Company has
                  filed any


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                  registration statement for the registration of its equity
                  securities for its own account within the previous one hundred
                  and eighty (180) days (other than a form S-8 or similar
                  registration for employee shares) or, if not for the Company's
                  account, within the previous ninety (90) days.


         3.2.     The Initiating Holders shall have the right to three (3)
                  Demands. Subsequent to the First Demand, no Demand shall be
                  effective unless Initiating Holders holding at least 10% of
                  the unregistered Series D Investor Registrable Shares (other
                  than any such Holders who are holding Preferred A, Preferred B
                  or Preferred C Shares or Investor Registrable Shares issued in
                  respect thereof) join in such Demand.


         3.3.     Any registration proceeding begun pursuant to Sections 3.1 or
                  3.2 that is subsequently withdrawn at the request of the
                  Initiating Holders (with respect to their Demand) shall count
                  toward the quota of registration statements which the Investor
                  Holders have the right to cause to effect pursuant to Section
                  3.2; provided further, however, that such withdrawn
                  registration shall not be so counted if such withdrawal is
                  based upon material adverse information relating to the
                  Company or its condition, business, prospects or general
                  securities market conditions which is different from that
                  generally known to the Initiating Holders at the time of their
                  request. In addition, in the event that the Company utilizes
                  its right under Section 3.1 to file a registration statement
                  for its own account by the 31st day subsequent to the making
                  of the First Demand, such Demand shall not count toward the
                  quota of registration statements which the Investor Holders
                  have the right to cause to effect pursuant to Section 3.2.
                  Only the Initiating Holders who make a Demand under Sections
                  3.1 and 3.2 shall have the right to withdraw registration
                  proceedings under Sections 3.1 and 3.2 (with respect to their
                  Demand).


         3.4.     Founder Demand. At any time at least 90 days following the
                  closing of the second of the Demand registrations to occur
                  under Section 3.1, the Initiating Founders may request in
                  writing that all or part of the Founder Registrable Shares
                  shall be registered under the Securities Act. Within 15 days
                  after receipt of any such request, the Company shall give
                  written notice of such request to the other Holders, and shall
                  include in such registration all Registrable Shares held by
                  all such Holders who wish to participate in such demand
                  registration (subject to the limitation below) and provide the
                  Company with written requests for inclusion therein within 20
                  days after the receipt of the Company's notice. Thereupon, the
                  Company shall effect the registration of all Registrable
                  Shares as to which it has received requests for registration
                  (subject to the limitation below). Notwithstanding the above,
                  the maximum number of Founder Registrable Shares that may be
                  included in a registration under this Section 3.4 shall be
                  three times the number of Founder Registrable Shares that the
                  two Founders would together be entitled under Rule 144 of the
                  Securities Act (as currently enacted) to sell during the three
                  month period beginning on the date of the request for
                  registration by the Initiating Founders, assuming that the


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                  Founders are "affiliates" at the time of the registration and
                  that the initial minimum holding period for restricted
                  securities under Rule 144 has passed.


         3.5.     The Company shall not be required to effect more than one (1)
                  registration under Section 3.4, provided, however, that any
                  registration proceeding begun pursuant to Section 3.4 that is
                  subsequently withdrawn at the request of the Initiating
                  Founders shall count toward the one registration statement
                  pursuant to Section 3.4; provided further, however, that such
                  withdrawn registration shall not be so counted if such
                  withdrawal is based upon material adverse information relating
                  to the Company or its condition, business, or prospects which
                  is different from that generally known to the Initiating
                  Founders at the time of their request. Only the Initiating
                  Founders shall have the right to withdraw a registration
                  proceeding under Section 3.4.


         3.6.     Notwithstanding any other provision of this Section 3, if the
                  managing underwriter advises the Investor Holders in writing
                  that in the managing underwriter's opinion the number of
                  securities requested to be included in such registration
                  exceeds the number that can be sold in such offering without
                  adversely affecting such underwriter's ability to effect an
                  orderly distribution of such securities, the Company will
                  include in such registration:

                           1        first, the number of Investor Registrable
                                    Shares requested to be included that, in the
                                    opinion of such underwriters, can be sold,
                                    provided that if, in the opinion of the
                                    managing underwriter, less than all Investor
                                    Registrable Shares requested to be included
                                    can be included in such Demand registration,
                                    then allocation among the Investor Holders
                                    shall be made pro rata among the Investor
                                    Holders participating in such Demand on the
                                    basis of the number of Investor Registrable
                                    Shares which each Investor Holder seeking to
                                    participate in such Demand has requested be
                                    included in such registration;

                           2        second, the number of Ordinary Registrable
                                    Shares requested to be included that, in the
                                    opinion of such underwriters, can be sold,
                                    pro rata, among the holders of such
                                    securities on the basis of the number of
                                    Ordinary Registrable Shares which each
                                    holder of Ordinary Registrable Shares
                                    seeking to participate in such Demand has
                                    requested to be included in such
                                    registration; provided, however, that in any
                                    event, all Investor Registrable Shares must
                                    be included in such registration prior to
                                    any other shares of the Company. The Company
                                    shall not register securities for sale for
                                    its own account in any registration
                                    requested pursuant to this Section 3 unless
                                    permitted to do so by the written consent of
                                    Investor Holders who hold at least 75% of


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                                    the Investor Registrable Shares as to which
                                    registration has been requested.


         3.7.     Subject to the provisions of Section 3.1, the Company may not
                  cause any other registration of securities for sale for its
                  own account (other than a registration effected solely to
                  implement an employee benefit plan) to be initiated after a
                  registration requested pursuant to Section 3 and to become
                  effective less than 90 days after the effective date of any
                  registration requested pursuant to Section 3.


         3.8.     F-3 Registration. Commencing as soon as legally permissible
                  after the closing of the IPO, in any case that the Company
                  shall receive from any Holder or Holders a written request or
                  requests that the Company effect a registration on Form F-3,
                  and any related qualification or compliance, with respect to
                  Investor Registrable Shares where the aggregate net proceeds
                  from the sale of such Investor Registrable Shares equals to at
                  least five million United States Dollars ($5,000,000), the
                  Company will within twenty (20) days after receipt of any such
                  request give written notice of the proposed registration and
                  any related qualification or compliance, to all other Holders,
                  and include in such registration all Investor Registrable
                  Shares held by all such Holders who wish to participate in
                  such registration and provide the Company with written
                  requests for inclusion therein within 15 days after the
                  receipt of the Company's notice. Thereupon, the Company shall
                  effect such registration and all such qualifications and
                  compliances as may be so requested and as would permit or
                  facilitate the sale and distribution of all or such portion of
                  such Holder's or Holders' Investor Registrable Shares as are
                  specified in such request, together with all or such portion
                  of the Investor Registrable Shares of any other Holder or
                  Holders joining such request as are specified in a written
                  request given within fifteen (15) days after receipt of such
                  written notice from the Company; provided, however, that the
                  Company shall not be obligated to effect any such
                  registration, qualification, or compliance, pursuant to this
                  Section 3.8 if the Company has, within the twelve (12) month
                  period preceding the date of such request, already effected
                  two (2) registrations for the Holders pursuant to this Section
                  3.8. The Company undertakes that it will, once having
                  qualified for registration on Form F-3, use its best efforts
                  to comply with all necessary filings and other requirements so
                  as to maintain such qualification.


         3.9.     Additional F-3. The provisions of this Section 3
                  notwithstanding, in the event that all three (3) Demands
                  available pursuant to Section 3.1 are utilized and Holders of
                  at least 75% of either the (i) unregistered Series A and B
                  Investor Registrable Shares (the "DISSENTING SERIES A AND B
                  INVESTORS"), (ii) unregistered Series C Investor Registrable
                  Shares (the "DISSENTING SERIES C INVESTORS") or (iii)
                  unregistered Series D Investor Registrable Shares (the
                  "DISSENTING SERIES D INVESTORS") elect not to participate in
                  any such Demand then the Dissenting Series A and B Investors,
                  the Dissenting Series C Investors and/or the Dissenting Series
                  D Investors, as the case may be, shall each be entitled to an
                  additional demand for an F-3 registration, which F-3
                  registration


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                  shall be effected in accordance with the terms of Section 3.8,
                  with such changes as the context may require.


         3.10.    The Company shall have the right, exercisable once in any 12
                  month period, to defer filing a registration statement (a
                  "REGISTRATION DEFERRAL") under the Securities Act pursuant to
                  this Section 3 for a period of up to 90 days if (i) the Board
                  of Directors of the Company shall determine that it would be
                  seriously detrimental to the Company to file such registration
                  statement at the date the filing would otherwise be required
                  under this Agreement, or (ii) the Board of Directors of the
                  Company determines in good faith that (A) the Company is in
                  possession of material, non-public information concerning an
                  acquisition, merger, recapitalization, consolidation,
                  reorganization or other material transaction by or of the
                  Company or concerning pending or threatened litigation and (B)
                  disclosure of such information would jeopardize any such
                  transaction or litigation or otherwise materially harm the
                  Company, or (iii) at the time of such request the Company is
                  engaged, or has formal plans to engage within 60 days of the
                  time of such request, in an underwritten public offering of
                  securities (including an offering contemplated by Section 3
                  hereof), provided that the Company's right to undertake a
                  registration for its own account contained in Section 3.1
                  shall not be deemed to be an exercise of the provisions of
                  this Section 3.10.


4.       DESIGNATION OF UNDERWRITER.


         4.1.     In the case of any registration effected pursuant to Section
                  3, should the offering be underwritten, the Company and the
                  majority of the Initiating Holders that submitted the request
                  for the Demand registration shall confer as to the selection
                  of a managing underwriter. Should they fail to reach
                  agreement, the selection shall be made by the majority of the
                  Initiating Holders who submitted the Demand request.


         4.2.     In the case of any registration initiated by the Company, the
                  Company shall have the right to designate the managing
                  underwriter in any underwritten offering.


         4.3.       In an IPO, the Company shall use its best efforts to involve
                    Nomura and Nomura shall have the right to act as not less
                    than a co-manager in the underwriters' consortium, with a
                    right to distribute at least 10% of the shares which are
                    subject to the IPO.


5.       EXPENSES.


All expenses incurred in connection with any registration under Sections 2 or 3,
including the reasonable fees of one legal counsel for the selling Holders,
shall be borne by the Company; provided, however, that each of the Holders
participating in such registration shall pay its pro rata portion of the
discounts or commissions payable to any underwriter.


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6.       INDEMNIFICATION AND CONTRIBUTION.


In the event of any registered offering of Ordinary Shares pursuant to this
Agreement:


         6.1.     The Company will indemnify and hold harmless, to the fullest
                  extent permitted by law, any Holder and any underwriter for
                  such Holder, and each person, if any, who controls the Holder
                  or such underwriter, from and against any and all losses,
                  damages, claims, liabilities, joint or several, costs and
                  expenses (including any amounts paid in any settlement
                  effected with the Company's prior written consent) to which
                  the Holder or any such underwriter or controlling person may
                  become subject under applicable law or otherwise, insofar as
                  such losses, damages, claims, liabilities (or actions or
                  proceedings in respect thereof), costs or expenses arise out
                  of or are based upon (i) any untrue statement or alleged
                  untrue statement of any material fact contained in the
                  registration statement or included in the prospectus, as
                  amended or supplemented, or (ii) the omission or alleged
                  omission to state therein a material fact required to be
                  stated therein or necessary to make the statements therein, in
                  the light of the circumstances in which they are made, not
                  misleading, and the Company will reimburse the Holder, such
                  underwriter and each such controlling person of the Holder or
                  the underwriter, promptly upon demand, for any reasonable
                  legal or any other expenses incurred by them in connection
                  with investigating, preparing to defend or defending against
                  or appearing as a third-party witness in connection with such
                  loss, claim, damage, liability, action or proceeding;
                  provided, however, that the Company will not be liable in any
                  such case to the extent that any such loss, damage, liability,
                  cost or expense arises out of or is based upon an untrue
                  statement or omission in such registration statement or
                  prospectus so made in conformity with information furnished to
                  the Company in writing by a Holder, such underwriter or such
                  controlling persons specifically for use in such registration
                  statement; provided, further, that this indemnity shall not be
                  deemed to relieve any underwriter of any of its due diligence
                  obligations; provided, further, that the indemnity agreement
                  contained in this Section 6.1 shall not apply to amounts paid
                  in settlement of any such claim, loss, damage, liability or
                  action if such settlement is effected without the consent of
                  the Company, which consent shall not be unreasonably withheld.
                  Such indemnity shall remain in full force and effect
                  regardless of any investigation made by or on behalf of the
                  selling Shareholder, the underwriter or any controlling person
                  of the selling Shareholder or the underwriter, and regardless
                  of any sale in connection with such offering by the selling
                  Shareholder. Such indemnity shall survive the transfer of
                  securities by a selling Shareholder; or (iii) indemnification
                  of shareholders against any violation or alleged violation by
                  the Company of the Securities Act of 1933, Securities Exchange
                  Act of 1934 or the state securities laws of individual U.S.
                  states.


         6.2.     Each Holder participating in a registration hereunder will
                  indemnify and hold harmless the Company, any underwriter for
                  the Company, and each person, if any, who controls the Company
                  or such underwriter, from and against any and


                                      -14-
<PAGE>   15
                  all losses, damages, claims, liabilities, costs or expenses
                  (including any amounts paid in any settlement effected with
                  the selling Shareholder's consent) to which the Company or any
                  such controlling person and/or any such underwriter may become
                  subject under applicable law or otherwise, insofar as such
                  losses, damages, claims, liabilities (or actions or
                  proceedings in respect thereof), costs or expenses arise out
                  of or are based on (i) any untrue statement or alleged untrue
                  statement of any material fact contained in the registration
                  statement or included in the prospectus, as amended or
                  supplemented, or (ii) the omission or alleged omission to
                  state therein a material fact required to be stated therein or
                  necessary to make the statements therein, in the light of the
                  circumstances in which they were made, not misleading, and
                  each such Holder will reimburse the Company, any underwriter
                  and each such controlling person of the Company or any
                  underwriter, promptly upon demand, for any reasonable legal or
                  other expenses incurred by them in connection with
                  investigating, preparing to defend or defending against or
                  appearing as a third-party witness in connection with such
                  loss, claim, damage, liability, action or proceeding;
                  provided, however, notwithstanding the foregoing terms of this
                  Section 6.2, that the Holder shall be liable in any such case
                  only to the extent that any such loss, damage, liability, cost
                  or expense arises out of or is based upon an untrue statement
                  or omission in such registration or prospectus made in strict
                  conformity with written information furnished to the Company
                  by such Holder specifically for use in such registration
                  statement; and provided further that the liability of such
                  Holder under this Section 6.2, excluding liability for costs
                  and expenses arising out of any action or proceeding, shall
                  not exceed the product of the number of shares registered by
                  the Holder and the per share purchase price of the shares as
                  set forth in the registration; provided, further, that this
                  indemnity shall not be deemed to relieve any underwriter of
                  any of its due diligence obligations; provided, further, that
                  the indemnity agreement contained in this Section 6.2 shall
                  not apply to amounts paid in settlement of any such claim,
                  loss, damage, liability or action if such settlement is
                  effected without the consent of the Holders, as the case may
                  be, which consent shall not be unreasonably withheld. In no
                  event shall the liability of a Holder exceed the gross
                  proceeds from the offering received by such Holder.


         6.3.     Promptly after receipt by an indemnified party pursuant to the
                  provisions of Sections 6.1 or 6.2 of notice of the
                  commencement of any action involving the subject matter of the
                  foregoing indemnity provisions, but in any event no fewer than
                  ten (10) days before the date designated in such notice as the
                  date by which an answer must be served (or such extension
                  thereof, provided that the extension has been granted in
                  writing by the plaintiff and that no admission or consent to
                  jurisdiction or other waiver has been granted or implied by
                  the request for such an extension), such indemnified party
                  will, if a claim thereof is to be made against the
                  indemnifying party pursuant to the provisions of said Sections
                  6.1 or 6.2, promptly notify the indemnifying party of the
                  commencement thereof In


                                      -15-
<PAGE>   16
                  case such action is brought against any indemnified party and
                  it notifies the indemnifying party of the commencement
                  thereof, the indemnifying party shall have the right to
                  participate in, and, to the extent that it may wish, jointly
                  with any other indemnifying party similarly notified, to
                  assume the defense thereof with counsel reasonably
                  satisfactory to such indemnified party; provided, however,
                  that if the defendants in any action include both the
                  indemnified party and the indemnifying party and there is a
                  conflict of interests which would prevent counsel for the
                  indemnifying party from also representing the indemnified
                  party, the indemnified party or parties shall have the right
                  to select one separate counsel to participate in the defense
                  of such action on behalf of such indemnified party or parties.
                  After notice from the indemnifying party to such indemnified
                  party of its election so to assume the defense thereof, the
                  indemnifying party will not be liable to such indemnified
                  party pursuant to the provisions of said Sections 6.1 or 6.2
                  for any legal or other expense subsequently incurred by such
                  indemnified party in connection with the defense thereof,
                  unless (i) the indemnified party shall have employed counsel
                  in accordance with the provision of the preceding sentence,
                  (ii) the indemnifying party shall not have employed counsel
                  reasonably satisfactory to the indemnified party to represent
                  the indemnified party within a reasonable time after the
                  notice of the commencement of the action and within 15 days
                  after written notice of the indemnified party's intention to
                  employ separate counsel pursuant to the previous sentence, or
                  (iii) the indemnifying party has authorized the employment of
                  counsel for the indemnified party at the expense of the
                  indemnifying party. No indemnifying party will consent to
                  entry of any judgment or enter into any settlement which does
                  not include as an unconditional term thereof the giving by the
                  claimant or plaintiff to such indemnified party of a release
                  from all liability in respect to such claim or litigation.


         6.4.     Contribution. If for any reason the foregoing indemnity is
                  unavailable, or is insufficient to hold harmless an
                  indemnified party, then the indemnifying party shall
                  contribute to the amount paid or payable by the indemnified
                  party as a result of such losses, claims, damages, liabilities
                  or expenses (i) in such proportion as is appropriate to
                  reflect the relative benefits received by the indemnifying
                  party on the one hand and the indemnified party on the other
                  from the registration or (ii) if the allocation provided by
                  clause (i) above is not permitted by applicable law, or
                  provides a lesser sum to the indemnified party than the amount
                  hereinafter calculated, in such proportion as is appropriate
                  to reflect not only the relative benefits received by the
                  indemnifying party on the one hand and the indemnified party
                  on the other but also the relative fault of the indemnifying
                  party and the indemnified party as well as any other relevant
                  equitable considerations; provided that in no event shall any
                  contribution by a Holder hereunder exceed the gross proceeds
                  from the offering received from such Holder. No person guilty
                  of fraudulent misrepresentation (within the meaning of Section
                  11(f) of the Securities Act) shall be entitled to contribution
                  from any person who was not guilty of such fraudulent
                  misrepresentation.


                                      -16-
<PAGE>   17
7.    OBLIGATIONS OF THE COMPANY.


Whenever required under this Agreement to effect the registration of any
Registrable Shares, the Company shall, as expeditiously as possible:


      7.1.   (i) prepare and file with the SEC a registration statement with
             respect to such Registrable Shares and use its best efforts to
             cause such registration statement to become effective, (ii) upon
             the request of the holders of a majority of the Registrable
             Shares registered thereunder, keep a registration statement
             filed pursuant to Section 2 effective for a period of up to two
             hundred seventy (270) days  or, if sooner, until the
             distribution contemplated in the Registration Statement has been
             completed, and (iii) upon the request of the holders of a
             majority of the Investor Registrable Shares registered
             thereunder, keep a registration statement filed pursuant to
             Section 3 above effective for a period of up to two hundred
             seventy (270) days or, if sooner, until the distribution
             contemplated in the Registration Statement has been completed,
             provided, that the in the case of the First Demand, the Company
             shall not be obligated to keep the registration statement filed
             pursuant thereto effective for more than one hundred and eighty
             (180) days or, in the event such First Demand is underwritten,
             for more than the period within which the distribution
             contemplated in the registration statement has been completed,
             and further provided, that in the event that the First Demand is
             not underwritten, no Holder may sell shares pursuant to the
             registration statement effective pursuant to the First Demand
             without first inquiring of the Company in writing as to whether
             such sale would be permissible at such time in light of the then
             current form of such registration statement.  Failure by the
             Company to respond in writing to an address or fax number
             provided by the inquiring shareholder in its inquiry within
             three days of the request shall be deemed to be assent to such
             proposed sale.  In the event that the Company does inform the
             inquiring shareholder that the proposed sale of securities under
             the relevant registration statement would not be permissible at
             such time, then the Company shall use its best efforts to amend
             or supplement such registration statement or the prospectus
             included therein so that such shareholder can sell its
             securities thereunder unless (i) the Board of Directors of the
             Company determines that it would be seriously detrimental to the
             Company to so amend or supplement such registration statement or
             prospectus, or (ii) the Board of Directors of the Company
             determines in good faith that (A) the Company is in possession
             of material, non-public information concerning an acquisition,
             merger, recapitalization, consolidation, reorganization or other
             material transaction by or of the Company or concerning pending
             or threatened litigation and (B) disclosure of such information
             would jeopardize any such transaction or litigation or otherwise
             materially harm the Company.  In any such event, the Company
             shall promptly notify the inquiring holder when the use of the
             relevant registration statement or prospectus may be resumed or
             supply such holder with copies of any amendment or supplement
             made pursuant


                                      -17-
<PAGE>   18
             to the preceding sentence and such inquiring holder shall not
             dispose of its Registrable Shares under such registration statement
             or prospectus until it is so advised in writing by the Company that
             the use of the prospectus included in such registration statement
             may be resumed or until such holder receives such copies of any
             supplement or amendment to such registration statement or
             prospectus, provided, however, that any such prohibition shall not
             be in effect for more than 90 days in any 12 month period.


      7.2.   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 reasonably necessary to
             comply with the provisions of the Securities Act with respect to
             the disposition of all Registrable Shares covered by such
             registration statement.


      7.3.   furnish to the Holders such numbers 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 disposition
             of Registrable Shares owned by them.


      7.4.   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 of such offering.
             Each Holder participating in such underwriting shall also enter
             into and perform its obligations under such an agreement.


      7.5.   notify each holder of Registrable Shares covered by 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, in which event each such holder
             of Registrable Shares shall forthwith discontinue disposition of
             its Registrable Shares pursuant to such prospectus until it is
             advised in writing by the Company that the use of such
             prospectus may be resumed or until such holder receives copies
             of any supplement or amendment to such prospectus, provided,
             however, that  such suspensions shall not be in effect for more
             than 90 days in any 12 month period.


      7.6.   cause all Registrable Shares registered pursuant hereunder to be
             listed on each securities exchange (or Nasdaq) on which similar
             securities issued by the Company are then listed.


      7.7.   provide a transfer agent and registrar for all Registrable Shares
             registered pursuant hereunder and a CUSIP number for all such
             Registrable Shares, in each case not later than the effective date
             of such registration.


                                      -18-
<PAGE>   19
      7.8.   take such action under the securities laws of such states of the
             United States as any participating Holder shall reasonably request;
             provided, however, that the Company shall not be required to
             qualify to do business as a foreign corporation, or to file any
             general consent to service of process, in any state.


      7.9.   furnish, at the request of any Holder requesting registration of
             Registrable Shares pursuant to this Agreement, on the date that
             such Registrable Shares are delivered to the underwriters for
             sale in connection with a registration pursuant to this
             Agreement, if such securities are being sold through
             underwriters, or, if such securities are not being sold through
             underwriters, on the date that the registration statement with
             respect to such securities becomes effective, (i) an opinion,
             dated such date, of the counsel representing the Company for the
             purposes of such registration, in form and substance as is
             customarily given to underwriters in an underwritten public
             offering, addressed to the underwriters, if any, and to the
             Holders requesting registration of Registrable Shares and (ii) a
             letter dated such date, from the independent certified public
             accountants of the Company, in form and substance as is
             customarily given by independent certified public accountants to
             underwriters in an underwritten public offering, addressed to
             the underwriters, if any, and to the Holders requesting
             registration of Registrable Shares.


8.    CONDITIONS TO REGISTRATION OBLIGATIONS.


The Company shall not be obligated to effect the registration of Registrable
Shares pursuant to this Agreement unless the Holder consents to the following
conditions:


      8.1.   conditions requiring the Holder to comply with all applicable
             provisions of the Securities Act and the Securities and Exchange
             Act including, but not limited to, the prospectus delivery
             requirements of the Securities Act, and to furnish to the Company
             information about sales made in such public offering; and


      8.2.   conditions prohibiting the Holder upon receipt of telegraphic or
             written notice from the Company that it is required by law to
             correct or update the registration statement or prospectus from
             effecting sales of the Registrable Shares until the Company has
             completed the necessary correction or updating.


      8.3.   conditions prohibiting the sale of Registrable Shares by such
             Holder, as the case may be, during the process of the registration
             until the Registration Statement is effective.


9.    ASSIGNMENT OF REGISTRATION RIGHTS.


Any of the Holders may assign its rights to cause the Company to register
pursuant to this Agreement all or any part of its Registrable Shares. The
transferor shall, within twenty (20) days after such transfer, furnish the
Company with written notice of the name and address of such


                                      -19-
<PAGE>   20
transferee and the securities with respect to which such registration rights are
being assigned, and the transferee's written agreement to be bound by this
Agreement.


10. LOCK-UP AND OTHER REQUIREMENTS OF THE HOLDERS.


In connection with the Company's IPO all Holders agree, and in connection with
any underwritten registration of the Company's shares pursuant to Sections 2 or
3 above, all Holders participating in such underwritten offering agree that any
sales of Registrable Shares may be subject to a "lock-up" period restricting
such sales for up to one hundred and eighty (180) days, and all such Holders
will agree to abide by such customary "lock-up" period of up to one hundred and
eighty (180) days as is required by the underwriter in such a registration and
further agree to execute such further documents as may be required by the
underwriters to effectuate such "lock-up". In addition, no Holder may
participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person's securities on the basis provided in any customary
underwriting arrangements 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; provided that such underwriting arrangements shall
not provide for indemnification or contribution obligations on the part of the
holders greater than the obligations set forth in Article 6 above.


11.   RULE 144.


At any time and from time to time after the earlier of the close of business on
such date as (a) a registration statement filed by the Company under the
Securities Act becomes effective, or (b) the Company registers a class of
securities under Section 12 of the United States Securities Exchange Act of
1934, as amended, or any federal statute or code which is a successor thereto
(the "Exchange Act") the Company shall:


      11.1.  Make and keep available adequate current public information with
             respect to the Company within the meaning of Rule 144(c) under the
             Securities Act (or similar rule then in effect);


      11.2.  Furnish to any holder of Registrable Shares forthwith upon request
             (i) a written statement by the Company as to its compliance with
             the informational requirements of Rule 144(c) (or similar rule then
             in effect) or (ii) a copy of the most recent annual or quarterly
             report of the Company; and


      11.3.  Use its best efforts to comply with all other necessary filings and
             other requirements so as to enable the Investors and any transferee
             thereof to sell Registrable Shares under Rule 144 under the
             Securities Act (or similar rule then in effect).


12.   OTHER REGISTRATION RIGHTS; TERM


      12.1.  The Company shall not grant registration rights with respect to any
             securities of the Company to any person that are equal to or
             superior to the registration rights granted to the Investor Holders
             pursuant to this Agreement, except with the


                                      -20-
<PAGE>   21
             written consent of a majority of each of the Series A, Series B,
             Series C and Series D Investor Registrable Shares.


      1.2.   The registration rights contained herein shall expire three (3)
             years following the date of the Company's IPO, except that the
             rights set forth in Section 6 shall not expire.


13.   AFFIRMATIVE COVENANTS.

The    Company covenants and agrees with the Investors that until the
       consummation of a Qualified IPO (as such term is defined in the Company's
       Articles of Association):


      13.1.  Financial Reporting. The Company shall maintain a system of
             accounting established and administered in accordance with the
             United States generally accepted accounting principles consistently
             applied ("GAAP"), will keep full and complete financial records,
             and will furnish to the Investors the following reports in English:


             13.1.1.  As soon as practicable after the end of each fiscal
                      year, and in any event within 90 days thereafter, the
                      audited consolidated balance sheet of the Company as at
                      the end of such fiscal year, and audited consolidated
                      statements of operations and retained earnings and cash
                      flow of the Company for such fiscal year, all in
                      reasonable detail, accompanied by consolidating
                      schedules, and prepared in accordance with GAAP in
                      adjusted NIS and in U.S. Dollars, and audited by the
                      Israeli affiliate of one the "Big 5" U.S. accounting
                      firms (the "Auditors").


             13.1.2.  As soon as practicable after the end of the first,
                      second, and third quarter in each fiscal year and in
                      any event within 45 days thereafter, the unaudited
                      consolidated balance sheet and statements of operations
                      and retained earnings and cash flow of the Company for
                      such quarter, all in reasonable detail, prepared in
                      accordance with GAAP, and certified to be complete and
                      correct (subject to year-end adjustments) by the chief
                      financial officer of the Company, in adjusted NIS and
                      in U.S. Dollars, and reviewed by the Auditors.


      13.2.  Other Information. The Company shall furnish to the Investors
             holding (including any unexercised warrants) not less than 1.0% of
             the Company's outstanding share capital (on a fully diluted, as
             converted, basis) the following reports and information in English:


             13.2.1.  Within 20 days after the period to which they relate,
                      brief monthly financial reports in such form as shall be
                      agreed from time to time between the Company and the
                      Investors.


                                      -21-
<PAGE>   22
             13.2.2.  An annual operating plan and budget, at least 30 days
                      prior to the first day of the year covered by such plan,
                      to be provided only to the Directors appointed pursuant to
                      Section 15.1 (as defined below).


             13.2.3.  promptly after receipt, all reports delivered to the
                      Company by its accountants;


             13.2.4.  promptly after the commencement or threatened
                      commencement thereof, notice of all material actions,
                      suits, investigations, and proceedings before any court
                      or governmental department, arbitration panel,
                      commission, board, bureau, agency or instrumentality,
                      domestic or foreign, affecting the Company or any of
                      its subsidiaries other than ordinary and routine
                      litigation covered under the limits of existing
                      insurance policies;


             13.2.5.  promptly, copies of any press releases issued by the
                      Company;


             13.2.6.  promptly after an Investor's request therefor, copies
                      of minutes of meetings of the Board of Directors of the
                      Company;


             13.2.7.  promptly, copies of all amendments to the Articles of
                      Association or Memorandum of Association of the
                      Company; and


             13.2.8.  such other information regarding the business, affairs and
                      condition of the Company as the Investors may from time to
                      time reasonably request.


      13.3.  Legal Existence, Compliance, Etc.


             13.3.1.  The Company will maintain its existence as a limited
                      company duly organized and validly existing under the laws
                      of the State of Israel.


             13.3.2.  The Company will conduct its business in compliance in
                      all material respects with all permits and licenses
                      issued by, and all statutes, rules, regulations and
                      orders of, and all restrictions imposed by, all
                      governmental authorities, domestic or foreign, federal
                      or state, applicable to the conduct of its business and
                      the ownership of its property (including, without
                      limitation, applicable statutes, rules, regulations,
                      orders and restrictions relating to environmental,
                      safety and other similar standards or controls).


             13.3.3.  The Company will conduct its business in compliance in all
                      material respects with all licenses, agreements and
                      contracts to which it is a party.


             13.3.4.  The Company will maintain, keep, and preserve all of its
                      material properties (tangible and intangible) necessary in
                      the proper conduct of


                                      -22-
<PAGE>   23
                      its business in good working order and condition, ordinary
                      wear and tear excepted.


             13.3.5.  The Company will maintain or cause to be maintained,
                      with financially sound and reputable insurers,
                      insurance with respect to its assets and businesses
                      against loss or damage of the kinds customarily insured
                      against by corporations of established reputation
                      engaged in the same or similar businesses and similarly
                      situated, of such types and in such amounts and with
                      such deductibles as are customarily carried by such
                      other corporations.


      13.4.  Preferred Shares


             The Company shall comply with the terms and conditions of the
             Preferred Shares as set forth in the Articles of Association.


      13.5.  Right of Inspection


             At any reasonable time and from time to time, upon reasonable
             notice, the Company shall permit a Director approved by the
             Investors to examine and make copies of and abstracts from the
             records and books of account of, and visit the properties of, the
             Company and to discuss the affairs, finances and accounts of the
             Company with any of its officers and directors and furnish to each
             such person, promptly upon the request of such person, copies of
             such financial and operating data (such as patents, issued or
             filed, licensing agreements, research and development contracts,
             joint venture agreements, etc.) and other information as reasonably
             requested by such person. The Company will permit such persons to
             inspect, audit and make copies of the books and records of the
             Company, to discuss the business and affairs of the Company with
             the officers of the Company, and to inspect any of the properties
             or assets of the Company upon reasonable notice to the Company and
             at such reasonable times as such persons may from time to time
             request. Upon three business days' prior notice to the Company,
             such persons shall have the right to confer in their discretion
             with the independent certified public accountants of the Company at
             any time during normal business hours upon any matter involving the
             financial condition of the Company and such accountants are hereby
             irrevocably authorized to fully discuss with and disclose to the
             Investors all such matters. Each such person shall bear its own
             expenses in connection with the exercise of its rights under this
             Section. Each such person severally and not jointly agrees to
             maintain the confidentiality of any information received by it
             pursuant to this Section, until such information becomes public or
             is otherwise no longer confidential or as otherwise required by
             law, provided, however, that each such person may share the
             information received by it pursuant to this Section with its
             partners, if any, and with its legal, accounting, financial and
             other advisors and representatives.


                                      -23-
<PAGE>   24
      13.6.  Transfer Pursuant to Rule 144A


             The Company agrees to provide to any holder of Preferred Shares
             and, upon such holder's request, to any prospective purchaser
             designated by such holder the financial and other information
             specified in Rule 144A(d)(4) under the Securities Act and to take
             any other action reasonably requested by such holder or to execute
             any certificates necessary to permit a transfer by any such holder
             to qualify for the exemption set forth in Rule 144A.


14.   NEGATIVE COVENANTS.


Until the consummation of an IPO, and in addition to the provisions of any
applicable law, consent of:


      14.1.  the holders of the majority of the then outstanding Preferred A
             Shares shall be required for any of the following acts:


             14.1.1. Modification of rights of the Preferred A Shares;


             14.1.2.  Increase in the number of authorized Preferred A Shares;


             14.1.3.  Creation or issuance of any class or series of shares on a
                      parity with or having preference over the Preferred A
                      Shares; or


             14.1.4.  Amendments to the Articles (including, without limitation,
                      modification of rights of the rights of the Series B,
                      Series C or Series D Preferred Shares) that would
                      adversely affect the holders of the Series A Preferred
                      Shares or the relative rights and preferences of the
                      Series A Preferred Shares.


      14.2.  the holders of the majority of the then outstanding Preferred B
             Shares shall be required for any of the following acts:


             14.2.1.  Modification of rights of the Preferred B Shares;


             14.2.2.  Increase in the number of authorized Preferred B Shares;


             14.2.3.  Creation or issuance of any class or series of shares on a
                      parity with or having preference over the Preferred B
                      Shares; or


             14.2.4.  Amendments to the Articles (including, without limitation,
                      modification of rights of the rights of the Series A,
                      Series C or Series D Preferred Shares) that would
                      adversely affect the holders of the Series B Preferred
                      Shares or the relative rights and preferences of the
                      Series B Preferred Shares.


                                      -24-
<PAGE>   25
      14.3.  the holders of the majority of the then outstanding Preferred C
             Shares shall be required for any of the following acts:


             14.3.1.  Modification of rights of the Preferred C Shares;


             14.3.2.  Increase in the number of authorized Preferred C Shares;


             14.3.3.  Creation or issuance of any class or series of shares on a
                      parity with or having preference over the Preferred C
                      Shares; or


             14.3.4.  Amendments to the Articles (including, without limitation,
                      modification of rights of the rights of the Series A,
                      Series B or Series D Preferred Shares) that would
                      adversely affect the holders of the Series C Preferred
                      Shares or the relative rights and preferences of the
                      Series C Preferred Shares.


      14.4.  the holders of the majority of the then outstanding Series D
             Preferred Shares shall be required for any of the following acts:


             14.4.1.  Modification of rights of the Series D Preferred Shares;


             14.4.2.  Increase in the number of authorized Series D Preferred
                      Shares;


             14.4.3.  Creation or issuance of any class or series of shares on a
                      parity with or having preference over the Series D
                      Preferred Shares; or


             14.4.4.  Amendments to the Articles (including, without limitation,
                      modification of rights of the rights of the Series A,
                      Series B or Series C Preferred Shares) that would
                      adversely affect the holders of the Series D Preferred
                      Shares or the relative rights and preferences of the
                      Series D Preferred Shares.


      14.5.  each of (i) the holders of the majority of the then outstanding
             Preferred A Shares, (ii) the holders of the majority of the then
             outstanding Preferred B Shares, (iii) the holders of the majority
             of the then outstanding Preferred C Shares and (iv) the holders of
             the majority of the then outstanding Preferred D Shares shall be
             required for any of the following acts:


             14.5.1.  effecting a merger, consolidation or reorganization of or
                      acquisition by the Company or the sale, lease or other
                      disposal of all or substantially all of the Company's
                      assets, including the sale, lease, license, transfer or
                      other disposition of any of the Company's material
                      technology, except as effected under the Company's
                      ordinary course of business;


             14.5.2.  reclassification of outstanding capital shares of the
                      Company; modification of the Company's Memorandum or
                      Association or


                                      -25-
<PAGE>   26
                      Articles of Association (other than modifications governed
                      by sections 14.1.1, 14.2.1 and 14.3.1);


             14.5.3.  a material change in the business of the Company;


             14.5.4.  an IPO which is not a Qualified IPO.


      14.6.  The consent of the Series A Director, the Series B Director, the
             Series C Directors and the Series D Director (each as defined
             below) shall be required for the authorization or issuance of
             shares of the Company (or options to purchase shares) to
             officers, directors, employees or affiliates of (or consultants
             to) the Company or any of its subsidiaries pursuant to option
             plans, share or option purchase plans or other employee
             incentive programs other than issuances of Ordinary Shares or
             options to purchase Ordinary Shares which in the aggregate would
             not exceed 8,000,000 Ordinary Shares (including for purposes of
             such calculation the maximum number of shares issuable upon
             exercise or conversion of options to purchase Ordinary Shares
             and options to purchase Ordinary Shares outstanding as of the
             date of this Agreement).


      14.7.  Except as provided hereinabove, any and all veto rights previously
             granted to any of the shareholders of the Company under any
             instrument whatsoever (other than the Company's Articles of
             Association as currently effective), including in any agreement,
             meetings of the Company's shareholders and/or Board of Directors,
             are hereby cancelled and terminated.





15.   BOARD OF DIRECTORS.


      15.1.  Until the consummation of an IPO, the Board of Directors shall be
             composed of up to nine (9) members, as set forth below:


             15.1.1.  The holders of the Ordinary Shares, voting as a separate
                      class, shall have the right to nominate two (2) directors;


             15.1.2.  The holders of the Preferred A Shares shall be entitled to
                      designate one (1) director, (the "Series A Director")
                      provided however, that so long as ISLP II and its
                      Permitted Transferees own 8% or more of the issued and
                      outstanding shares of the Company on an as-converted
                      basis, ISLP II shall have the right to appoint the Series
                      A Director;


             15.1.3.  the holders of Preferred B Shares shall be entitled to
                      designate one (1) director (the "Series B Director");


             15.1.4.  the holders of Series C Preferred Shares shall be
                      entitled to designate two (2) directors (the "Series C
                      Directors"), provided however, that, so long as Nomura
                      or its Permitted Transferees shall hold any Series C


                                      -26-
<PAGE>   27
                      Preferred Shares, Nomura alone and at its sole
                      discretion shall be entitled to designate one Series C
                      Director, and so long as WaterView Partners L.P.
                      ("WaterView") and its Permitted Transferees shall hold
                      any Series C Preferred Shares, WaterView alone and at
                      its sole discretion shall be entitled to designate one
                      Series C Director;


             15.1.5.  one (1) director shall be an independent director, who
                      shall be elected by a majority of the board of
                      directors;


             15.1.6.  one (1) director shall be the CEO of the Company
                      (currently, Daniel Ciporin); and


             15.1.7.  Bain Capital Integral Investors LLC ("Bain"), for so
                      long as it or its affiliates own not less than 10% of
                      the outstanding Series D Preferred Shares issued to
                      Bain pursuant to the Subscription Agreement dated
                      February 8, 2000 and Ordinary Shares issued pursuant to
                      the conversion of such Series D Preferred Shares, and
                      thereafter the Series D Preferred Shares as a class,
                      shall be entitled to designate one (1) director (the
                      "Series D Director").


      15.2.  Observer Rights. Until the consummation of an IPO, the Company
             shall afford to one (1) representative of Axiom Venture Partners
             II L.P., for as long as it shall hold not less than 2% of the
             issued and outstanding capital of the Company, to one (1)
             representative of the IIF Investors, for as long as it shall
             hold not less than 2% of the issued and outstanding capital of
             the Company, and to one (1) representative of Hollinger Capital
             LLC ("Hollinger), for as long as it shall hold not less than 3%
             of the issued and outstanding capital of the Company, reasonable
             Board of Directors' visitation rights by one observer. Such
             visitation rights shall include (i) the right to receive
             reasonable notice in advance of all Board of Directors meetings
             (ii) the right to receive, concurrently with receipt by members
             of the Board of Directors, all materials, reports and other
             written communications received by members of the Board of
             Directors (which right the Company shall also afford to one (1)
             representative of UBS AG (the "UBS Representative"), for as long
             as it or any UBS Group Company or any limited partnership, the
             general partner of which is a UBS Group Company, shall hold not
             less than 2% of the issued and outstanding capital of the
             Company) and (iii) the right to attend all Board  of  Directors
             meetings   as  an  observer;   provided,   however,  that  the
             Company may require as a condition precedent to the rights under
             this Section 15.2 that such observer attending any meeting of
             the Board of Directors and having access to any of the
             information provided by the Company to the Board of Directors
             (including the UBS representative) agrees in writing to hold in
             confidence and trust and to act in a fiduciary manner with
             respect to all information so received during such meetings or
             otherwise.  No inadvertent failure of the Company to notify
             Axiom Venture Partners II L.P., the IIF Investors or Hollinger
             of any meetings of the Board of Directors shall operate


                                      -27-
<PAGE>   28
             to invalidate any action of the Board of Directors taken at any
             such meeting. For purpose of this Section 15.2, the term "Board of
             Directors" shall also refer to any committees thereof excepting the
             compensation committee and the audit committee.


      15.3.  The appointment, dismissal or replacement of any director so
             designated, shall be by written notice given to the Company by the
             designating party or class of shareholders.


      15.4.  The Company shall not change or expand the signatory rights for the
             Company currently in effect without the consent of a majority vote
             of the members of the Board of Directors.


      15.5.  The Company will reimburse the Investors and the Directors for all
             reasonable expenses incurred by them in all activities done on
             behalf of the Company, including but not limited to, travel to and
             lodging incidental to meetings of the Board of Directors and
             committees thereof and expenses incurred when interviewing
             potential candidates.


16. PRE-EMPTIVE RIGHT.


      16.1.  Prior to the consummation of a Qualified IPO, if the Company
             proposes to issue or sell any New Securities (as defined in
             Section 16.2.1), the Company shall, before such issuance, offer
             to all shareholders (collectively the "Offered Shareholders")
             the right to purchase a pro-rata share of the New Securities.  A
             shareholder's pro-rata share, for purposes of this Section, is
             the ratio of the number of issued shares owned by such
             Shareholder immediately prior to the issuance of New Securities
             (treating all Preferred Shares as if fully converted), to the
             total number of shares outstanding immediately prior to the
             issuance of New Securities (treating all of the Preferred Shares
             as if fully converted).


             Each holder of Preferred Shares shall have a right of
             over-allotment such that if any of the holders of Preferred Shares
             fails to exercise its right hereunder to purchase its pro-rata
             share of New Securities, the other Investors holding Preferred
             Shares may purchase the portion of the non-purchasing shareholder
             pro-rata according to the shareholding ratio between such other
             shareholders of Preferred Shares, within five (5) days from the
             date such non-purchasing holder of Preferred Shares fails to
             exercise its rights hereunder to purchase its pro-rata share of New
             Securities.


             Each one of the Founders shall have a right of over-allotment such
             that if any of the holders of Ordinary Shares fails to exercise its
             right hereunder to purchase its pro-rata share of New Securities,
             each Founder may purchase the portion of the non-purchasing
             shareholder pro-rata according to the shareholding ratio between
             the Founders within five (5) days from the date such non-purchasing
             holder of


                                      -28-
<PAGE>   29
             Ordinary Shares fails to exercise its rights hereunder to purchase
             its pro-rata share of New Securities.


      16.2.  This pre-emptive right shall be subject to the following
             provisions:


             16.2.1.  "NEW SECURITIES" shall mean any equity interest
                      (including Ordinary and Preferred Shares) in the
                      Company, whether now authorized or not, and rights,
                      options or warrants to purchase such equity interests,
                      and securities of any type whatsoever that are
                      convertible into equity interests; provided that the
                      term "New Securities" does not include: (i) securities
                      issued upon the conversion of the Preferred Shares or
                      conversion of the Option Shares and (ii) securities
                      issued, pursuant to a resolution of the Board of
                      Directors, to employees, directors or consultants of
                      the Company, subsidiary or parent of the Company, who
                      hold less than 5% of the Company's issued and
                      outstanding share capital; and (iii) securities issued
                      in a Qualified IPO; and (iv) securities issued in
                      connection with stock split, stock dividend or other
                      recapitalization events in the Company; (v) Preferred C
                      Shares issuable upon the exercise of the Warrants (as
                      defined, and under the terms set forth, in the SPA) or
                      any other shares issuable pursuant to other warrants
                      outstanding as of February 8, 2000and (vi) securities,
                      in an amount not exceeding, in the aggregate, 10% of
                      the issued and outstanding share capital of the
                      Company, issued to a Strategic Investor on or after
                      January 1, 2000.  "Strategic Investor" shall mean an
                      entity  which, in the determination of the majority of
                      the Board of Directors (including the approval of all
                      of the Directors appointed pursuant to Section 15.1.2,
                      15.1.3 and 15.1.4) is capable of materially
                      contributing directly or indirectly to the Company's
                      business other than by investing capital in the Company.


             16.2.2.  In the event the Company proposes to undertake an
                      issuance of New Securities, it shall give each Offered
                      Shareholder written notice of its intention, describing
                      the type of New Securities, and their price and the
                      terms upon which the Company proposes to issue the
                      same.  Each Offered Shareholder shall have seven (7)
                      days after any such notice is delivered to agree to
                      purchase such Offered Shareholder's pro rata share of
                      such New Securities for the price and upon the terms
                      specified in the notice by giving written notice to the
                      Company and stating therein the quantity of New
                      Securities to be purchased.


             16.2.3.  In the event the Offered Shareholders fail to exercise
                      fully the pre-emptive right within the said seven (7)
                      day period the Company shall have one hundred twenty
                      (120) days thereafter to sell or enter into an
                      agreement to sell the New Securities respecting which
                      the Offered Shareholders' pre-emptive right set forth
                      in this Section is not


                                      -29-
<PAGE>   30
                      exercised, at a price and upon terms no more favorable to
                      the purchasers thereof than specified in the Company's
                      notice to the Offered Shareholders pursuant to this
                      Section 16.2. In the event the Company has not sold or
                      entered into an agreement to sell the New Securities in
                      accordance with the foregoing within one hundred twenty
                      (120) days, the Company shall not thereafter issue or sell
                      any New Securities, without first again offering such
                      securities to the Offered Shareholders in the manner
                      provided in this Section 16.


17.   FOUNDER SALES.


      1.1.   Notwithstanding anything to the contrary in this Agreement, each
             of the Founders and/or their Permitted Transferees shall be
             entitled to sell, transfer, assign, encumber or otherwise
             dispose of shares in the Company held by him, with no limitation
             under Section 17.2 and free of the rights in favor of the
             Investors under Section 19 (Investor Tag-Along Rights) up to 5%
             of the shares in the Company held by each of the Founders as of
             August 24, 1998 ("Transferable Shares").




      17.2.  Except as set forth in Section 17.1, until the consummation of a
             Qualified IPO, no Founder nor any of their Permitted Transferees
             shall sell, transfer, assign, encumber or otherwise dispose of
             the shares in the Company held by the Founder as of the date
             hereof, without the prior written consent of the holders of 75%
             or more of each of (i) the Preferred A Shares, (ii) the
             Preferred B Shares, (iii) the Preferred C Shares and (iv) the
             Preferred D Shares.


      17.3.  The Founders shall be entitled to transfer or sell shares to their
             Permitted Transferees, provided that the Permitted Transferee
             agrees to be bound to the provisions of this Agreement and the
             Company's Articles of Association.


      17.4.  In the event that a Founder or any of his Permitted Transferees
             should sell any shares in contravention of this Agreement, such
             transfer shall be deemed null and void and the Investors may
             proceed to protect and enforce their rights by suit in equity or
             by action at law, whether for the specific performance of any
             term contained in this Agreement or for an injunction against
             the breach of any such term or in furtherance of the exercise of
             any power granted in this Agreement, or to enforce any other
             legal or equitable right of the Investors or to take one or more
             of such actions.


18.   RIGHT OF FIRST REFUSAL.


      18.1.  In the event that any shareholder(s) of the Company (the "Selling
             Shareholder") desires to sell or transfer any or all of its shares
             to any party other than a Permitted Transferee (the "Offered
             Shares"), it shall first give written notice


                                      -30-
<PAGE>   31
             thereof ("Notice of Sale") to all other shareholders (collectively
             the "Option Holders").


      18.2.  The Notice of Sale shall state the number of Offered Shares,
             whether the Offered Shares will, upon the sale, be free of all
             liens, charges and encumbrances, that a bona fide offer has been
             received from a third party, the identity of the third party,
             and the price and terms of payment for the Offered Shares.  Upon
             receipt of the Notice of Sale, the Option Holders shall have the
             right to exercise the option (the "Option") contained in
             Sections 18.3 and 18.4.


      18.3.  For a period of 20 days after receipt of the Notice of Sale, the
             Option Holders collectively may elect to purchase all (but not
             part) of the Offered Shares (those Option Holders which exercise
             the Option are referred to as the "Buying Shareholders").  The
             Option shall be exercised by delivery of a notice by one or more
             of the Buying Shareholders to the Selling Shareholder within the
             aforesaid 20-day period stating (i) that the Buying Shareholder
             intends to acquire its pro rata share of the Offered Shares,
             according to the shareholding ratio between the Option Holders
             as of the date immediately prior to sending such notice; and
             (ii) in the event that the Selling Shareholder receives notices
             from Buying Shareholders to buy some, but not all, of the
             Offered Shares, how many additional Offered Shares the Buying
             Shareholder intends to acquire of the Offered Shares remaining
             as a result of the failure of all Buying Shareholders to offer
             to buy their pro rata share (the "Remaining Offered Shares").


      18.4.  If the Selling Shareholder receives notices from all Option
             Holders that they wish to exercise the Option, then the Buying
             Shareholders shall acquire the Offered Shares pro rata,
             according to the shareholding ratio between the Option Holders
             as of the date immediately prior to sending their notices.  If
             the Selling Shareholder receives notices from Buying
             Shareholders to buy some, but not all, of the Offered Shares and
             the notices of the Buying Shareholders indicate that the Buying
             Shareholders intend to buy a number of additional Offered Shares
             equal to or greater than the number of the Remaining Offered
             Shares, then (i) the Buying Shareholders shall each acquire that
             percentage of the Offered Shares which corresponds to its
             percentage ownership of the shares held by the Option Holders as
             of the date immediately prior to sending their notices and (ii)
             the Buying Shareholders shall acquire the Remaining Offered
             Shares pro rata according to the number of additional Offered
             Shares that each Buying Shareholder offered to acquire in its
             notice.  The purchase of the Offered Shares shall be on the same
             terms and conditions as stated in the Notice of Sale.


      18.5.  If the notices of the Buying Shareholders indicate that the
             Buying Shareholders have not elected to purchase all of the
             Offered Shares, then the Selling Shareholder shall be free,
             within 90 days of the date of expiration of the Option, to sell
             such shares at the price and on the terms contained in the
             Notice of Sale.  If there is no sale within such 90 day period,
             the Selling Shareholder shall not


                                      -31-
<PAGE>   32
             sell or transfer the Offered Shares, or any other shares acquired
             before or after the date hereof, without again complying with the
             provisions of this section.


      18.6.  In the event that there is a situation in which fractional shares
             will need to be transferred, the number of shares will be rounded
             up so that only full shares will be transferred.


      18.7.  The provisions of this Section shall terminate on and not apply to
             a Qualified IPO.


      18.8.  Any provision of this Section  to the contrary notwithstanding,
             any offering of  Preferred C Shares shall first be made to the
             other holders of such shares, and the provisions of this
             Section  shall apply to such offering, mutatis mutandis. In the
             event that there shall be any remaining Preferred C Shares which
             will not be purchased as aforesaid, such shares shall be offered
             to the other Shareholders of the Company, as set forth in this
             Section.


      18.9.  Any provision of this Section  to the contrary notwithstanding,
             any offering of  Preferred D Shares shall first be made to the
             other holders of such shares, and the provisions of this
             Section  shall apply to such offering, mutatis mutandis. In the
             event that there shall be any remaining Preferred D Shares which
             will not be purchased as aforesaid, such shares shall be offered
             to the other Shareholders of the Company, as set forth in this
             Section.


      18.10. Any provision of this Section to the contrary notwithstanding, in
             no event shall any transfer of shares of the Company be effected if
             the third party transferee (which is not a shareholder who
             exercised its right of first refusal as set forth herein) is in
             competition, directly or indirectly, with the Company, as
             determined by the Board of Directors of the Company.


            Any transfer of shares of the Company or of any rights associated
            herewith or granted hereunder shall be effective only if such
            transfer is effected in accordance with the provisions of the then
            current Articles of Association of the Company, which relate to the
            transfer of shares of the Company (including the granting of a right
            of first refusal to holders of shares in the Company).


19.   INVESTOR TAG-ALONG RIGHTS.


      19.1.  If (i) any of the Founders or their Permitted Transferees is the
             Selling Shareholder (the "Selling Insider"), (ii) the sale is not
             to a Permitted Transferee of the Founder, and (iii) all of the
             Offered Shares are not sold to the Buying Shareholders pursuant to
             Section 18 above, then the provisions of this Section 19 shall
             apply.


      19.2.  The Selling Insider shall so notify the other Option Holders,
             describing in such notification the material terms of such proposed
             sale. Upon receipt of such


                                      -32-
<PAGE>   33
             notice, each of the other Option Holders shall have the right to
             exercise the option contained in Section 19.3 below.


      19.3.  Each of the other Option Holders shall have the option,
             exercisable by written notice to the Selling Insider, within 10
             business days after receipt of the notice described in Section
             above, to require the Selling Insider to provide as part of his
             proposed sale that each of the other Option Holders be given the
             right to participate, on the same terms and conditions as the
             Selling Insider, in the sale pro rata in proportion to the
             respective numbers of Shares owned at such time by the Selling
             Insider and all Option Holders who participate in the proposed
             sale.


      19.4.  Notwithstanding the aforesaid, if any of the Founders or their
             Permitted Transferees shall sell shares of the Company in a
             transaction or series of transactions which result in a change in
             control of the Company, the Investors shall have the right to
             participate in such transaction and to sell all of their shares in
             the Company in that transaction.


      19.5.  Notwithstanding Sections 19.1 through 19.3, each Founder shall be
             permitted to sell, free of the limitations of Sections through
             19.3, the number of shares which represents 5% of the shares in the
             Company held by the Founder as of August 24, 1998.


      19.6.  The provisions of this Section 19 shall terminate on a Qualified
             IPO.


20. BRING-ALONG.


Notwithstanding anything to the contrary in this Agreement including in Section
18 and 19 herein above, at any time prior to the Company's Qualified IPO, in the
event that (i) one or more bona fide offers from any third party person or
entity (the "Offeror") is made to purchase shares and, (ii) such sale is
conditioned upon the sale of all of the remaining issued shares of the Company
to the Offeror, and (iii) shareholders holding 85% (eighty-five percent) of the
Company's outstanding share capital (the "Proposing Shareholders") propose to
sell all of their shares to such Offeror, then all remaining shareholders (the
"Non-Proposing Shareholders") will be required, if so demanded by the Proposing
Shareholders, to sell their Shares to such Offeror at the same price and upon
the same terms and conditions as in the offer made to the Proposing
Shareholders. In such event, any sale, assignment, transfer, pledge,
hypothecation, mortgage, disposal or encumbrance of shares by the Non-Proposing
Shareholders other than in connection with the proposed acquisition shall be
absolutely prohibited.


21.   INTENTIONALLY  DELETED


22.   AMENDMENT


Any term of this Agreement may be amended and the observance of any term hereof
may be waived (either prospectively or retroactively and either generally or in
a particular instance) with


                                      -33-
<PAGE>   34
the written consent of the Founders and the holders of 75% of each of the issued
and outstanding (i) Preferred A Shares, (ii) Preferred B Shares, (iii) Preferred
C Shares and (iv) Preferred D Shares, of the Company.


23.    MISCELLANEOUS


      23.1.  Further Assurances. Each of the parties hereto shall perform such
             further acts and execute such further documents as may reasonably
             be necessary to carry out and give full effect to the provisions of
             this Agreement and the intentions of the parties as reflected
             thereby.


      23.2.  Governing Law; Jurisdiction. This Agreement shall be governed by
             and construed according to the laws of the State of Israel, without
             regard to the conflict of laws provisions thereof, and the parties
             hereto irrevocably submit to the jurisdiction of the Courts of
             Israel in respect of any dispute or matter arising out of or
             connected with this Agreement.


      23.3.  Successors and Assigns; Assignment. Except as otherwise
             expressly limited herein and as set forth in Section 9 above,
             the provisions hereof shall inure to the benefit of, and be
             binding upon, the successors, assigns, heirs, executors, and
             administrators of the parties hereto. None of the rights,
             privileges, or obligations set forth in, arising under, or
             created by this Agreement may be assigned or transferred without
             the prior consent in writing of each party to this Agreement,
             except as set forth in Section 9 above and except that, upon the
             consummation of a transfer of shares to a Permitted Transferee
             and such Permitted Transferee's agreement in writing to be bound
             by and assume all obligations of the transferor (as a
             Shareholder) under all agreements with the Company, such
             Permitted Transferee shall succeed to all rights and privileges
             of the transferor (as a Shareholder) under this Agreement and
             all other agreements with the Company.


             Without derogating from the provisions of the previous paragraph,
             no assignment or transfer under this Section 23.3 shall be made
             unless the transferee agrees to be bound by all agreements binding
             upon the Shareholders immediately prior to such transfer.


      23.4.  Entire Agreement. This Agreement constitutes the full and entire
             understanding and agreement between the parties with regard to the
             subject matter hereof. This Agreement amends and replaces the SRA.


      23.5.  Section Headings; Preamble. All article and section headings are
             inserted for convenience only and shall not modify or affect the
             construction or interpretation of any provision of this Agreement.
             The preamble to this Agreement is incorporated herein and forms an
             integral part of this Agreement.


      23.6.  Notices, etc. All notices and other communications required or
             permitted hereunder are to be given pursuant to the provisions of,
             and to the addresses set


                                      -34-
<PAGE>   35
             forth in the members' registry of the Company, as may be amended by
             time to time by notice from any Shareholder.


      23.7.  Delays or Omissions. No delay or omission to exercise any right,
             power, or remedy accruing to any party upon any breach or
             default under this Agreement, shall be deemed a waiver of any
             other breach or default theretofore or thereafter occurring. Any
             waiver, permit, consent, or approval of any kind or character on
             the part of any party of any breach or default under this
             Agreement, or any waiver on the part of any party 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 or by
             law or otherwise afforded to any of the parties, shall be
             cumulative and not alternative.


      23.8.  Severability. If any provision of this Agreement is held by a
             court of competent jurisdiction to be unenforceable under
             applicable law, then such provision shall be excluded from this
             Agreement and the remainder of this Agreement shall be
             interpreted as if such provision were so excluded and shall be
             enforceable in accordance with its terms; provided, however,
             that in such event this Agreement shall be interpreted so as to
             give effect, to the greatest extent consistent with and
             permitted by applicable law, to the meaning and intention of the
             excluded provision as determined by such court of competent
             jurisdiction.


      23.9.  Counterparts. This Agreement may be executed in any number of
             counterparts, each of which shall be deemed an original and
             enforceable against the parties actually executing such
             counterpart, and all of which together shall constitute one and the
             same instrument.


      23.10. Waiver of Veto Rights. Except as expressly provided herein, each
             Investor executing this Agreement expressly waives any veto right
             or negative covenant which it possesses in any organ of the Company
             as to any of the matters covered by this Agreement.


      23.11. For purposes of determining the availability of any right or the
             applicability of any limitation under this Agreement, all Preferred
             C Shares, or any other securities, held or acquired by any IIF
             Investor shall be aggregated, and the IIF Investors and any such
             transferees be viewed as a single Investor or shareholder, as
             applicable.



                                      -35-
<PAGE>   36
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
hereinabove set forth.


DEALTIME.COM LTD.                         ISRAEL SEED II L.P.,
                                          By   its   general   partner,   SEED
                                          VENTURE PARTNERS LTD.

By:________________________
Name:                                     By:________________________
Title:                                    Name:
                                          Title:


___________________________               ___________________________
NAHUM SHARFMAN                            AMIR ASHKENAZI


UNICYCLE TRADING COMPANY, L.P.            ODEON CAPITAL PARTNERS, L.P.
                                          By: Odeon Capital, L.L.C

By:________________________
Name:                                     By:________________________
Title:                                    Matthew Smith, Member


M.L. TRUST COMPANY LTD.


By:________________________
Name:
Title:

NOMURA INTERNATIONAL PLC


By:________________________
Name:
Title:


SIGNATURE ON SCHEDULE A OF THIS AGREEMENT BY CERTAIN PARTIES CONSTITUTES
EXECUTION IN FULL OF THIS AGREEMENT


                                      -36-
<PAGE>   37
                 SCHEDULE A TO SHAREHOLDERS RIGHTS AGREEMENT The signature of
each Investor on this Schedule shall constitute execution of
                       this Shareholders Rights Agreement


<TABLE>
<CAPTION>
NAME                                              SIGNATURE

<S>                                            <C>
WaterView Partners, L.P.
                                               By _________________________

Odeon Capital Partners, L.P.
                                               By _________________________

Israel Infinity  Venture Capital Fund
(Israel) LP                                    By _________________________

Israel Infinity  Venture Capital Fund
(Delaware) LP                                  By _________________________

Israel Infinity  Venture Capital Fund
(Cayman I) LP                                  By _________________________

Israel Infinity  Venture Capital Fund
(Cayman II) LP                                 By _________________________

Levitin Charitable Trust
                                               By _________________________


                                               By _________________________


                                               By _________________________


                                               By _________________________
</TABLE>


                                      -37-