Execution
        Copy

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      THIS
        REGISTRATION RIGHTS AGREEMENT (this “Agreement”)is
        made
        as of the 4 day of August 2003, by and among Scopus Network Technologies
        Ltd.,
        an Israeli company (the “Company”)and
        the
        individuals and entities identified in Schedule
        1 attached
        hereto (collectively, the “Shareholders”),

       

      WITNESSETH:

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Series
        A
        Preferred Shares of the Company, nominal value NIS 0.50 (the “Preferred
        A Shares”);and

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Series
        B
        Preferred Shares of the Company, nominal value NIS 0.50 (the “Preferred
        B Shares”which
        together with the Preferred A shares are referred to herein as the “Preferred
        Shares”);and

       

      WHEREAS,
        certain of the Shareholders are the holders of issued and outstanding Ordinary
        Shares of the Company, nominal value NIS 0.50 each (the “Ordinary
        Shares”);and

       

      WHEREAS,
        the Shareholders and the Company desire to set forth certain matters regarding
        the ownership of the shares of the Company;

       

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

       

      
        	
                1.

              	
                Definitions.

              


      

       

      As
        used
        in this Agreement, the following terms have the following meanings:

       

      
        	 	
                1.1.

              	
                “Commission”
                  or “SEC”
                  means the U.S. Securities and Exchange Commission, or any other
                  federal
                  agency at the time administering the Securities Act and the Exchange
                  Act.

              


      

       

      
        	 	
                1.2.

              	
                “Exchange
                  Act”
                  means the Securities Exchange Act of 1934, as amended, or any similar
                  federal statute, and the rules and regulations of the Commission
                  thereunder, all as the same shall be in effect at the
                  time.

              


      

       

      
        	 	
                1.3.

              	
                “Existing
                  Shareholders”
                  means Koor Corporate Venture Capital L.P. and Koor Holdings Ltd.
                  (collectively, “Koor”)
                  and Sadot Research and Development
                  Fund Ltd. (“Sadot”)and
                  their Permitted Transferees, as defined in the Articles of Association
                  of
                  the Company.

              


      

       

      
        	 	
                1.4.

              	
                “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 SEC which permits inclusion or incorporation of substantial
                  information by reference to other documents filed by the Company
                  with the
                  SEC.

              


      

       

      
        	 	
                1.5.

              	
                “Holder”
                  means any holder of outstanding Registrable Securities or shares
                  convertible into Registrable Securities, who acquired such Registrable
                  Securities or shares convertible into Registrable Securities in
                  a
                  transaction or series of transactions not involving any registered
                  public
                  offering.

              


      

       

       

      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
          
            

          

        

        
          
          

        

      

       

      
        	 	
                1.6.

              	
                “Initiating
                  Holders”
                  means Holders holding more than a majority of the Registrable Securities,
                  assuming
                  for purposes of such determination the conversion of all shares
                  convertible into Registrable
                  Securities.

              


      

       

      
        	 	
                1.7.

              	
                “IPO”means
                  an
                  initial
                  underwritten public offering by the Company of its
                  securities.

              


      

       

      
        	 	
                1.8.

              	
                “Ordinary
                  Shares”means
                  Ordinary Shares of the Company, par value NIS 0.50 each.

              


      

       

      
        	 	
                1.9.

              	
                “Preferred
                  A
                  Shares”
                  means Series A Preferred Convertible Shares of the Company, par
                  value
                  NIS 0.50 each.

              


      

       

      
        	 	
                1.10.

              	
                “Preferred
                  B
                  Shares”
                  means Series B Preferred Convertible Shares of the Company,
                  par value NIS 0.50 each.

              


      

       

      
        	 	
                1.11.

              	
                “Preferred
                  Shares”means
                  the Preferred
                  A Shares and the Preferred B
                  Shares.

              


      

       

      
        	 	
                1.12.

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

              


      

       

      
        	 	
                1.13.

              	
                “Registrable
                  Securities” means all of the following to the extent the same have not
                  been sold to the public: (i) any and all Ordinary Shares of the
                  Company
                  issuable upon conversion of the Preferred Shares including without
                  limitation any shares that the holders of the Preferred Shares
                  (the
                  “Preferred Holders”) may hereafter purchase pursuant to
                  their preemptive rights, rights of first refusal or otherwise and
                  all
                  Ordinary Shares issued on conversion or exercise of other securities
                  purchased or granted to the Preferred Holders by virtue of the
                  Preferred
                  Shares; and (ii) any and all Ordinary Shares held by the Existing
                  Shareholders on the date of January 15, 2001; and (iii) shares
                  issued in
                  respect of shares referred to in (i) or (ii) above in any reorganization;
                  and (iv) shares issued in respect of the shares referred to in
                  (i), (ii)
                  or (iii) as a result of a share split, share dividend, recapitalization
                  or
                  combination. Notwithstanding the foregoing, Registrable Securities
                  shall
                  not include Registrable Securities (i) sold by a person in a transaction
                  in which his rights under this Agreement are not properly assigned;
                  or
                  (ii) the registration rights associated with such securities have
                  been
                  terminated pursuant to this
                  Agreement.

              


      

       

      
        	 	
                1.14.

              	
                “Securities
                  Act”
                  means the Securities Act of 1933, as amended, or any similar federal
                  statute, and the rules and regulations of the Commission thereunder,
                  or a government or any agency or political subdivision
                  thereof.

              


      

      
         

      

      
        	
                2.

              	
                Incidental
                  Registration.

              


      

       

      
        	 	
                2.1.

              	
                If
                  the Company at any time or from time to time proposes to register
                  any of
                  its securities, including
                  at
                  the IPO, other than in a demand registration under Section 3 of
                  this
                  Agreement, it shall give notice to the Holders of such intention.
                  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 shares indicated in such request, so as to permit the disposition
                  of
                  the shares so registered.

              


      


      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
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                2.2.

              	
                Notwithstanding
                  any other provision of this Section 2, if the managing underwriter
                  advises
                  the Company in writing that marketing factors require a limitation
                  of the
                  number of shares to be underwritten, then there shall be excluded
                  from
                  such registration and underwriting to the extent necessary to satisfy
                  such
                  limitation, shares held by the Holders, pro
                  rata to
                  the respective total number of shares held by each of the Holders;
                  provided
                  however, that
                  the Preferred Holders shall
                  have
                  preference over all other shareholders of the Company (including
                  the
                  Existing Shareholders) to register and to sell up to 80% (eighty
                  percent)
                  of the shares to be registered within such
                  registration.

              


      

       

      
        	 	
                2.3.

              	
                The
                  Holders shall be entitled to participate in an unlimited number
                  of
                  registrations under this Section 2.

              


      

       

      
        	
                3.

              	
                Demand
                  Registration.

              


      

       

      
        	 	
                3.1.

              	
                At
                  any time beginning six (6) months following the IPO, the Initiating
                  Holders may request in writing that all or part of their Registrable
                  Securities shall be registered for trading on any securities exchange
                  on
                  which the Company’s shares are otherwise traded, if at all. Within twenty
                  (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 Securities held by all such Holders
                  who
                  wish to participate in such demand registration and provide the
                  Company
                  with written requests for inclusion therein within fifteen (15)
                  days after
                  the receipt of the Company’s notice. Thereupon, the Company shall effect
                  the registration of all Registrable Securities as to which it has
                  received
                  requests for registration for trading on the securities exchange
                  specified
                  in the request for registration. Notwithstanding any other provision
                  of
                  this Section 3, if the managing underwriter advises the Company
                  in writing
                  that marketing factors require a limitation of the number of shares
                  to be
                  underwritten, then there shall be excluded from such registration
                  and
                  underwriting to the extent necessary to satisfy such limitation,
                  first, shares other than Registrable Securities and other than
                  shares to be issued by the Company, on a pro rata basis, second,
                  shares which the Company may wish to register for its own
                  account,
                  and third, to the extent necessary, Registrable Securities
                  (pro rata to the number of such shares sought to be included by
                  each Holder in the offering), provided, however, that
                  the Preferred Holders shall have preference over all other shareholders
                  of
                  the Company (including the Existing Shareholders) to register and
                  to sell
                  up to 80% (eighty percent) of the shares to be registered within
                  such
                  registration and further provided that in any event all Registrable
                  Securities shall be included in such registration prior to any
                  other
                  shares of the Company.

              


      

       

      
        	 	
                3.2.

              	
                The
                  Company shall not be required to effect more than two (2) registrations
                  at
                  the request of the Initiating Holders under this Section
                  3.

              


      

       

      
        	 	
                3.3.

              	
                In
                  the event that an exclusion of Registrable Securities is required,
                  the
                  majority of the Initiating Holders shall be entitled to elect that
                  all
                  Registrable Securities will be withdrawn from the registration,
                  by written
                  notice to the Company and the underwriter, in which case such registration
                  shall
                  not
                  be counted under Section 3.2.

              


      


      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
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                4.

              	
                Form
                  S-3.

              


      

       

      If
        the
        Company becomes eligible to use Form S-3, the Company shall use its best
        efforts
        to continue to qualify at all times for registration on such form. If and
        when
        the Company becomes entitled to use Form S-3, Holders who wish to register
        shares having a reasonable anticipated aggregate selling price of at least
        $750,000, shall have the right to request and have effected an unlimited
        number
        of registrations on such form. Such requests shall be in writing and shall
        state
        the number of shares of Registrable Securities to be disposed of and the
        intended method of disposition of such shares by such Holder or Holders.
        The
        Company shall give notice to the other Holders of the receipt of a request
        for
        registration pursuant to this Section 4 and shall provide a reasonable
        opportunity for such Holders to participate in the registration.

       

      
        	 	
                4.2.

              	
                Subject
                  to the foregoing, the Company will effect the registration of all
                  Registrable Securities on Form S-3 to the extent requested by the
                  Holder
                  or Holders thereof for purposes of disposition. If the Company
                  shall
                  furnish Holders requesting a registration pursuant to this Section
                  4 a
                  certificate signed by the Company’s Chief Executive Officer and Chairman
                  of the Board stating that in the good faith judgment of the Board
                  of
                  Directors of the Company, it would be seriously detrimental to
                  the Company
                  and its shareholders for such registration to be effected at such
                  time,
                  the Company shall have the right to defer such filing for a period
                  of not
                  more than sixty (60) days after receipt of the request of the requesting
                  Holders, provided that such a right to delay a request shall be
                  exercised
                  by the Company not more than once in any twelve (12) month
                  period.

              


      

       

      
        	 	
                4.3.

              	
                Notwithstanding
                  any other provision of this Section 4, if the managing underwriter
                  advises
                  the Company in writing that marketing factors require a limitation
                  of the
                  number of shares to be underwritten, then there shall be excluded
                  from
                  such registration and underwriting to the extent necessary to satisfy
                  such
                  limitation, first, shares other than Registrable Securities and
                  other than shares to be issued by the Company, on a pro rata
                  basis, second, shares which the Company may wish to register
                  for its own account, and third, to the extent necessary,
                  Registrable Securities (pro rata to the number of such shares
                  sought to be included by each Holder in the offering),
                  provided, however, that the Preferred Holders shall
                  have preference over all other shareholders of the Company (including
                  the
                  Existing Shareholders) to register and to sell up to 80% (eighty
                  percent)
                  of the shares to be registered within such registration and further
                  provided that that in any event all Registrable Securities shall
                  be
                  included in such registration prior to any other shares of the
                  Company.

              


      

       

      
        	 	
                4.4.

              	
                The
                  Holders shall be entitled to participate in an unlimited
                  number of registrations under this Section
                  4.

              


      

       

      
        	
                5.

              	
                Designation
                  of Underwriter.

              


      

       

      
        	 	
                5.1.

              	
                In
                  the case of any registration effected pursuant to Sections 3 and
                  4, (i)
                  the majority of the Holders participating therein shall have the
                  right to
                  designate the managing underwriter(s) in any underwritten offering,
                  who
                  shall be a prominent and reputable underwriter, with the approval
                  of the
                  Company, which may not be unreasonably withheld, and (ii) the Company
                  and
                  all Holders participating in such underwritten registration shall
                  enter
                  into an underwriting agreement in customary form with the underwriter
                  or
                  underwriters selected for such
                  underwriting.

              


      


      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
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                5.2.

              	
                In
                  the case of any registration initiated by the Company, the Company
                  shall
                  have the right to designate the managing underwriter(s) in any
                  underwritten offering, and any Holders participating in such underwritten
                  registration shall enter into an underwriting agreement in customary
                  form
                  with the underwriter or underwriters selected for such
                  underwriting.

              


      

       

      
        	
                6.

              	
                Registration
                  Expenses.

              


      

       

      In
        the
        event of a registration described in Sections 2, 3, and 4, all reasonable
        expenses of registration and offering of the Holders participating in the
        offering including, but not limited to, printing expenses, filing and
        qualifications costs, fees and disbursements of counsel for the Holders,
        and
        independent public accountants, fees and expenses (including counsel fees
        incurred in connection with complying with state securities or “blue sky” laws,
        fees of the NASDAQ and fees of transfer
        agents
        and registrars), shall be borne by the Company, except that the Holders shall
        bear their pro rata underwriting commissions and fees and discounts attributable
        to their Registrable Securities being registered.

       

      
        	
                7.

              	
                Indemnification.

              


      

       

      In
        the
        event any shares are included in a registration statement in accordance
        herewith:

       

      
        	 	
                7.1.

              	
                To
                  the extent permitted by law, the Company will indemnify and hold
                  harmless
                  each one of the Holders, the partners, officers, directors and
                  shareholders of each one of the Holders, , any underwriter (as
                  defined in
                  the Securities Act) for such Holder and each person, if any, who
                  controls
                  such Holder or underwriter within the meaning of the Securities
                  Act or the
                  Exchange Act against any losses, expenses, claims, damages, or
                  liabilities
                  to which they become subject under the Securities Act, the Exchange
                  Act or
                  other United States federal or state laws, insofar as such losses,
                  expenses, claims, damages, or liabilities (or actions in respect
                  thereof)
                  arise out of or are based upon any of the following statements,
                  omissions
                  or violations (collectively a “Violation”):(i) any untrue statement of
                  a material fact contained in such
                  registration statement, final prospectus or any amendments or supplements
                  thereto; (ii) the omission or alleged omission to state therein
                  a material
                  fact required to be stated therein, or necessary to make the statements
                  therein not misleading in light of the circumstances under which
                  they were
                  made, or (iii) any violation or alleged violation by the Company
                  of the
                  Securities Act, the Exchange Act, any Federal or state securities
                  law or
                  any rule or regulation promulgated under the Securities Act, the
                  Exchange
                  Act or any federal or state securities law, or any rule or regulation
                  thereunder; and the Company will reimburse each such Holder, partner,
                  officer, director, shareholder, underwriter or controlling person
                  for any
                  legal or other expenses reasonably incurred by them in connection
                  with
                  investigating or defending any such loss, claim, damage, liability,
                  or
                  action, as such expenses are incurred;
                  provided, however, that the indemnity agreement
                  contained in this Section 7.1, shall not apply to amounts paid
                  in
                  settlement of any such loss, claim, damage, liability, or action
                  if such
                  settlement is effected without the consent of the Company (which
                  consent
                  shall not be unreasonably withheld), nor shall the Company be liable
                  to
                  each such Holder, partner, officer, director, shareholder, underwriter
                  or
                  controlling person in any such case for any such loss, claim, damage,
                  liability, or action to the extent that it arises out of or is
                  based upon
                  a Violation which occurs in reliance upon and in conformity with
                  written
                  information furnished to the Company expressly for use in connection
                  with
                  such registration by any such Holder, partner, officer, director,
                  shareholder, underwriter or controlling
                  person.

              


      


      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
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                7.2.

              	
                To
                  the extent permitted by law, each selling Holder will indemnify
                  and hold
                  harmless the Company, each of its directors, each of its officers
                  who have
                  signed the registration statement, each person, if any, who controls
                  the
                  Company within the meaning of the Securities Act, any underwriter
                  (within
                  the meaning of the Securities Act) for the Company, any person
                  who
                  controls such underwriter, and any Holder selling securities in
                  such
                  registration statement or any directors or officers or any persons
                  controlling such parties, against any losses, claims, expenses,
                  damages
                  (including any amounts paid in any settlement effected with the
                  consent of
                  all of the selling shareholders), or liabilities to which any of
                  the
                  forgoing persons become subject under the Securities Act, the Exchange
                  Act
                  or other United States federal or state securities law, insofar
                  as such
                  losses, expenses, claims, damages, liabilities (or actions in respect
                  thereto) arise out of or are based upon any Violation (including
                  any
                  alleged Violation) in each case to the extent (and only to the
                  extent)
                  that such Violation occurs in reliance upon and in conformity with
                  written
                  information furnished to the Company by such Holder expressly for
                  use in
                  connection with such registration; and each such Holder will reimburse
                  any
                  persons intended to be indemnified pursuant to this Section 7.2
                  for any
                  legal or other expenses reasonably incurred by such person in connection
                  with investigating or defending any such loss, claim, damage, liability
                  or
                  action; provided, however, that the indemnity agreement
                  contained in this Section 7.2 shall not apply to amounts paid in
                  settlement of any such loss, claim, damage, liability or action
                  if such
                  settlement is effected without the consent of the relevant indemnifying
                  Holder(s), which consent shall not be unreasonably withheld; and
                  further provided, that in no event shall any indemnity by any Holder
                  under this Section 7.2 exceed the gross proceeds from the offering
                  received by such Holder; and provided further, that this
                  indemnity shall not relieve any underwriter any of its due diligence
                  obligations.

              


      

       

      
        	 	
                7.3.

              	
                Promptly
                  after receipt by an indemnified party under this Section 7.3 of
                  notice of
                  the commencement of any action (including any governmental action),
                  such
                  indemnified party will, if a claim in respect thereof is to be
                  made
                  against any indemnifying party under this Section 7, notify the
                  indemnifying party in writing of the commencement thereof and the
                  indemnifying party shall have the right to participate in, and,
                  to the
                  extent the indemnifying party so desires, jointly with any other
                  indemnifying party similarly noticed, to assume the defense thereof
                  with
                  counsel mutually satisfactory to the parties;
                  provided, however, that an indemnified party (together
                  with all other indemnified parties that may be represented without
                  conflict by one counsel) shall have the right to retain its one
                  separate
                  counsel, with the reasonable fees and expenses to be paid by the
                  indemnifying party, if representation of such indemnified party
                  by the
                  counsel retained by the indemnifying party would be inappropriate
                  due to
                  actual or potential differing interests between such indemnified
                  party and
                  any other party represented by such counsel in such proceeding.
                  The
                  failure to notify an indemnifying party in writing within a reasonable
                  time of the commencement of any such action, if materially prejudicial
                  to
                  its ability to defend such action, shall relieve such indemnifying
                  party
                  of any liability to the indemnifying party under this Section 7,
                  but the
                  omission to so deliver written notice to the indemnifying party
                  will not
                  relieve it of any liability that it may have to any indemnified
                  party
                  otherwise than under this Section
                  7.

              


      


      
        
          Scopus
            -Registration Rights Agreement -August 4, 2003

          
          

        

        
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                7.4.

              	
                If
                  the indemnification provided for in this Section 7 is held by a
                  court of
                  competent jurisdiction to be unavailable to an indemnified party
                  with
                  respect to any loss, liability, claim, damage or expense referred
                  to
                  herein, then the indemnifying party, in lieu of indemnifying such
                  indemnified party hereunder, shall contribute to the reasonable
                  amount
                  paid or payable by such indemnified party as a result of such loss,
                  liability, claim, damage or expense in such proportion as is appropriate
                  to reflect the relative fault of the indemnifying party on the
                  one hand
                  and of the indemnified party on the other in connection with the
                  statements or omissions that resulted in such loss, liability,
                  claim,
                  damage or expense, as well as any other relevant equitable considerations.
                  The relative fault of the indemnifying party and of the indemnified
                  party
                  shall be determined by reference to, among other things, whether
                  the
                  untrue or alleged untrue statement of a material fact or the omission
                  to
                  state a material fact relates to information supplied by the indemnifying
                  party or by the indemnified party and the parties’ relative intent,
                  knowledge, access to information, and opportunity to correct or
                  prevent
                  such statement or omission.

              


      

       

      
        	 	
                7.5.

              	
                Notwithstanding
                  the foregoing, to the extent that the provisions relating to
                  indemnification and contribution contained in the underwriting
                  agreement
                  entered into in connection with the underwritten public offering
                  are in
                  conflict with the foregoing provisions, the provisions in the underwriting
                  agreement shall control.

              


      

       

      
        	 	
                7.6.

              	
                The
                  obligations of the Company and the Holders under this Section 7
                  shall
                  survive the completion of any offering of Registrable Shares in
                  a
                  registration statement under this
                  Agreement.

              


      

       

      
        	
                8.

              	
                Obligations
                  of the Company.

              


      

       

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

       

      
        	 	
                8.1.1.

              	
                prepare
                  and file with the SEC a registration statement with respect to
                  such
                  Registrable Securities and shall use its best efforts to cause
                  such
                  registration statement to become effective, and, upon the request
                  of the
                  holders of a majority of the Registrable Securities registered
                  thereunder,
                  keep such registration statement effective for a period of up to
                  nine (9)
                  months or, if sooner, until the distribution contemplated in the
                  registration statement has been
                  completed.

              


      

       

      
        	 	
                8.1.2.

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

              


      

       

      
        	 	
                8.1.3.

              	
                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 Securities owned
                  by
                  them.

              


      


      
        
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                8.1.4.

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

              


      

       

      
        	 	
                8.1.5.

              	
                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.

              


      

       

      
        	 	
                8.1.6.

              	
                notify
                  each Holder 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.

              


      

       

      
        	 	
                8.1.7.

              	
                cause
                  all Registrable Securities registered pursuant thereunder to be
                  listed on
                  each securities exchange on which similar securities issued by
                  the Company
                  are then listed.

              


      

       

      
        	 	
                8.1.8.

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

              


      

       

      
        	 	
                8.1.9.

              	
                furnish,
                  at the request of any Holder requesting registration of Registrable
                  Securities pursuant to this Agreement, on the date that such Registrable
                  Securities 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 Holder and to the
                  underwriters, if any, and (ii) a letter dated such date, from the
                  independent certified public accountant 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 Holder and to the underwriters, if
                  any.

              


      


      
        
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                9.

              	
                Rule
                  144 Reporting.

              


      

       

      With
        a
        view to making available to the Holders the benefits of SEC Rule 144 promulgated
        under the Securities Act and any other rule or regulation of the SEC that
        may at
        any time permit a Holder to sell securities of the Company to the public
        without
        registration or pursuant to a registration on Form S-3 (for purposes hereof,
        collectively, “Rule
        144”),the
        Company agrees to:

       

      
        	 	
                9.1.

              	
                use
                  its best efforts to make and keep public information available,
                  as those
                  terms are understood and defined in Rule 144, at all times after
                  the
                  effective date of the IPO;

              


      

       

      
        	 	
                9.2.

              	
                use
                  its best efforts to file with the SEC in a timely manner all reports
                  and
                  other documents required by the Company under the Securities Act
                  and the
                  Exchange Act; and

              


      

       

      
        	 	
                9.3.

              	
                furnish
                  to any Holder, so long as the Holder owns any Registrable Securities,
                  forthwith upon request: (i) a written statement by the Company
                  that it has
                  complied with the foregoing subsections 9.1 and 9.2, and with any
                  other
                  reporting requirements of the 1934 Act which may apply; (ii) a
                  copy of the
                  most recent annual or quarterly report of the Company and such
                  other
                  reports and documents so filed by the Company, and (iii) such other
                  information as may be reasonably requested in availing any Holder
                  of any
                  rule or regulation of the SEC permitting the selling of any such
                  securities without registration or pursuant to such
                  form.

              


      

       

      
        	
                10.

              	
                Assignment
                  of Registration Rights.

              


      

       

      Any
        of
        the Holders may assign its rights
        to
        cause
        the Company to register shares pursuant to this Agreement to a transferee
        or
        transferees of all or any part of its Registrable Securities, and such
        transferor shall use its best efforts to furnish the Company within twenty
        (20)
        days after such transfer with written notice of the name and address of such
        transferee and the securities with respect to which such registration rights
        are
        being assigned, and the transferee’s written agreement to be bound by this
        Agreement.

       

      
        	
                11.

              	
                Subsequent
                  Grants of Rights.

              


      

       

      The
        Company shall not grant registration rights that are more favorable than
        the
        registration rights granted herein, to any shareholder of the Company (excluding
        the rights granted to the Holders herein), unless such grant of registration
        rights was approved in accordance with the provisions of Section 16.2 below
        relating to amendment termination or waiver of any term of this
        Agreement.


      
        
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                12.

              	
                Lock-Up.

              


      

       

      In
        any
        registration of the Company’s shares, the Holders agree that any sales of shares
        held by them may be subject to a “lock-up” period restricting such sales for up
        to six (6) months following the IPO or 3 months for any other registration
        and
        the Holders will agree to abide by such customary “lock-up” period within the
        foregoing time limits as is required by the underwriter in such registration
        and
        to execute such customary form of “lock-up” agreement as may be requested by the
        underwriter, provided
        that all
        directors and officers of the Company also agree to be abide by such “lock up”.
        Any discretionary release from the lock-up shall be allocated to the holders
        of
        Registrable Securities on a pro-rata basis.

       

      
        	
                13.

              	
                Registrations
                  outside the US.

              


      

       

      The
        provisions of this Agreement shall also apply in connection with any
        registration, listing or public offering of the Company’s securities outside of
        the U.S., mutatis
        mutandis.

       

      
        	
                14.

              	
                Governing
                  Law and Jurisdiction; Remedies.

              


      

       

      
        	 	
                14.1.

              	
                This
                  Agreement shall be governed by and interpreted in accordance with
                  the laws
                  of the State of Israel, without giving effect to the rules respecting
                  conflict of law.

              


      

       

      
        	 	
                14.2.

              	
                In
                  the event of any controversy or claim arising under, out of, or
                  in
                  connection with this Agreement, its validity, its interpretation,
                  its
                  execution or any breach or claimed breach thereof (a “Claim”),the
                  Company and the Holders undertake to attempt to amicably resolve
                  the Claim
                  internally. In the event such attempt does not succeed within 30
                  days, as
                  determined by the Company or any of the Holders, the Company or
                  any of the
                  Holders shall be entitled to exercise any available remedy under
                  law.

              


      

       

      
        	 	
                14.3.

              	
                Any
                  Claim shall be settled by a single arbitrator, selected by mutual
                  consent
                  and, failing such consent, the arbitrator shall be Yigal Arnon,
                  Adv., and
                  if he shall not accept the appointment, Ram Caspi, Adv., and if
                  he shall
                  not accept the appointment, Ya’akov Ne’eman, Adv. (the “Arbitrator”).
                  The Arbitrator shall confirm that he is not related to a party
                  to the
                  Claim. The arbitration shall take place in Tel Aviv, Israel, in
                  the Hebrew
                  language. The Arbitrator shall be exempt from the civil procedure
                  rules
                  and the rules of evidence, but shall be bound by substantive law
                  and by
                  the duty of citing grounds for his ruling, and he shall have to
                  hand down
                  his decision with respect to the dispute within ninety (90) days
                  of the
                  date on which the dispute was submitted to him. The Arbitrator
                  shall
                  be
                  authorized to issue injunctions and interim orders. The execution
                  of this
                  Agreement by the parties shall
                  be
                  deemed the execution of an arbitration agreement as required by
                  the
                  Israeli Arbitration Law, 5728-1968.

              


      

       

      
        	 	
                14.4.

              	
                In
                  the event that none of the aforesaid persons shall accept the appointment
                  as Arbitrator, the competent courts in Tel Aviv shall have sole
                  and
                  exclusive jurisdiction over any dispute between the parties, as
                  set forth
                  above.

              


      

       

      
        	 	
                14.5.

              	
                In
                  case any one or more of the covenants and/or agreements set forth
                  in this
                  Agreement shall have been breached by any party hereto, the other
                  parties
                  may proceed to protect and enforce their rights either by suit
                  in equity,
                  including an action for specific performance, injunctive relief
                  and other
                  forms of equitable relief (without posting any bond and without
                  proving
                  that damages would be inadequate) of any such covenant or agreement
                  contained in this Agreement. All remedies hereunder shall be cumulative
                  and the election of any one remedy shall not preclude any other
                  remedy.

              


      


      
        
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                15.

              	
                Notices.
                  Any notice, declaration or other communication required or authorized
                  to
                  be given by any party under this Agreement to any other party shall
                  be in
                  writing and shall be personally delivered, sent by facsimile transmission
                  (with telephone confirmation) or dispatched by courier addressed
                  to the
                  other party at the address stated below or such other address as
                  shall be
                  specified by the parties hereto by notice in accordance with the
                  provisions of this Section. Any notice shall operate and be deemed
                  to have
                  been served, if personally delivered or sent by fax on the next
                  following
                  business day, and if by courier, on the fifth following business
                  day:

              


      

       

      
        	 	
                15.1.

              	
                The
                  Company’s address for the purposes of this Section 15 shall be the address
                  set forth in the preamble hereto, with a copy
                  to:

              


      

       

      Zysman,
        Aharoni, Gayer & Co. Advocates

      52A
        Hayarkon St., Tel Aviv

      63432,
        Israel

      Fax:
        +972-3-7955550

      Attn:
        Shy
        Baranov, Adv.

       

      
        	 	
                15.2.

              	
                The
                  Holders’ addresses for the purposes of this Section 11 shall be the
                  addresses set
                  forth in Schedule 1 hereto, with a copy
                  to:

              


      

       

      Danziger,
        Klagsbald, Rosen & Co.

      28
        Bezalel Street

      Ramat
        Gan
        52521, Israel

      Fax:
        972+3-611-0707

      Attn:
        Joeri Kreisberg, Adv.

       

      
        	
                16.

              	
                Miscellaneous.

              


      

       

      
        	 	
                16.1.

              	
                This
                  Agreement constitutes the entire agreement between the parties
                  with regard
                  to the subject matter hereof and supersedes any previous agreement
                  among
                  the parties with respect to such subject matter, including without
                  limitation, Exhibit 12 to that certain Shareholders Agreement,
                  dated January 15, 2001.

              


      

       

      
        	 	
                16.2.

              	
                Any
                  term of this Agreement may be amended, terminated or waived only
                  with the
                  consent of the holders of a majority of 75% (seventy five percent)
                  of the
                  Preferred Shares (for purposes of this sub-clause 16.2, and only
                  for
                  purposes
                  hereof, the term “Preferred Shares” shall also include the holdings of
                  Koor and Sadot (and their Permitted Transferees), so that Koor
                  and Sadot
                  shall be considered as part of the holders of Preferred Shares),
                  and the
                  Company and evidenced by a document in writing specifically referring
                  to
                  this Agreement.

              


      

       

      
        	 	
                16.3.

              	
                The
                  failure or delay of either party hereto at any time or times to
                  require
                  performance
                  of
                  any provisions hereof shall in no manner affect this right at a
                  later
                  time. No waiver by any party hereto of a breach of any term contained
                  in
                  this Agreement, in any one or more instance, shall be deemed or
                  construed
                  as a further or continuing waiver of any such breach or a waiver
                  of a
                  breach of any other form.

              


      


      
        
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                16.4.

              	
                The
                  rights and duties of each Holder as set forth herein may be freely
                  assigned, in whole or in part, by such shareholder subject only
                  to any
                  limitations applying to the transfer of shares by such shareholder,
                  as set
                  forth herein or in the Articles of Association of the
                  Company.

              


      

       

      
        	 	
                16.5.

              	
                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.

              


      

       

      
        	 	
                16.6.

              	
                For
                  purposes of computing any minimum shareholding required for any
                  purposes
                  under this Agreement, each Preferred Holder and its Permitted Transferees
                  (as such term is defined in the Articles of Association of the
                  Company)
                  shall be entitled to aggregate their holdings in order to be considered
                  one shareholder.

              


      

       

      
        	 	
                16.7.

              	
                Each
                  of the parties shall take such actions, including the execution
                  and
                  delivery of further instruments and voting its shares in the Company,
                  as
                  may be necessary to give full effect to the provisions hereof and
                  to the
                  intent of the parties hereto.

              


      

       

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      Schedule
        1

       

      


      
        	
                Investor

                 

              	
                Address

              
	
                Koor
                  Holdings

              	
                14
                  Hamelacha Street, Rosh Ha’Ayin 48091, Israel

              
	 	 
	
                Koor
                  Corporate Venture Capital
                  L.P.

              	
                14
                  Hamelacha Street, Rosh Ha’Ayin 48091, Israel

              
	 	 
	
                Sadot
                  Research and Development

                Fund
                  Ltd

              	
                Moshe
                  Aviv Tower, 7 Jabotinsky St. Ramat Gan

                52117,
                  Israel

              
	 	 
	
                David
                  Mahlab

              	
                10
                  Ha’amal Street, Rosh Ha’Ayin, Israel

              
	 	 
	
                Formula
                  Venture II L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Formula
                  Ventures Israel II L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Formula
                  Ventures II (A.I.) L.P.

              	
                11
                  Galgalei Ha’Plada St., Hertzliya, 46733

              
	 	 
	
                Shrem,
                  Fudim, Kelner Trust Co. Ltd

              	
                21
                  Haarbaa St., Tel Aviv 64739

              
	 	 
	
                Yossi
                  Vardi

              	
                12
                  Shamir St., Tel Aviv 69693

              
	 	 
	
                Catalyst
                  Investments L.P.

              	
                3
                  Daniel Frish St., Tel Aviv 64731

              
	 	 
	
                Vertex
                  Israel II (A) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (CI) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (B) Fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II Discount fund L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Vertex
                  Israel II (C.I.) Executive Fund

                L.P.

              	
                11
                  Hashikma St., Savyon 56530

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Sub) LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Sub) Non-Q LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                (Israeli
                  Investors) LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Principals Fund III (Israel)

                LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  Venture Capital Fund III

                Trusts
                  2000 Ltd.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Pitango
                  JP Morgan Fund III (Israel)

                LP

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Genesis
                  Partners II L.D.C.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Genesis
                  Partners II (Israel) L.P.

              	
                11
                  HaMenofim St. Bldg. B, Herzliya 46725

              
	 	 
	
                Zohar
                  Zisapel

              	
                24
                  Raul Wallenberg St., Tel Aviv

              


      

       

      


      
        
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