SHARE PURCHASE AGREEMENT



                          DATED AS OF NOVEMBER 29, 2001

                                      AMONG

                          DECISION SYSTEMS ISRAEL LTD.

                          DATA SYSTEMS & SOFTWARE INC.

                             ENDAN IT SOLUTIONS LTD.

                           KARDAN COMMUNICATIONS LTD.

                            NEUWIRTH INVESTMENTS LTD.

                              JACOB NEUWIRTH (NOY)

                                       AND

                  ADV. YOSSI AVRAHAM, AS TRUSTEE FOR MEIR GIVON



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<PAGE>

                            SHARE PURCHASE AGREEMENT

     This Share Purchase  Agreement (this  "Agreement") is made and entered into
this 29th day of November,  2001,  by and among Data Systems & Software  Inc., a
Delaware corporation ("DSSI"), Decision Systems Israel Ltd., a company organized
under the laws of Israel and a wholly owned subsidiary of DSSI ("DSI"), Endan IT
Solutions  Ltd.,  a  company  under  the  laws  of  Israel   ("Endan"),   Kardan
Communications  Ltd., a company  organized under the laws of Israel  ("Kardan"),
Neuwirth  Investments Ltd., a company organized under the laws of Israel, ID No.
513164616  ("Neuwirth  Investments"),  Jacob  Neuwirth  ("Noy"),  and Adv. Yossi
Avraham as trustee for the  benefit of Meir Givon  ("Givon")  (Kardan,  Neuwirth
Investments and Givon, are each, individually,  a "Shareholder" and collectively
the "Shareholders").

     WHEREAS,  each of the  Shareholders  owns the number of the issued ordinary
shares of Endan, nominal value NIS 1.00 per share (collectively,  the "Shares"),
set  opposite its name in Schedule  3.2 hereto,  which  Shares in the  aggregate
represent all of the issued and outstanding shares of Endan;

     WHEREAS, the Shareholders desire to sell 594 Shares to DSI in consideration
for (i)  $500,000  in cash (the "Cash  Consideration"),  and (ii) such number of
shares of Common  Stock of DSSI,  par value $0.01  each,  that is equal to $2.25
million divided by the Market Price (as defined below) (the "DSSI Shares");

     WHEREAS, the Shareholders desire to sell the remaining 437 Shares to DSI in
consideration for the issuance by DSI to the Shareholders of 3,668,912  Ordinary
Shares (the "DSI  Shares"),  such that DSI shall after such sale own 100% of the
issued and outstanding Shares;

     WHEREAS,  to assist DSI in its  purchase of the Shares,  DSSI has agreed to
(i)  repay  certain  of its  existing  indebtedness  to DSI,  and (ii)  extend a
shareholders  loan to DSI in the amount of $2.75 million less the amount of such
existing  indebtedness,  through  the  transfer  or  issuance to DSI of the DSSI
Shares and the Cash Consideration; and

     WHEREAS,  DSSI desires to extend an additional  shareholder  loan to DSI in
the  amount of $1 million  for the  purpose  of  providing  Endan with a loan at
Closing in the amount of $1 million which Endan will use to repay certain of its
indebtedness to Kardan.

     NOW,   THEREFORE,   in   consideration   of  the  foregoing   recitals  and
representations,  warranties and covenants  herein set forth, the parties hereto
agree as follows:

<PAGE>

                                    ARTICLE I

                                   Definitions

1.1.    Defined  Terms.  As used in this  Agreement,  the  terms  listed in this
        Section 1.1 shall have the following meanings:

"2001 DSI Stock Option Plan"            Shall have the meaning  ascribed to such
                                        term in Section 2.3 hereof;

"Act"                                   Shall mean the United States  Securities
                                        Act of 1933, as amended;

"Additional Amount"                     Shall have the meaning  ascribed to such
                                        term in Section 10.5 hereof;

"Additional Shares"                     Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereof;

"Affiliate"                             Shall   mean,   with   respect   to  any
                                        specified  person:  (i) any other person
                                        directly  or   indirectly   controlling,
                                        controlled  by or under  common  control
                                        with  such  specified  person;  (ii) any
                                        other  person  that  owns,  directly  or
                                        indirectly,   50%  or   more   of   such
                                        specified  person's  capital  stock,  or
                                        (iii)  any other  person  50% or more of
                                        the    voting    stock   of   which   is
                                        beneficially  owned or held  directly or
                                        indirectly by such specified person. For
                                        the   purposes   of   this   definition,
                                        "control"  when used with respect to any
                                        specified  person  means  the  power  to
                                        direct the  management  and  policies of
                                        such  person,  directly  or  indirectly,
                                        whether  through   ownership  of  voting
                                        securities,  by contract  or  otherwise;
                                        and   the   terms    "controlling"   and
                                        "controlled"  have meanings  correlative
                                        to the foregoing;

"Agreement"                             Shall have the meaning  ascribed to such
                                        term in the Recitals ;

"Annual Budget"                         Shall have the meaning  ascribed to such
                                        term in Section 10.2.3 hereof;

"Bank"                                  Shall have the meaning  ascribed to such
                                        term in Section 10.14 hereof;

"Bring Along Sale"                      Shall have the meaning  ascribed to such
                                        term in Section 10.8 hereof;

"Business Day"                          Sunday to Thursday,  inclusive, with the
                                        exception of holidays and official  days
                                        of rest in the State of Israel;

"Buyer"                                 Shall  have  the   respective   meanings
                                        ascribed to such term in  Sections  10.6
                                        and 10.8 hereof, as applicable;

"Cash Consideration"                    Shall have the meaning  ascribed to such
                                        term in the Recitals;

"Closing Date"                          Shall have the meaning  ascribed to such
                                        term in Section 3.5 hereof;

"Closing"                               Shall have the meaning  ascribed to such
                                        term in Section 3.5 hereof;

"Common Stock"                          Shall  mean  the  Common  Stock of DSSI,
                                        with par value of $0.01 per share;

"Constitutional Documents"              Shall mean,  with  respect to an Israeli
                                        company,  such  company's  Memorandum of
                                        Association  (if  any) and  Articles  of
                                        Association   and  with   respect  to  a
                                        Delaware corporation, such corporation's
                                        Certificate   of    Incorporation    and
                                        By-Laws, in each case, including all the
                                        amendments thereto;


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<PAGE>

"Copyrights"                            Shall have the meaning  ascribed to such
                                        term in Section 5.11.1 hereof;

"Co-Sale Shares"                        Shall have the meaning  ascribed to such
                                        term in Section 10.7.1 hereof;

"Co-Seller"                             Shall have the meaning  ascribed to such
                                        term in Section 10.7 hereof;

"Current Loan"                          Shall have the meaning  ascribed to such
                                        term in Section 10.14 hereof;

"Dividends Committee"                   Shall have the meaning  ascribed to such
                                        term in Section 10.4 hereof;

"Dollar(s)" or "$"                      Shall mean United States Dollar(s);

"DSI"                                   Shall mean Decision Systems Israel Ltd.;

"DSI Amended Articles"                  Shall have the meaning  ascribed to such
                                        term in Section 2.1 hereof;

"DSI Balance Sheet"                     Shall have the meaning  ascribed to such
                                        term in Section 6.4.1 hereof;

"DSI Balance Sheet Date"                Shall have the meaning  ascribed to such
                                        term in Section 6.4.1 hereof;

"DSI Disclosure Schedule"               Shall mean Schedule 6 attached hereto;

"DSI-Endan Shareholders                 Shall have the meaning  ascribed to such
Loan Agreement"                         term in Section 3.6 hereof;

"DSI's Financial Statements"            Shall have the meaning  ascribed to such
                                        term in Section 6.4.1 hereof;

"DSI Permits"                           Shall have the meaning  ascribed to such
                                        term in Section 6.10 hereof;

"DSI Securities"                        Shall have the meaning  ascribed to such
                                        term in Section 6.2 hereof;

"DSI Shares"                            Shall have the meaning  ascribed to such
                                        term in the Recitals;

"DSI Subsidiaries"                      Shall mean DSI subsidiaries as listed in
                                        the DSI Disclosure Schedule;

"DSSI"                                  Shall mean Data Systems & Software Inc.

"DSSI-DSI Shareholders                  Shall have the meaning  ascribed to such
Loan Agreement"                         term in Section 3.3 hereof;

"DSI Maximum Damages"                   Shall have the meaning  ascribed to such
                                        term in Section 12.3 hereof;

"DSSI Reserved Shares"                  Shall have the meaning  ascribed to such
                                        term in Section 7.2.1 hereof;

"DSSI SEC Reports"                      Shall have the meaning  ascribed to such
                                        term in Section 7.4 hereof;

"DSSI Securities"                       Shall have the meaning  ascribed to such
                                        term in Section 7.2.1 hereof;

"DSSI Shares"                           Shall have the meaning  ascribed to such
                                        term in the Recitals;

"Employment Agreement"                  Shall have the meaning  ascribed to such
                                        term in Section 8.3.8 hereof;

"Endan"                                 Shall mean Endan IT Solutions Ltd.;


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<PAGE>

"Endan Disclosure Schedule"             Shall mean Schedule 5 attached hereto;

"Endan Financial Statements"            Shall have the meaning  ascribed to such
                                        term in Section 5.3.1 hereof;

"Endan Permits"                         Shall have the meaning  ascribed to such
                                        term in Section 5.9 hereof;

"Endan Securities"                      Shall have the meaning  ascribed to such
                                        term in Section 5.2.1 hereof;

"Endan Warrantors"                      Shall have the meaning  ascribed to such
                                        term in Article 5 hereof;

"Final Date"                            Shall mean December 31, 2001;

"Givon"                                 Shall have the meaning  ascribed to such
                                        term in the preamble hereto;

"Governmental Entity"                   Shall  mean any  court or  tribunal,  or
                                        administrative,      governmental     or
                                        regulatory  body,  agency  or  authority
                                        either  in   Israel   or   abroad   with
                                        jurisdiction  or  regulatory   authority
                                        over the relevant party hereto;

"Inbound License Agreements"            Shall have the meaning  ascribed to such
                                        term in Section 5.14.4 hereof;

"Indebtedness"                          Shall have the meaning  ascribed to such
                                        term in Section 5.7.1 hereof;

"Insurance Policies"                    Shall have the meaning  ascribed to such
                                        term in Section 5.15 hereof;

"Intellectual Property" or "IP"         Shall have the meaning  ascribed to such
                                        term in Section 5.14.1 hereof;

"IPO"                                   Shall have the meaning  ascribed to such
                                        term in Section 10.3 hereof;

"Kardan"                                Shall mean Kardan Communications Ltd.

"Kardan Director"                       Shall have the meaning  ascribed to such
                                        term in Section 10.3 hereof;

"Liens"                                 Shall   mean   all   mortgages,   liens,
                                        pledges,  charges,  security  interests,
                                        third  party  rights or other  claims or
                                        encumbrances of any kind whatsoever;

"Market Price"                          Shall mean the average  closing price of
                                        the Common Stock on the NASDAQ  National
                                        Market   during  the  60  trading   days
                                        preceding the day immediately  preceding
                                        the Closing Date;

"Material Adverse Effect"               Shall have the meaning  ascribed to such
                                        term in Section 5.1.2 below;

"Minimum Damages"                       Shall have the meaning  ascribed to such
                                        term in Section 12.2 hereof;

"Neuwirth Investments"                  Shall mean Neuwirth Investments Ltd.;

"New Securities"                        Shall have the meaning  ascribed to such
                                        term in Section 10.5 hereof;

"NIS"                                   Shall mean New Israeli Shekels;

"Noy"                                   Shall mean Jacob Neuwirth;

"Offer"                                 Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereof;

"Offered Shares"                        Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereof;

"Offeree"                               Shall have the meaning  ascribed to such
                                        term in Section 10.5 hereof;

"Option"                                Shall have the meaning  ascribed to such
                                        term in Section 2.3 hereof;


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<PAGE>

"Ordinary Shares"                       Shall mean the  ordinary  shares of DSI,
                                        NIS 1.00 par value each;

"Outbound License Agreements"           Shall have the meaning  ascribed to such
                                        term in Section 5.14.4 hereof;

"Owned Software"                        Shall have the meaning  ascribed to such
                                        term in Section 5.14.10 hereof;

"Party", "Parties"                      Shall  mean  a  party  or  the   parties
                                        hereto;

"Patents"                               Shall have the meaning  ascribed to such
                                        term in Section 5.14.1 hereof;

"Permitted Transferee"                  Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereof;

"Person"                                Shall mean an  individual,  corporation,
                                        partnership,  joint  venture,  trust  or
                                        unincorporated organization;

"Pre-Ruling"                            Shall have the meaning  ascribed to such
                                        term in Section 9.2.6 hereof;

"Preferred Shares"                      Shall have the meaning  ascribed to such
                                        term in Section 2.1 hereof.

"Proportional Share"                    Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereto;

"Pro Rata Share"                        Shall have the meaning  ascribed to such
                                        term in Section 10.5 hereto;

"Receivables"                           Shall have the meaning  ascribed to such
                                        term in Section 5.7.2 hereof;

"Registration Rights Agreement"         Shall mean Exhibit 3.5 attached hereto;

"Rights Notice"                         Shall have the meaning  ascribed to such
                                        term in Section 10.5 hereof;

"Scheduled Contract"                    Shall  have  the   respective   meanings
                                        ascribed to such term in Sections 5.12.3
                                        and 6.13.3 hereof, as applicable;

"SEC"                                   Shall mean the United States  Securities
                                        and Exchange Commission;

"Seller"                                Shall have the meaning  ascribed to such
                                        term in Section 10.6 hereof;

"Shareholder" or "Shareholders"         Shall  mean  each  of  Kardan,  Neuwirth
                                        Investments  and Givon,  individually or
                                        collectively;

"Shareholders Maximum Damages"          Shall have the meaning  ascribed to such
                                        term in Section 12.2 hereof;

"Shares"                                Shall have the meaning  ascribed to such
                                        term in the Recitals hereto;

"Software Products"                     Shall have the meaning  ascribed to such
                                        term in Section 5.14.11 hereof;

"Subsidiaries"                          Shall  mean  Endan's   subsidiaries   as
                                        listed in the Endan Disclosure Schedule;

"Trade Secrets"                         Shall have the meaning  ascribed to such
                                        term in Section 5.14.1 hereof;

"Trademarks"                            Shall have the meaning  ascribed to such
                                        term in Section 5.14.1 hereof;

"Transaction Documents"                 Shall mean each of this  Agreement,  the
                                        Registration   Rights   Agreement,   the
                                        DSSI-DSI Shareholder Loan Agreement, the
                                        DSI-Endan  Shareholder  Loan  Agreement,
                                        and all other documents  entered into or
                                        delivered  in  connection   herewith  or
                                        therewith,    contemplated   hereby   or
                                        thereby, or ancillary hereto or thereto;
                                        and

"Transactions"                          Shall have the meaning  ascribed to such
                                        term in Section 5.1.1 hereof;

"Transfer"                              Shall have the meaning  ascribed to such
                                        term in Section 4.8 hereof;


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<PAGE>

"U.S. Exchange Act"                     Shall mean the U.S.  Securities Exchange
                                        Act of 1934 as amended.

                                   ARTICLE II

              Transactions To Be Effected Prior to the Closing Date

Subject to the terms and  conditions  set forth in this  Agreement,  the parties
agree  that  prior  to the  Closing  Date  (as  defined  below),  the  following
transactions shall have been consummated:

2.1.    Amendment to the Articles of Association. The Articles of Association of
        DSI shall be amended in the form of Exhibit  2.1  attached  hereto  (the
        "DSI  Amended  Articles"),  to provide  for,  among  other  things,  the
        authorization of a new class of preferred shares,  each having a nominal
        value of NIS 1.00 (the  "Preferred  Shares"),  and  having  the  rights,
        restrictions, privileges and preferences as set forth in the DSI Amended
        Articles. 2.2. Authorization and Issuance of Preferred Shares. DSI shall
        authorize the issuance of, and then issue, 100 Preferred Shares to DSSI.

2.3.    DSI Stock  Option  Plan.  DSI shall adopt a stock option plan (the "2001
        DSI Stock Option  Plan"),  reserving  for issuance  thereunder an amount
        equal  to  5% of  the  issued  Ordinary  Shares  of  the  Company  as of
        immediately following the Closing, and shall, promptly after the Closing
        (as defined  below),  issue a stock option  thereunder (the "Option") to
        Gilad Landau,  pursuant to a stock option agreement substantially in the
        form of Exhibit  2.3B,  for such number of Ordinary  Shares  which shall
        represent 0.67% of the outstanding Ordinary Shares immediately after the
        consummation  of  the  transactions  contemplated  hereby  and  assuming
        issuance of the Ordinary Shares reserved under the 2001 DSI Stock Option
        Plan, at an exercise  price  reflecting a DSI valuation of $6.7 million,
        in exchange for cancellation of his existing stock option in Endan.

                                   ARTICLE III

                 Transactions to be Effected on the Closing Date

3.1.    Closing;  Closing  Date.  The closing of the  transactions  contemplated
        hereby (the "Closing") shall take place at the offices of Eitan,  Pearl,
        Latzer & Cohen-Zedek,  7 Shenkar Street,  Herzlia,  at the earliest time
        practicable after fulfillment or waiver of all the conditions to Closing
        hereunder,  or at such other time as shall be  determined by the parties
        hereto but no later than the Final Date (the "Closing Date"). All of the
        transactions to occur at the Closing shall occur  simultaneously  and no
        transaction  shall be  deemed  to have been  completed  or any  document
        delivered  until  all such  transactions  have  been  completed  and all
        required documents delivered.

3.2.    Purchase  of Shares from  Shareholders.  On the terms and subject to the
        conditions  set forth herein,  at the Closing,  each  Shareholder  shall
        sell,  transfer,  convey,  assign  and  deliver  to DSI,  and DSI  shall
        purchase, acquire and accept from each Shareholder, all the Shares owned
        by such  Shareholder in accordance  with the table set forth as Schedule
        3.2 hereto) free and clear of any covenants,  conditions,  restrictions,
        voting


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<PAGE>

        trust  arrangements  or  Liens,  options  or  adverse  claims  or rights
        whatsoever.  At the  Closing,  Endan shall  deliver to DSI  certificates
        representing  the Shares owned by each  Shareholder  accompanied by duly
        signed share transfer deeds dated as of the Closing Date,  together with
        evidence  of  recordation  of DSI  as the  owner  of the  Shares  in the
        membership  registry  of  Endan  and a duly  completed  notice  of  such
        transfer to the Israeli  Registrar of Companies in form  acceptable  for
        immediate filing therewith.

3.3.    DSSI-DSI  Shareholders  Loan. On or prior to the Closing Date,  DSSI and
        DSI shall  execute and  deliver a  shareholder  loan and stock  purchase
        agreement,  in the form of Exhibit 3.3 hereto (the "DSSI-DSI Shareholder
        Loan  Agreement"),  whereby DSSI shall (i) repay certain of its existing
        indebtedness  to DSI in the amount of $2.39 million by agreeing to issue
        the DSSI Shares to the Shareholders on behalf of DSI and paying $140,000
        in cash to DSI and (ii) extend a shareholder  loan of $1,360,000 to DSI.
        At the Closing, DSSI shall deliver, on behalf of DSI, the DSSI Shares to
        the Shareholders and transfer to DSI $1,500,000 in immediately available
        funds, as contemplated in the DSSI-DSI Shareholder Loan Agreement.

3.4.    Consideration  for Shares.  In consideration for the sale of the Shares,
        DSI shall at the Closing pay or deliver to each of the Shareholders, (i)
        a portion of the Cash  Consideration,  in the amount set forth  opposite
        such  Shareholder's  name on Schedule  3.2,  which shall be paid by wire
        transfer  in  accordance  with  written  instructions  provided  by such
        Shareholder,  banker's  check,  or  such  other  form of  payment  as is
        mutually  agreed  by  DSI  and  such  Shareholder;  (ii)  a  certificate
        registered in the name of such Shareholder  representing such percentage
        of the DSSI Shares  (rounded to the  nearest  whole  share) as set forth
        opposite  such  Shareholder's  name on Schedule 3.2; and (iii) a validly
        executed share  certificate  registered in the name of such  Shareholder
        representing   the  number  of  DSI  Shares  set  forth   opposite  such
        Shareholder's  name on Schedule 3.2, which, when aggregated with the DSI
        Shares  issued to the other  Shareholders  shall  constitute  32% of the
        issued and  outstanding  Ordinary Shares of DSI on a fully diluted basis
        but disregarding any Ordinary Shares issuable upon the conversion of the
        Preferred Shares or upon exercise of the Option,  in accordance with the
        capitalization  table of DSI attached  hereto as Schedule 3.4,  together
        with  evidence of the  recordation  of the DSI Shares in the  membership
        registry  of DSI and a duly  completed  notice of such  issuance  to the
        Israeli  Registrar of Companies in form acceptable for immediate  filing
        therewith.

3.5.    Registration  Rights.  At the Closing,  DSSI and the Shareholders  shall
        execute and deliver a registration  rights  agreement,  substantially in
        the form of Exhibit 3.5 hereto (the  "Registration  Rights  Agreement"),
        whereby  (i)  DSSI  shall  agree  to use its  best  efforts  to a file a
        registration  statement covering the DSSI Shares within 30 days from the
        Closing  Date and to effect a  registration  within  120 days  after the
        Closing  Date,  and (ii)  the  Shareholders  shall  agree to be bound by
        certain  lock-up  restrictions,  all as set  forth  in the  Registration
        Rights Agreement.

3.6.    DSI-Endan Shareholders Loan. At the Closing, DSI and Endan shall execute
        and deliver a shareholders loan agreement,  substantially in the form of
        Exhibit  3.6  hereto  (the  "DSI-Endan   Shareholder  Loan  Agreement"),
        pursuant  to which DSI  shall  extend a loan of $1  million  to Endan as
        provided  for  therein,  and  Endan  shall  use  the  proceeds  of  such
        shareholders loan to repay certain  indebtedness to Kardan in the amount
        of $1 million.


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<PAGE>

3.7.    Appointment  of  Directors.  Kardan and Neuwirth  Investments  will each
        appoint  one  director to the Board of  Directors  of DSI and DSSI shall
        appoint  three  directors to the Board of Directors of DSI, in each case
        in accordance with Section 10.1 hereof.

                                   ARTICLE IV

               Representations and Warranties of the Shareholders
                              Regarding the Shares

        Each Shareholder hereby individually represents and warrants,  severally
with respect to itself, to DSI and DSSI, that:

4.1.    Such  Shareholder has good and marketable  title to the Shares which are
        to be transferred to DSI by such Shareholder  pursuant hereto,  free and
        clear of any and all covenants, conditions,  restrictions,  voting trust
        arrangements or Liens, options or adverse claims or rights whatsoever;

4.2.    Such  Shareholder has the full right,  power and authority to enter into
        this  Agreement  and to transfer,  convey and sell to DSI at the Closing
        the  Shares  to be sold to DSI by such  Shareholder  hereunder  and upon
        consummation of the purchase  contemplated hereby, DSI will acquire from
        such  Shareholder  good and marketable title to the Shares to be sold to
        it by such  Shareholder,  free and clear of all  covenants,  conditions,
        restrictions,  voting trust  arrangements  or Liens,  options or adverse
        claims or rights whatsoever;

4.3.    Such Shareholder is not a party to, subject to or bound by any agreement
        or judgment, order, writ, prohibition, injunction or decree of any court
        or other governmental body which would prevent the execution or delivery
        of this  Agreement  or the  other  Transaction  Document  to which  such
        Shareholder is a party by such Shareholder, or the transfer,  conveyance
        and sale of the Shares to be sold by such Shareholder to DSI pursuant to
        the terms hereof;

4.4.    This Agreement and the other  Transaction  Documents,  when executed and
        delivered by such  Shareholder  shall  constitute  the valid and legally
        binding  obligations of such Shareholder,  legally  enforceable  against
        such Shareholder in accordance with their respective  terms,  subject to
        any applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
        similar laws now or hereafter in effect  relating to  creditors'  rights
        generally or to general  principles of equity.  No filing with or notice
        to and no permit, authorization, consent or approval of any Governmental
        Entity is necessary for the  execution and delivery by such  Shareholder
        of this  Agreement  or any of the other  Transaction  Documents to which
        such  Shareholder is a party or the  consummation by such Shareholder of
        the  Transactions,  except  for  filings  by or on  behalf  of  Givon in
        accordance  with Section 102 of the Israeli  Income Tax  Ordinance  (New
        Version).

4.5.    No broker or finder has acted for such  Shareholder  in connection  with
        this Agreement or the transactions contemplated hereby, and no broker or
        finder  is  entitled  to  any   brokerage  or  finder's  fees  or  other
        commissions in respect of such transactions based


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<PAGE>

        in any way on agreements,  arrangements or understandings  made by or on
        behalf of such Shareholder.

4.6.    Each Shareholder  hereby waives any rights of first refusal,  co-sale or
        otherwise,  affecting the Shares to be sold to DSI by such  Shareholder,
        whether set out in the Articles of  Association  of Endan or  otherwise,
        and no other parties hold such rights.

4.7.    There  are no  securities  outstanding  which  are  convertible  into or
        exercisable or exchangeable for the Shares, and there are no outstanding
        options, rights,  contracts,  understandings,  warrants,  subscriptions,
        conversion  rights or other agreements or commitments  pursuant to which
        such Shareholder may be required to transfer,  sell or otherwise dispose
        of any of the Shares.

4.8.    Such  Shareholder  is acquiring the DSSI Shares for  investment for such
        Shareholder's  own  account  and not with a view to,  or for  resale  in
        connection with, the  distribution or other  disposition  thereof.  Such
        Shareholder  agrees  that he will not,  directly or  indirectly,  offer,
        transfer,  sell,  assign,  pledge,  hypothecate or otherwise  dispose of
        (each a "Transfer") any of the DSSI Shares unless such Transfer complies
        with the provisions of the Registration Rights Agreement.

4.9.    Such  Shareholder  is  either  (a) not a "U.S.  Person"  as that term is
        defined  in  Rule  902  (k) of  Regulation  S  under  the  Act or (b) an
        "Accredited Investor" (as that term is defined in Rule 501 of Regulation
        D under  the Act)  and by  reason  of such  Shareholder's  business  and
        financial    experience,    such   Shareholder   has   such   knowledge,
        sophistication and experience in business and financial matters as to be
        capable of evaluating the merits and risks of the prospective investment
        in the DSSI  Shares  and making an  informed  investment  decision  with
        respect  thereto.  Such Shareholder is able to bear the economic risk of
        his  investment in the DSSI Shares and is able to afford a complete loss
        of such  investment;  and (without  derogating from any  representations
        made  by DSSI  hereunder)  such  Shareholder  has  made  an  independent
        investigation  of DSSI to the extent  he/it saw fit and relied upon such
        Shareholder's  own analyses as he/it saw fit in  determining to purchase
        the DSSI Shares.

4.10.   Such  Shareholder  acknowledges  that  the  DSSI  Shares  have  not been
        registered  under the Act or the  securities  laws of any state or other
        jurisdiction  and  cannot be  Transferred  unless  the DSSI  Shares  are
        subsequently  registered  under the Act and any applicable state laws or
        an exemption from such registration is available and, in each case, such
        Shareholder has complied with the Registration Rights Agreement.

4.11.   Neither this  Agreement nor any  certificates  made or delivered by such
        Shareholder in connection  herewith  contains any untrue  statement of a
        material  fact  with  respect  to such  Shareholder  or omits to state a
        material fact  necessary to make the  statements  herein or therein with
        respect to such Shareholder not misleading, in view of the circumstances
        in which  they were made.  To the best  knowledge  of such  Shareholder,
        there is no material fact or information  relating to such  Shareholder,
        material to the Transactions, that has not been disclosed to DSI or DSSI
        in writing by such Shareholder.


                                       9
<PAGE>

                                    ARTICLE V

                         Representations and Warranties

                     Of the Endan Warrantors Regarding Endan


        Each of Kardan,  Neuwirth  Investments and Noy (the "Endan  Warrantors")
hereby  represent  and  warrant  severally  to  DSI  and  DSSI,  subject  to the
exceptions  set  forth in the  Endan  Disclosure  Schedule  attached  hereto  as
Schedule 5 (the "Endan  Disclosure  Schedule"),  which exceptions shall apply to
any and all  representations  and warranties set forth herein  (provided that no
such exceptions  shall apply to Sections 5.1.1 (first two  sentences),  5.2, 5.4
and 5.19), that:

5.1.    Organization and Qualification; Subsidiaries; Investments.

        5.1.1   Each of Endan and the Subsidiaries is duly organized and validly
                existing  under the laws of Israel and have all requisite  power
                and authority to own, lease and operate their  properties and to
                carry on their businesses as now being conducted.  Endan has all
                requisite  power and  authority  to  execute  and  deliver  this
                Agreement and the other Transaction  Documents and to consummate
                the transactions  contemplated hereby and thereby  (hereinafter,
                the  "Transactions").  Endan  has  heretofore  delivered  to DSI
                accurate and complete copies of its Constitutional Documents and
                the Constitutional  Documents of the Subsidiaries,  as currently
                in  effect.  Other  than as set  forth on the  Endan  Disclosure
                Schedule,   Endan  has  no   subsidiaries   and  has  no  equity
                investments,  ownership  or  partnership  interests in any other
                Person.

        5.1.2   Each of Endan and the Subsidiaries is duly qualified or licensed
                and in good  standing  to do business  in each  jurisdiction  in
                which the  property  owned,  leased or  operated  by them or the
                nature  of  the   business   conducted   by  them   makes   such
                qualification   or   licensing   necessary,   except   in   such
                jurisdictions  where  the  failure  to be so duly  qualified  or
                licensed and in good standing would not,  individually or in the
                aggregate,  have a  Material  Adverse  Effect  on Endan  and the
                Subsidiaries,  individually  and  taken  as a  whole.  The  term
                "Material Adverse Effect", with respect to any Person, means any
                circumstance,  change in, or effect on such  Person (i) that is,
                or is reasonably likely in the future to be, materially  adverse
                to the operations,  assets or liabilities  (including contingent
                liabilities),  earnings or results of  operations,  the business
                (financial  or  otherwise)  or  prospects of such Person or (ii)
                that would reasonably be expected to prevent or materially delay
                or impair the  ability of such Person (or, in the case of Endan,
                of the  Shareholders  and Noy) to  consummate  the  transactions
                contemplated hereby; provided, however, that such term shall not
                include any  circumstance or change related to general  economic
                conditions;  and  provided,  further,  that in the case of DSSI,
                such term  shall also not  include  any  circumstance  or change
                related to (A) securities  markets generally or (B) fluctuations
                in the price of DSSI Common  Stock  unrelated  to any event that
                would otherwise constitute a Material Adverse Effect on DSSI.


                                       10
<PAGE>

5.2.    Capitalization of Endan and its Subsidiaries.

        5.2.1   The  authorized   capitalization   of  Endan  and  each  of  the
                Subsidiaries,  the  number of shares of each  class of Endan and
                each of the  Subsidiaries  which are  issued  (and  which,  with
                respect to shares of Endan,  collectively constitute the Shares)
                and the  holders  of such  shares  are set  forth  in the  Endan
                Disclosure Schedule.  All of the Shares have been validly issued
                and are  fully  paid,  non-assessable  and  free  of  preemptive
                rights. As of the date hereof,  other than the shares subject to
                the option of Gilad Landau,  no shares of Endan are reserved for
                issuance  and are  issuable  upon or  otherwise  deliverable  in
                connection with the exercise of outstanding share options issued
                pursuant to options  agreements to which Endan is a party. As of
                the date hereof,  there are no  outstanding  Endan share options
                other than the option of Gilad  Landau.  The  outstanding  Endan
                share  options  are  owned of record  by those  persons,  in the
                amounts, at the exercise price and on the vesting schedule,  all
                as set forth in the  Endan  Disclosure  Schedule.  Except as set
                forth above, there are outstanding (i) no shares or other voting
                securities of Endan,  (ii) no  securities  of Endan  convertible
                into or exchangeable  or exercisable for shares of Endan,  (iii)
                no options or other rights to acquire shares from Endan,  and no
                obligations  of Endan to issue,  any  shares,  capital  stock or
                securities  convertible  into or exchangeable or exercisable for
                shares of Endan and (iv) no equity  equivalent  interests in the
                ownership  or  earnings  of  Endan  or  other   similar   rights
                (collectively "Endan Securities").  As of the date hereof, there
                are no outstanding rights or obligations of Endan to repurchase,
                redeem or otherwise  acquire any Endan  Securities and there are
                no shareholder agreements,  voting trusts or other agreements or
                understandings  to which Endan or any  Shareholder is a party or
                by which it is bound relating to the voting or  registration  of
                any shares of Endan.

        5.2.2   All of the outstanding  shares of the  Subsidiaries are owned by
                Endan,  directly,  free  and  clear  of any  Lien  or any  other
                limitation or  restriction  (including  any  restriction  on the
                right to vote or sell the same  except as may be  provided  as a
                matter of law).

        5.2.3   No share  certificates  representing  the Shares  have ever been
                issued and the  ownership of the Shares is  evidenced  solely by
                recordation in the membership registry of Endan.

5.3.    Financial Statements.

        5.3.1   Endan  has   delivered  to  DSI  copies  of  Endan's   financial
                statements (hereinafter collectively called the "Endan Financial
                Statements"),  attached  hereto  as  Section  5.3 of  the  Endan
                Disclosure  Schedule,  which have been  prepared in all material
                respects  in   accordance   with  Israeli   generally   accepted
                accounting  principles,   consistently  applied  and  maintained
                throughout   the  periods   indicated  and  fairly  present  the
                consolidated  financial  condition  of  Endan  as of  the  dates
                thereof  and the  results  of its  operations  for  the  periods
                covered  thereby  (subject to normal  year-end  adjustments)  as
                follows: (i) unaudited  consolidated statement of operations and
                balance  sheet for the nine month period  ending  September  30,
                2001, and (ii) audited consolidated balance


                                       11
<PAGE>

                sheets  of  Endan  as at  December  31,  2000  and  the  related
                consolidated   statements  of  operations  for  the  year  ended
                December 31, 2000,  accompanied by the audit opinions thereon of
                Luboshitz,   Kasierer   &  Co.,   Endan's   independent   public
                accountants.   The  consolidated  balance  sheets  of  Endan  at
                December 31, 2000 and September 30, 2001 are referred to herein,
                collectively,  as the "Endan  Balance  Sheet" and  September 30,
                2001 is referred to herein as the "Endan Balance Sheet Date".

                Except as set forth in the Endan Financial  Statements or in the
                Endan Disclosure Schedule, the statements of operations included
                therein do not  contain  any items of  special  or  nonrecurring
                revenue or any other income not earned in the ordinary course of
                business except as expressly specified therein,  and the interim
                financial statements include all adjustments, which consist only
                of normal recurring accruals, necessary for a fair presentation.
                All inventories of raw materials,  work-in-process  and finished
                goods set forth and reflected in Endan Balance Sheet, as well as
                any  inventory  Endan  has  directed  any of  its  manufacturing
                subcontractors  to procure and  manufacture  on Endan's  behalf,
                were acquired in the ordinary course of business consistent with
                past  practice.  All such  inventories  consist of a quality and
                quantity  usable and saleable  (free of any  material  defect or
                deficiency) in the ordinary course of business,  consistent with
                past practice, except for slow-moving, damaged or obsolete items
                and materials of below standard quality,  all of which have been
                written  down to net  realizable  value or in  respect  of which
                adequate  reserves  have  been  provided,  in each case as fully
                reflected in Endan Balance Sheet.

5.4.    Authorization;  Consents and  Approvals;  No  Violations.  All corporate
        action  on the part of Endan  necessary  for  authorization,  execution,
        delivery,  and  performance  of all of  Endan's  obligations  under this
        Agreement and the other Transaction  Documents to which Endan is a party
        shall  have been  taken,  and Endan has  delivered  to DSI and DSSI duly
        adopted  resolutions  of its Board of Directors and of the  Shareholders
        authorizing  the  same.   This  Agreement  and  the  other   Transaction
        Documents,  when executed and delivered by or on behalf of Endan,  shall
        constitute the valid and legally binding  obligations of Endan,  legally
        enforceable  against Endan in accordance with their respective terms. No
        filing  with or  notice  to and no  permit,  authorization,  consent  or
        approval of any  Governmental  Entity is necessary for the execution and
        delivery  by Endan of this  Agreement  or any of the  other  Transaction
        Documents  to  which  Endan  is a  party  or  the  consummation  by  the
        Shareholders,  by  Noy or by  Endan  of the  Transactions.  Neither  the
        execution,  delivery  and  performance  of this  Agreement or any of the
        other Transaction Documents to which any Shareholder,  Noy or Endan is a
        party nor the  consummation by the  Shareholders,  by Noy or by Endan of
        the  Transactions  will (i) conflict with or result in any breach of any
        provision   of  the   Constitutional   Documents  of  Endan  or  of  the
        Subsidiaries,  (ii)  result in a  violation  or breach of or  constitute
        (with or without due notice or lapse of time or both) a default (or give
        rise  to  any  right  of   termination,   amendment,   cancellation   or
        acceleration or Lien) under any note, bond, mortgage,  indenture, lease,
        license, contract,  agreement or other instrument or obligation to which
        Endan, the Subsidiaries or any Shareholder is a party or by which any of
        them or any of their  respective  properties  or assets  may be bound or
        (iii) violate any order, writ, injunction, decree, law, statute, rule or


                                       12
<PAGE>

        regulation   applicable  to  Endan,  the  Subsidiaries  or  any  of  the
        Shareholders or any of their respective properties or assets.

5.5.    No  Default.  Except  as set  forth in the  Endan  Disclosure  Schedule,
        neither Endan nor the  Subsidiaries  is in breach,  default or violation
        (and no event has occurred that with notice or the lapse of time or both
        would constitute a breach,  default or violation) of any term, condition
        or provision of (i) their Constitutional Documents, (ii) any note, bond,
        mortgage,  indenture, or license or other material,  contract, agreement
        or  instrument  or obligation to which they are a party or by which they
        or any of their  properties  or assets  may be bound or (iii) any order,
        writ, injunction, decree, law, statute, rule or regulation applicable to
        Endan or the Subsidiaries or any of their properties or assets.

5.6.    No  Undisclosed  Liabilities;  Absence of Changes.  Except as and to the
        extent  set  forth in the  Endan  Disclosure  Schedule  or as and to the
        extent  expressly set forth or provided for or reserved against in Endan
        Balance Sheet,  neither Endan nor the Subsidiaries  have any liabilities
        or  obligations  of any nature,  whether or not accrued,  contingent  or
        otherwise,   that  would  be  required  by  Israeli  generally  accepted
        accounting  principles  to be  reflected  on a  balance  sheet  of Endan
        (including the notes  thereto),  other than  liabilities and obligations
        which,  individually  or in the  aggregate,  will  not  have a  Material
        Adverse  Effect on Endan.  Except as and to the  extent set forth in the
        Endan  Disclosure  Schedule,  since the Endan Balance Sheet Date,  there
        have been no events,  changes or  effects  with  respect to Endan or the
        Subsidiaries  that have had or would  reasonably  be  expected to have a
        Material Adverse Effect on Endan. Without limiting the generality of the
        foregoing,  except  as and to the  extent  as  set  forth  in the  Endan
        Disclosure  Schedule,  since the Endan Balance Sheet Date, each of Endan
        and the  Subsidiaries  have conducted  their  businesses in all material
        respects only in, and have not engaged in any material transaction other
        than  according  to, the ordinary  and usual  course of such  businesses
        consistent with past practices,  and there has not been any (i) material
        adverse change in the financial condition, properties, business, results
        of  operations or prospects of Endan or the  Subsidiaries;  (ii) damage,
        destruction or other casualty loss with respect to any material asset or
        property  owned,  leased or otherwise used by Endan or the  Subsidiaries
        and which is not covered by insurance; (iii) declaration,  setting aside
        or  payment  of any  dividend  or other  distribution  in respect of any
        shares of Endan or any  repurchase,  redemption or other  acquisition by
        Endan  of any  outstanding  shares  or  other  securities  of,  or other
        ownership interests in Endan; (iv) amendment of any material term of any
        outstanding  security of Endan; (v) incurrence,  assumption or guarantee
        by Endan or the  Subsidiaries  of any  indebtedness  for borrowed  money
        other than in the  ordinary  course of  business  and in amounts  and on
        terms  consistent  with past  practices (but in all events not exceeding
        $15,000 or the equivalent  thereof in the  aggregate);  (vi) creation or
        assumption  by any of  Endan  or the  Subsidiaries  of any  Lien  on any
        material asset other than in the ordinary course of business  consistent
        with past practices (not exceeding $15,000 or the equivalent  thereof in
        the aggregate with respect to the  Indebtedness  underlying such Liens);
        (vii)  loan,  advance  or  capital  contributions  made by  Endan or the
        Subsidiaries  to, or  investment  in, any Person other than (x) loans or
        advances to employees in connection with  business-related  travel,  (y)
        loans made to employees  consistent  with past practices that are not in
        the aggregate in excess of $15,000 or the  equivalent  thereof,  and (z)
        loans,  advances or capital  contributions to or investments by Endan in
        the  Subsidiaries,  and in each  case  made in the  ordinary  course  of
        business consistent with past practices;


                                       13
<PAGE>

        (viii)  transaction  or  commitment  made,  or any contract or agreement
        entered into, by Endan or the  Subsidiaries  relating to their assets or
        business (including the acquisition or disposition of any assets) or any
        relinquishment  by Endan or the Subsidiaries of any contract,  agreement
        or other  right,  in any case,  material  to Endan or the  Subsidiaries,
        taken  as a  whole,  other  than  transactions  and  commitments  in the
        ordinary  course of business  consistent  with past  practices and those
        contemplated  by  this  Agreement;  or  (ix)  change  by  Endan  in  its
        accounting  principles,  practices or methods.  Since the Endan  Balance
        Sheet Date,  except for  increases  in the  ordinary  course of business
        consistent with past  practices,  there has not been any increase in the
        compensation  payable  or that  could  become  payable  by  Endan or the
        Subsidiaries  to (a)  officers of Endan or the  Subsidiaries  or (b) any
        employee of Endan or the Subsidiaries  whose annual cash compensation is
        the equivalent of $70,000 or more.

5.7.    Indebtedness; Bank Accounts; Receivables; Customers.

        5.7.1   The Endan  Disclosure  Schedule  provides  accurate and complete
                information (including amount and name of payee) with respect to
                all  Indebtedness  of Endan or the  Subsidiaries.  For  purposes
                hereof,   "Indebtedness"  of  any  person  means  all  items  of
                indebtedness  of such  person for  borrowed  money and  purchase
                money  indebtedness,  including without  limitation  capitalized
                lease  obligations,  which in accordance with generally accepted
                accounting   principles,   would  be  included  in   determining
                liabilities  as shown on the liability side of the balance sheet
                of such person as of the date as of which  indebtedness is to be
                determined, and also includes all contingent obligations.

        5.7.2.  Except  as set  forth  in the  Endan  Disclosure  Schedule,  all
                existing  accounts   receivable,   notes  receivable  and  other
                receivables  of  Endan  and  the   Subsidiaries   (collectively,
                "Receivables")  (including those Receivables  reflected on Endan
                Balance  Sheet  that  have  not yet  been  collected  and  those
                Receivables  that have arisen since the Endan Balance Sheet Date
                and have not yet been collected) (i) represent valid obligations
                of customers of Endan or the Subsidiaries arising from bona fide
                transactions  entered into in the  ordinary  course of business,
                and  (ii)  have  been  collected  or are  current  and  will  be
                collected by Endan or the Subsidiaries (without any counterclaim
                or set-off)  within ninety (90) days after the date due or, with
                respect to those Receivables already more than 90 days past due,
                45 days after the Closing Date, in each case net of an allowance
                for  doubtful  accounts  not to exceed  amounts  reserved for on
                Endan Balance Sheet.

        5.7.3   Neither  Endan nor the  Subsidiaries  has received any notice or
                other communication  indicating that any customer (a) intends or
                expects to cease  dealing with Endan or the  Subsidiaries  or to
                effect a material reduction in the volume of business transacted
                by such person  with Endan or the  Subsidiaries  below  historic
                levels  or (b)  intends  to  claim  that  any  of  the  services
                performed for it by Endan or the Subsidiaries  prior to the date
                hereof was sub-standard or deficient.


                                       14
<PAGE>

        5.7.4   Except  as  disclosed  in  the  Endan  Disclosure  Schedule,  no
                customer of Endan or the  Subsidiaries  has a right of refund or
                set off from Endan or the Subsidiaries.

5.8.    Litigation.  Except as disclosed in the Endan Disclosure Schedule, there
        is no suit, claim,  action,  proceeding or investigation  pending or, to
        the knowledge of Endan,  threatened against Endan or the Subsidiaries or
        any of their  respective  properties or assets,  or against any of their
        respective officers, directors or employees (in their capacity as such),
        before any  Governmental  Entity.  Neither Endan nor the Subsidiaries is
        subject to any  outstanding  order,  writ,  injunction or decree.  Endan
        shall provide DSI an audit letter from its auditors or a letter from its
        counsel to this effect prior to the Closing.

5.9.    Compliance with Applicable Law.

        Endan  and the  Subsidiaries  hold  all  permits,  licenses,  variances,
        exemptions,  orders and approvals of all Governmental Entities necessary
        for the  lawful  conduct  of their  respective  businesses  (the  "Endan
        Permits"),   except  for  failures  to  hold  such  permits,   licenses,
        variances, exemptions, orders and approvals that would not be reasonably
        expected to,  individually or in the aggregate,  have a Material Adverse
        Effect on Endan.  Endan and the  Subsidiaries are in compliance with the
        terms of the Endan Permits,  except where the failure so to comply would
        not, individually or in the aggregate, have a Material Adverse Effect on
        Endan.  The  businesses  of Endan  and the  Subsidiaries  are not  being
        conducted in violation of any  applicable  law,  ordinance or regulation
        the violation which could reasonably be expected, individually or in the
        aggregate,  to have a Material Adverse Effect on Endan. No investigation
        or  review  by any  Governmental  Entity  with  respect  to Endan or the
        Subsidiaries is pending or, to the knowledge of Endan, threatened,  nor,
        to the  knowledge of Endan,  has any  Governmental  Entity  indicated an
        intention  to  conduct  the  same,  except  as set  forth  in the  Endan
        Disclosure Schedule.

5.10.   Title to Properties; Absence of Liens and Encumbrances.

        5.10.1  Neither Endan nor the Subsidiaries  owns any fee interest in any
                real property nor has it ever owned any fee interest in any real
                property. The Endan Disclosure Schedule sets forth a list of all
                real property currently leased by Endan or the Subsidiaries, the
                name of the lessor and the date of the lease and each  amendment
                thereto. All such current real property leases are in full force
                and effect,  are valid and  effective in  accordance  with their
                respective  terms,  and there is not,  under any of such leases,
                any  existing  material  default or event of  default  (or event
                which with notice or lapse of time, or both,  would constitute a
                default) by or with respect to Endan or the Subsidiaries,  or to
                the Endan Warrantors' knowledge, by or with respect to any third
                party.  Complete and correct  copies of such leases in effect on
                the date hereof have been delivered to DSI.

        5.10.2  Endan and the  Subsidiaries  have good and valid title to or, in
                the  case of  leased  properties  and  assets,  valid  leasehold
                interests  in, all of their  material  properties  and  material
                assets,  whether tangible or intangible (including  Intellectual
                Property), real, personal and mixed, free and clear of any Liens


                                       15
<PAGE>

                except as reflected in the Financial  Statements or in the Endan
                Disclosure Schedule.

5.11.   Employee Benefit Plans; Labor Matters.

        5.11.1  The Endan Disclosure  Schedule sets forth a list as of the Endan
                Balance Sheet Date of (i) all  directors,  officers or employees
                of Endan or the Subsidiaries and correctly  reflects the current
                salary and any other  compensation  payable  to such  directors,
                officers or employees  (including  compensation payable pursuant
                to bonus, deferred compensation or commission arrangements or in
                connection  with any  manager's  insurance,  education  fund and
                health fund), and such employee's  employer,  date of employment
                and  position;  (ii) all  agreements  with  consultants  who are
                individuals  obligating Endan or the Subsidiaries to make annual
                cash payments in an amount  exceeding  $15,000 or the equivalent
                thereof;  (iii) all severance agreements,  programs and policies
                of Endan or the Subsidiaries with or relating to their employees
                except such  programs and policies  required to be maintained by
                law;  and  (iv)  all  plans,  programs,   agreements  and  other
                arrangements  of Endan or the  Subsidiaries  with or relating to
                their employees that contain change in control provisions. Endan
                has made  available  to DSI  copies (or  descriptions  in detail
                reasonably  satisfactory to DSI) of all such agreements,  plans,
                programs and other arrangements.

        5.11.2  Neither Endan nor the  Subsidiaries is a party to any collective
                labor  agreement or any other contract or  arrangement  with any
                trade  union or other  body  representing  any of its  employees
                other than as set forth in the Endan  Disclosure  Schedule,  and
                neither Endan nor the  Subsidiaries has recognized or received a
                demand   for   recognition   from  any   collective   bargaining
                representative  with  respect to any of its or their  employees.
                Other  than  as set  forth  in the  Endan  Disclosure  Schedule,
                neither  Endan  nor  the  Subsidiaries  is  subject  to,  nor do
                employees of any such  corporation  benefit from,  any extension
                orders   (tzavei   harchava)  or  any   contract,   arrangement,
                understanding  or custom with respect to employment  (including,
                without  limitation,   termination   thereof).   Other  than  as
                expressly set forth in the Endan  Disclosure  Schedule,  neither
                Endan  nor the  Subsidiaries  has any  custom  with  respect  to
                termination of employment.

        5.11.3  Except  for  the  employment  agreements  listed  in  the  Endan
                Disclosure  Schedule,  there are no  contracts  or  arrangements
                between  Endan  or the  Subsidiaries  and any of its  directors,
                officers,  executives or employees which cannot be terminated by
                such  corporation  by three months notice or less without giving
                rise  to  a  claim  for  damages  or  compensation  (except  for
                statutory severance pay).

        5.11.4  Other than as set forth in the Endan Disclosure Schedule,  there
                is  no  outstanding  claim  or  complaint  (including,   without
                limitation, any claim resulting from a bonus arrangement), other
                than claims and complaints  demanding solely pecuniary damage in
                an aggregate amount of less than


                                       16
<PAGE>

                $15,000,  against Endan or the Subsidiaries by any person who is
                now or has been an officer or employee of such company..

        5.11.5  There is no labor strike,  slowdown or stoppage  pending (or, to
                the best  knowledge  of  Endan,  any labor  strike  or  stoppage
                threatened or  contemplated)  against or affecting  Endan or the
                Subsidiaries,  and there have been no disputes  between Endan or
                the  Subsidiaries  and any number or category of  employees  and
                there are no present  circumstances  which are reasonably likely
                to give rise to any such dispute.

        5.11.6  The  severance  pay (Pitzuie  Piturin)  due to the  employees of
                Endan and the  Subsidiaries  is fully  funded or provided for in
                accordance  with Israeli GAAP,  all  liabilities of Endan or the
                Subsidiaries in connection with their respective  employees were
                adequately  accrued in the Financial  Statements and, other than
                as set  forth in the  Endan  Disclosure  Schedule,  Endan is not
                aware of any  circumstance  whereby any  employee  might  demand
                (whether  legally entitled to or not) any claim for compensation
                on termination of employment beyond the statutory  severance pay
                to which such employee is entitled.  All obligations of Endan or
                the Subsidiaries with respect to statutorily  required severance
                payments  have  been  fully  satisfied  or have  been  funded by
                contributions  to  appropriate   insurance  funds  or  otherwise
                provided for in the Endan  Financial  Statements or disclosed in
                the notes thereto.

        5.11.7  All  amounts  which  Endan or the  Subsidiaries  are  legally or
                contractually   required   to  either  (i)  deduct   from  their
                employees'  salaries and/or transfer to such employees'  pension
                or provident, life insurance,  incapacity insurance,  continuing
                education   fund  or  otherwise  or  (ii)  withhold  from  their
                employees'  salaries  and  pay to any  government,  governmental
                agency or  instrumentality  thereof as  required  by the Israeli
                Income Tax Ordinance  [New  Version] or otherwise  have, in each
                case,  been duly deducted,  withheld and paid, and neither Endan
                nor the Subsidiaries has any outstanding  obligation to make any
                such transfer or provision.

        5.11.8  Each of  Endan  and the  Subsidiaries  is in  compliance  in all
                material  respects with all applicable  legal  requirements  and
                contracts relating to employment,  employment practices,  wages,
                bonuses  and  terms  and  conditions  of  employment,  including
                employee compensation matters.

        5.11.9  Each of Endan and the Subsidiaries has good labor relations, and
                Endan  has no  knowledge  of any facts  indicating  that (i) the
                consummation  of the  transactions  contemplated  hereunder will
                have a material  adverse effect on the labor  relations of Endan
                or the  Subsidiaries,  or (ii) any of the  employees of Endan or
                the Subsidiaries intends to terminate his or her employment with
                such company.

        5.11.10 Except as disclosed in the Endan  Disclosure  Schedule,  neither
                the execution,  delivery or performance of this Agreement of the
                other   Transaction   Documents  nor  the  consummation  of  the
                Transactions  will  result  in  any  bonus,   golden  parachute,
                severance  or other  payment  or  obligation  to any  current or
                former employee or director of any of Endan or the Subsidiaries,
                or materially  increase the benefits  payable or provided to any
                current or former employee or


                                       17
<PAGE>

                director of any of Endan or the  Subsidiaries,  or result in any
                acceleration of the time of payment, provision or vesting of any
                such benefits. Without limiting the generality of the foregoing,
                the  consummation  of the  Transactions  will not  result in the
                acceleration  of vesting  of any  unvested  options  outstanding
                under any option plan or other incentive plan of any of Endan or
                the Subsidiaries.

5.12.   Agreements, Scheduled Contracts and Commitments.

        5.12.1  Scheduled Contracts. Except as set forth in the Endan Disclosure
                Schedule,  neither Endan nor the Subsidiaries has, is a party to
                or is bound by:

        (i)     any collective bargaining agreements;

        (ii)    any agreements or arrangements that contain any severance pay or
                post-employment  liabilities  or  obligations in excess of those
                required by law;

        (iii)   any  bonus,  deferred  compensation,  sales  compensation  plan,
                pension,  profit  sharing  or  retirement  plans,  or any  other
                employee  benefit plans or  arrangements or agreements to change
                any such plans whether written or oral;

        (iv)    any  employment  or  consulting  agreement  with an  employee or
                individual  consultant,  or any  consulting  or sales  agreement
                under which a firm or other  organization  provides  services to
                Endan  or the  Subsidiaries  in  any  case  involving  aggregate
                payments in excess of $15,000 or the  equivalent  thereof in one
                year;

        (v)     any agreement or plan,  including  any stock option plan,  stock
                appreciation  rights  plan or stock  purchase  plan,  any of the
                benefits of which will be increased,  or the vesting of benefits
                of which will be  accelerated,  by the  occurrence of any of the
                Transactions  or the value of any of the  benefits of which will
                be calculated on the basis of any of the Transactions ;

        (vi)    any fidelity or surety bond or completion bond;

        (vii)   any lease of personal  property  having a value  individually in
                excess of $15,000 or the equivalent thereof;

        (viii)  any  agreement  of  indemnification  or  guaranty  other than as
                expressly set forth in the Endan Disclosure Schedule;

        (ix)    any agreement  pursuant to which Endan or the  Subsidiaries  has
                granted,  or may grant in the future, to any party a source-code
                license or option or other right to use or acquire source-code;

        (x)     any  agreement  relating to capital  expenditures  and involving
                future payments in excess of $50,000 or the equivalent thereof;


                                       18
<PAGE>

        (xi)    any agreement  relating to the  disposition  or  acquisition  of
                assets,  property  or any  interest in any  business  enterprise
                outside  the  ordinary  course of Endan's  or the  Subsidiaries'
                business;

        (xii)   any  mortgage,  indenture,  loan or credit  agreement,  security
                agreement  or other  agreement  or  instrument  relating  to the
                borrowing  of  money  or  extension  of  credit,  including  any
                guaranty referred to in clause (viii) of this Section 5.12.1;

        (xiii)  any purchase order or contract for the purchase of raw materials
                or services involving $50,000 or the equivalent thereof or more;

        (xiv)   any construction contract;

        (xv)    any distribution, joint marketing or development agreement;

        (xvi)   any other  agreement  that  involves  $50,000 or the  equivalent
                thereof or more or is not cancelable without penalty upon notice
                of thirty (30) days or less;

        (xvii)  any  contract  under  which Endan or the  Subsidiaries  provides
                services to third parties for which it will receive  payments in
                excess of  $15,000 or the  equivalent  thereof in a period of 12
                consecutive months;

        (xviii) any contract  that contains a liquidated  damages  provision for
                failure to meet performance or quality milestones; or

        (xix)   any other material  agreement or commitment,  whether written or
                oral.

        5.12.2  Loss Contracts.  The Endan  Disclosure  Schedule  identifies all
                contracts  (whether  fixed  price or time and  materials  with a
                price cap or other contract  having similar  effect) under which
                Endan or the  Subsidiaries  provides  products  or services to a
                third party and as to which the cost of performance has exceeded
                or is likely to exceed the  contract  price and also sets forth,
                with  respect  to each such  contract,  the amount by which such
                cost of performance  exceeds such contract price.  Except as set
                forth in the Endan  Disclosure  Schedule,  all  contracts  under
                which  Endan or the  Subsidiaries  provides  services to a third
                party are capable of being  performed at a cost equal to or less
                than the contract price.

        5.12.3  No  Contract   Breaches.   Except  for  such  alleged  breaches,
                violations  and  defaults,  and events that would  constitute  a
                breach,  violation or default with the lapse of time,  giving of
                notice,  or  both,  as are all  noted  in the  Endan  Disclosure
                Schedule, neither Endan nor the Subsidiaries has in any material
                respect  breached,  violated  or  defaulted  under,  or received
                notice that it has  materially  breached,  violated or defaulted
                under, any of the terms or conditions of any agreement, contract
                or commitment  required to be set forth in the Endan  Disclosure
                Schedule  pursuant  to  Sections  5.12.1  or  5.12.2  (any  such
                agreement,  contract or commitment,  regardless of whether it is
                set  forth  on such  schedule,  a  "Scheduled  Contract").  Each
                Scheduled  Contract is in full force and effect  and,  except as
                otherwise  disclosed in the Endan  Disclosure  Schedule,  is not
                subject to any default thereunder of which the


                                       19
<PAGE>

                Endan  Warrantors have knowledge by any party obligated to Endan
                or the Subsidiaries pursuant thereto.

5.13.   Interested  Party  Transactions.  Except  as  set  forth  in  the  Endan
        Disclosure Schedule, no member, manager,  officer, director or Affiliate
        of Endan or the  Subsidiaries,  has or has had during the past three (3)
        years, directly or indirectly, (i) an economic interest of 5% or more in
        any Person which has furnished or sold, or furnishes or sells,  services
        or  products  that  Endan or the  Subsidiaries  furnishes  or sells,  or
        proposes to furnish or sell, (ii) an economic  interest of 5% or more in
        any Person that  purchases  from or sells or furnishes  to, Endan or the
        Subsidiaries,  any goods or services, (iii) a beneficial interest in any
        Scheduled  Contract or (iv) any  contractual or other  arrangement  with
        Endan or the Subsidiaries.

5.14.   Intellectual Property.

        5.14.1  The Endan  Disclosure  Schedule sets forth,  with respect to the
                Intellectual  Property  owned,  in whole  or in part,  including
                jointly with others,  by Endan or the  Subsidiaries,  a complete
                and  accurate  list of all (a) patents and patent  applications;
                (b)  Trademark   registrations  and  applications  and  material
                unregistered  Trademarks;  and (c) copyright  registrations  and
                applications,  indicating for each, the applicable jurisdiction,
                registration number (or application number), and date issued (or
                date  filed).  For  purposes  of this  Agreement,  "Intellectual
                Property"   means:   trademarks   and  service  marks   (whether
                registered or  unregistered),  trade names,  designs and general
                intangibles of like nature,  together with all goodwill  related
                to   the   foregoing   (collectively,   "Trademarks");   patents
                (including any  continuations,  continuations  in part,  reissue
                patents,  reexamination certificates and applications for any of
                the foregoing) (collectively  "Patents");  copyrights (including
                any   registrations   and  applications   therefor  and  whether
                registered   or   unregistered)   (collectively   "Copyrights");
                computer software;  databases; works of authorship;  mask works;
                technology;  trade secrets and other  confidential  information,
                know-how,  proprietary processes,  formulae, algorithms, models,
                user  interfaces,   customer  lists,  inventions,   discoveries,
                concepts,  ideas,  techniques,  methods,  source  codes,  object
                codes,  methodologies and, with respect to all of the foregoing,
                related confidential data or information  (collectively,  "Trade
                Secrets").

        5.14.2  Patents

                (i)     All  Patents  are  currently  in  compliance  with legal
                        requirements (including payment of filing,  examination,
                        and maintenance fees and proofs of working or use) other
                        than any requirement  that, if not satisfied,  would not
                        result in a revocation  or otherwise  materially  affect
                        the enforceability of the Patent in question.  The Endan
                        Disclosure  Schedule  sets forth a complete and accurate
                        list of the patents owned, or previously owned, by Endan
                        or the Subsidiaries.

                (ii)    No  Patent   has  been  or  is  now   involved   in  any
                        interference,   reissue,   reexamination   or   opposing
                        proceeding before any Governmental


                                       20
<PAGE>

                        Entity.  To Endan's  knowledge,  no such action has been
                        threatened  within the one-year period prior to the date
                        of this Agreement.

                (iii)   There  is  no  patent,   patent   application,   printed
                        publication  or  other  prior  art  of any  person  that
                        conflicts in any material respect with any Patent.

        5.14.3  Trade Secrets.

                (i)     Endan  has  taken  the  steps  described  in  the  Endan
                        Disclosure   Schedule  to  protect   Endan's  rights  in
                        confidential information and Trade Secrets of Endan.

                (ii)    Without limiting the generality of Section 5.14.3(i) and
                        except as would not be  materially  adverse  to Endan or
                        its business,  Endan enforces a policy of requiring each
                        relevant employee,  consultant and contractor to execute
                        proprietary information,  confidentiality and assignment
                        agreements  substantially  in  Endan's  standard  forms,
                        copies of which have been furnished to DSI, and,  except
                        under  confidentiality  obligations,  there  has been no
                        disclosure  by  Endan  or  any  Subsidiary  of  material
                        confidential information or Trade Secrets.

        5.14.4  License  Agreements.  The Endan Disclosure Schedule sets forth a
                complete and accurate list of all license agreements granting to
                Endan or the  Subsidiaries any material right to use or practice
                any rights  under any  Intellectual  Property  other than office
                automation   software   used   generally   in   Endan's  or  the
                Subsidiaries'  operations and other software that is not used in
                connection with the design,  development,  use,  maintenance and
                support,  testing,  assembly and  manufacture  of Endan's or the
                Subsidiaries'   products  and  is   commercially   available  on
                reasonable terms to any person for a license fee of no more than
                $50,000 or the equivalent  thereof  (collectively,  the "Inbound
                License  Agreements"),  indicating  for each the  title  and the
                parties  thereto and the amount of any future royalty or license
                fee payable thereunder. The Endan Disclosure Schedule sets forth
                a complete and  accurate  list of all license  agreements  under
                which  Endan or the  Subsidiaries  licenses  software  or grants
                other   rights  to  use  or  practice   any  rights   under  any
                Intellectual Property, excluding licenses with customers that in
                the twelve-month  period prior to the date hereof have purchased
                or licensed  products for which the total  payments to Endan and
                the  Subsidiaries  did  not  exceed  $50,000  or the  equivalent
                thereof  (collectively,   the  "Outbound  License  Agreements"),
                indicating for each the title and the parties thereto.  There is
                no material outstanding or, to the Endan Warrantors'  knowledge,
                threatened  dispute or disagreement  with respect to any Inbound
                License Agreement or any Outbound License Agreement.

        5.14.5  Ownership;  Sufficiency of IP Assets. Except as set forth in the
                Endan Disclosure  Schedule  (including the rights of Mr. Shabath
                to certain profits in connection  with  EasyBill),  Endan or the
                Subsidiaries owns or possesses adequate licenses or other rights
                to use, free and clear of Liens,  orders and arbitration awards,
                all of its  Intellectual  Property  used in and necessary to the
                conduct of its business. The Intellectual Property identified in
                the Endan  Disclosure  Schedule,  together  with Endan's and the
                Subsidiaries'   unregistered  copyrights  and  Endan's  and  the
                Subsidiaries' rights under the licenses granted


                                       21
<PAGE>

                to  Endan  or  the   Subsidiaries   under  the  Inbound  License
                Agreements,  constitute all the material  Intellectual  Property
                rights used in the  operation  of Endan's and the  Subsidiaries'
                businesses  as  they  are  currently  conducted  and are all the
                Intellectual   Property   rights   necessary   to  operate  such
                businesses  after the  Closing  Date in  substantially  the same
                manner as such  businesses  have been  operated  by Endan  prior
                thereto.

        5.14.6  No  Infringement  by Endan.  To the best  knowledge of the Endan
                Warrantors and Endan, the products used, manufactured, marketed,
                sold  or  licensed  by  Endan  and  the  Subsidiaries,  and  all
                Intellectual  Property  used in the  conduct of Endan's  and the
                Subsidiaries' businesses as currently conducted, do not infringe
                upon,  violate or constitute the  unauthorized use of any rights
                owned  or   controlled   by  any  third  party,   including  any
                Intellectual Property of any third party.

        5.14.7  No Pending or Threatened  Infringement  Claims. No litigation is
                now or,  within  the three  (3) years  prior to the date of this
                Agreement,  was pending and, to Endan's knowledge,  no notice or
                other claim in writing has been received by Endan within the one
                (1)  year  period  prior  to the  date  of this  Agreement,  (i)
                alleging  that  Endan or the  Subsidiaries  has  engaged  in any
                activity  or  conduct  that   infringes   upon,   violates,   or
                constitutes the unauthorized  use of the  Intellectual  Property
                rights of any third  party or (ii)  challenging  the  ownership,
                use,  validity or  enforceability  of any Intellectual  Property
                owned or exclusively  licensed by Endan.  Except as specifically
                disclosed  in the Endan  Disclosure  Schedules  pursuant to this
                Section  5.14,  no  Intellectual  Property  owned or licensed by
                Endan or the  Subsidiaries is subject to any outstanding  order,
                judgment,  decree,  stipulation or agreement (other than Inbound
                License Agreements)  restricting the use thereof by Endan or the
                Subsidiaries  or,  in  the  case  of any  Intellectual  Property
                licensed to others,  restricting the sale, transfer,  assignment
                or licensing thereof by Endan or the Subsidiaries to any person.

        5.14.8  No Infringement by Third Parties.  To the knowledge of the Endan
                Warrantors and Endan, no person is misappropriating, infringing,
                diluting,  or  violating  any  Intellectual  Property  owned  or
                exclusively  licensed by Endan or the Subsidiaries,  and no such
                claims  have been  brought  against  any  person by Endan or the
                Subsidiaries.

        5.14.9  Assignment;  Change of  Control.  The  execution,  delivery  and
                performance by the Shareholders, Noy or Endan of this Agreement,
                and the  consummation by the  Shareholders,  Noy or Endan of the
                Transactions  , will not result in the loss or impairment of, or
                give rise to any right of any third party to  terminate,  any of
                Endan's  or  the   Subsidiaries'   rights  to  own  any  of  its
                Intellectual  Property  or their  respective  rights  under  the
                Inbound  License  Agreements,  nor  require  the  consent of any
                Governmental  Entity  or  third  party  in  respect  of any such
                Intellectual Property.

        5.14.10 Software.  The Software  owned or purported to be owned by Endan
                or the Subsidiaries and used in its business ("Owned  Software")
                was  either  (i)   developed   by  employees  of  Endan  or  the
                Subsidiaries   within  the  scope  of  their  employment;   (ii)
                developed by independent contractors who have assigned


                                       22
<PAGE>

                their  rights to Endan or the  Subsidiaries  pursuant to written
                agreements;   or  (iii)  otherwise  acquired  by  Endan  or  the
                Subsidiaries  from a third party.  The Owned  Software  does not
                contain any programming  code,  documentation or other materials
                or development  environments that embody  Intellectual  Property
                rights  of any  person  other  than  Endan or the  Subsidiaries,
                except for such materials or development  environments  obtained
                by Endan or the  Subsidiaries  from other  persons who make such
                materials or development environments generally available to all
                interested  purchasers or end-users on standard commercial terms
                or as negotiated  between  Endan and any such other person.  For
                purposes  hereof,  "Software"  means  any and  all (i)  computer
                programs,  including  any and all  software  implementations  of
                algorithms, models and methodologies,  whether in source code or
                object code, (ii) databases and compilations,  including any and
                all data and collections of data,  whether  machine  readable or
                otherwise,  (iii)  descriptions,   flow-charts  and  other  work
                product  used to design,  plan,  organize and develop any of the
                foregoing,  and (iv) all  documentation,  including user manuals
                and training materials, relating to any of the foregoing.

        5.14.11 Performance  of  Existing  Software  Products..  All of (i)  the
                Software   products  that  are  manufactured  by  Endan  or  the
                Subsidiaries and (ii) any Software products marketed by Endan or
                the  Subsidiaries  as to  which  Endan  or any  such  Subsidiary
                warrants  performance  to the  end  user  thereof  (collectively
                "Software   Products")   listed  and   described  in  the  Endan
                Disclosure  Schedule perform in all material  respects,  free of
                significant bugs or programming  errors, the functions described
                in any protocol or standard  applicable to the product,  and any
                agreed   specifications  or  end  user  documentation  or  other
                information  provided  to  customers  of  Endan  on  which  such
                customers  relied  when  licensed  or  otherwise  acquired  such
                products.

        5.14.12 Employee Confidentiality Agreements.  Except as set forth in the
                Endan Disclosure Schedule,  all current and former employees and
                consultants  of  Endan or the  Subsidiaries  have  entered  into
                confidentiality,    invention    assignment   and    proprietary
                information  agreements  with Endan or the  Subsidiaries  in the
                form  provided  to  DSI.  To the  best  knowledge  of the  Endan
                Warrantors and Endan,  no employee or consultant of Endan or the
                Subsidiaries  is  obligated   under  any  agreement   (including
                licenses,  covenants or commitments of any nature) or subject to
                any  judgment,  decree or order of any  court or  administrative
                agency,  or any other  restriction that would interfere with the
                use of his or her best  efforts  to carry out his or her  duties
                for Endan or the  Subsidiaries  (other than time  commitments of
                independent  contractors  to their other  clients) or that would
                conflict  with  Endan's  or  the  Subsidiaries'   business.  The
                carrying  on of Endan's and the  Subsidiaries'  business by such
                employees and contractors of Endan or the  Subsidiaries  and the
                conduct of Endan's and the  Subsidiaries'  business as presently
                proposed,  will not,  conflict with or result in a breach of the
                terms,  conditions  or  provisions  of, or  constitute a default
                under, any contract, covenant or instrument under which Endan or
                the  Subsidiaries,  or  to  the  best  knowledge  of  the  Endan
                Warrantors and Endan,  any of such employees or consultants,  is
                now  obligated.  Except  as set  forth in the  Endan  Disclosure
                Schedule,  it is not necessary to utilize any  inventions or any
                other Intellectual Property of any


                                       23
<PAGE>

                employees  of  or  consultants  to  Endan  or  the  Subsidiaries
                acquired prior to their  employment by Endan or the Subsidiaries
                in order to carry on the business of Endan and the  Subsidiaries
                as presently  conducted.  At no time during the conception of or
                reduction to practice of any of  Intellectual  Property owned by
                Endan or the Subsidiaries  was any developer,  inventor or other
                contributor to such  Intellectual  Property  operating under any
                grants  from  any   Governmental   Entity  or  private   source,
                performing  research  sponsored  by any  Governmental  Entity or
                private  source  or  subject  to  any  employment  agreement  or
                invention   assignment  or  nondisclosure   agreement  or  other
                obligation  with any third  party  that could  adversely  affect
                Endan's  or  the  Subsidiaries'   rights  in  such  Intellectual
                Property.

        5.14.13 Export  Restrictions.  Neither  Endan nor the  Subsidiaries  has
                exported or transmitted Software or other material in connection
                with  Endan's or the  Subsidiaries'  business  to any country to
                which  such  export  or   transmission   is  restricted  by  any
                applicable law,  without first having obtained all necessary and
                appropriate government licenses or permits.

5.15.   Insurance.  Each of  Endan  and  the  Subsidiaries  maintains  insurance
        policies (the "Insurance Policies") against all risks of a character and
        in such amounts as are usually  insured  against by  similarly  situated
        companies in the same or similar businesses. Each Insurance Policy is in
        full force and effect and is valid, outstanding and enforceable, and all
        premiums  due  thereon  have  been paid in full.  None of the  Insurance
        Policies will terminate or lapse (or be affected in any other materially
        adverse  manner)  by  reason  of the  transactions  contemplated  by the
        Transaction  Documents.  Each of Endan and the Subsidiaries has complied
        with the  provisions  of each  Insurance  Policy  under  which it is the
        insured  party.  No insurer under any  Insurance  Policy has canceled or
        generally  disclaimed  liability  under any such policy or, to the Endan
        Warrantors' knowledge, indicated any intent to do so or not to renew any
        such policy.  All material claims under the Insurance Policies have been
        filed in a timely fashion.

5.16.   Certain  Business  Practices.  None of Endan,  the  Subsidiaries  or any
        directors,  officers,  agents or employees of Endan or the  Subsidiaries
        has (i) used any funds for unlawful contributions,  gifts, entertainment
        or other unlawful expenses related to political activity,  (ii) made any
        unlawful  payment  to  foreign  or  domestic  government   officials  or
        employees  or to foreign or domestic  political  parties or campaigns or
        violated  any  provision  of  applicable  law,  or (iii)  made any other
        unlawful payment.

5.17.   Restrictions  on Business  Activities.  Except as set forth in the Endan
        Disclosure Schedule,  there is no agreement  (non-compete or otherwise),
        judgment, injunction, order or decree to which Endan or the Subsidiaries
        is a party or otherwise  binding upon Endan or the Subsidiaries that has
        or is reasonably  likely to have the effect of  prohibiting or impairing
        any business practice of Endan or the  Subsidiaries,  any acquisition of
        property  (tangible or intangible) by Endan or the  Subsidiaries  or the
        conduct of business by Endan or the  Subsidiaries.  Without limiting the
        foregoing, except as set forth in the Endan Disclosure Schedule, neither
        Endan nor the  Subsidiaries  has entered into any agreement  under which
        Endan or any such  subsidiary is restricted  from selling,  licensing or
        otherwise  distributing any of its


                                       24
<PAGE>

        products  or  providing  services  to any  class  of  customers,  in any
        geographic  area,  during  any  period of time or in any  segment of the
        market.

5.18.   Product and Service  Warranties.  Complete  and  accurate  copies of the
        written warranties and guaranties by Endan or the Subsidiaries currently
        in effect with  respect to any of its  products  or  services  have been
        delivered to DSI. There have not been any material  deviations from such
        warranties and guaranties,  and neither Endan,  the Subsidiaries nor any
        of their  respective  salesmen,  employees,  distributors  and agents is
        authorized  to  undertake  warranty  and  guaranty  obligations  to  any
        customer  or to other  third  parties  in excess of such  warranties  or
        guaranties.  Except  as set  forth  in the  Endan  Disclosure  Schedule,
        neither  Endan  nor the  Subsidiaries  has  made any  oral  warranty  or
        guaranty with respect to any of its products or services.

5.19.   Brokers.  No broker,  finder or  investment  banker is  entitled  to any
        brokerage  finder's or other fee or commission  in  connection  with the
        transactions contemplated by this Agreement based upon arrangements made
        by or on behalf of Endan, Noy or any of the Shareholders.

5.20.   Minute  Books.  The  minute  books of Endan  and the  Subsidiaries  made
        available to DSI are the only minute books of Endan and the Subsidiaries
        and  contain a  reasonably  accurate  summary  of all  actions  taken at
        meetings of the Board of  Directors  (or  committees  thereof) or at the
        General  Meetings of the  shareholders  of Endan or the  Subsidiaries or
        actions by written  consent since the time of  organization of Endan and
        the Subsidiaries, respectively.

5.21.   Taxes.  Endan and the Subsidiaries  have accurately  prepared and timely
        filed all income and payroll tax returns and filings  that are  required
        to be filed by them (the "Tax  Returns") and have paid or made provision
        for the payment of all amounts due pursuant to such returns. None of the
        Tax Returns have been audited by any taxing authority, and neither Endan
        nor the Subsidiaries have been advised that any of such Tax Returns will
        be so  audited,  and there are no  waivers  in effect of the  applicable
        statute of  limitations  for any period.  No  deficiency  assessment  or
        proposed  adjustment  of  income  or  payroll  taxes  of  Endan  and the
        Subsidiaries  is pending and Endan has no knowledge,  after due inquiry,
        of any proposed  liability for any tax to be imposed on Endan other than
        in the ordinary course of business.

5.22.   Full Disclosure.  Neither this Agreement,  the Endan Disclosure Schedule
        nor any certificates  made or delivered by Endan in connection  herewith
        contains  any untrue  statement  of a material  fact or omits to state a
        material  fact  necessary to make the  statements  herein or therein not
        misleading, in view of the circumstances in which they were made. To the
        best knowledge of the Endan  Warrantors and Endan,  there is no material
        fact or  information  relating  to the  business,  prospects,  condition
        (financial or otherwise),  affairs,  operations, or assets of Endan that
        has not been disclosed to DSI or DSSI in writing by Endan.



                                       25
<PAGE>

                                   Article VI

                      Representations and Warranties of DSI

        Each of DSSI and DSI hereby represents and warrants to the Shareholders,
subject to the  exceptions  set forth in the DSI  Disclosure  Schedule  attached
hereto as  Schedule 6 (the "DSI  Disclosure  Schedule"),  which  exceptionsshall
apply to any and all  representations  and warranties set forth herein (provided
that no such  exceptions  shall apply to Sections  6.1.1 (first two  sentences),
6.2, 6.3, 6.5 and 6.20), that:

6.1.    Organization and Qualification; Subsidiaries; Investments.

        6.1.1   Each  of DSI  and the DSI  Subsidiaries  is duly  organized  and
                validly  existing under the laws of Israel and has all requisite
                power and authority to own,  lease and operate their  properties
                and to carry on their businesses as now being conducted. DSI has
                all  requisite  power and  authority to execute and deliver this
                Agreement and the other  Transaction  Documents to which it is a
                party and to consummate  the  Transactions.  DSI has  heretofore
                delivered to the  Shareholders  accurate and complete  copies of
                its Constitutional Documents and the Constitutional Documents of
                the DSI  Subsidiaries as currently in effect.  Other than as set
                forth on the DSI Disclosure  Schedule,  DSI has no  subsidiaries
                and  has  no  equity   investments,   ownership  or  partnership
                interests in any other Person.

        6.1.2   Each  of DSI  and the DSI  Subsidiaries  is  duly  qualified  or
                licensed   and  in  good   standing   to  do  business  in  each
                jurisdiction in which the property owned,  leased or operated by
                them or the nature of the business  conducted by them makes such
                qualification   or   licensing   necessary,   except   in   such
                jurisdictions  where  the  failure  to be so duly  qualified  or
                licensed and in good standing would not,  individually or in the
                aggregate,  have a  Material  Adverse  Effect on DSI and the DSI
                Subsidiaries, individually and taken as a whole.

6.2.    Capitalization of DSI and the DSI Subsidiaries.

        The  authorized  capital  of DSI and each of the DSI  Subsidiaries,  the
        number of issued  shares of each class of its capital and the holders of
        such  shares,   both  prior  to  giving   effect  to  the   transactions
        contemplated  at the Closing and after giving  effect  thereto,  are set
        forth in the DSI Disclosure  Schedule.  As of the date hereof (and prior
        to giving  effect to the  transactions  contemplated  under  Section 2.3
        hereof),  no Ordinary  Shares are reserved for issuance and are issuable
        upon the  exercise  of  outstanding  share  options  issued  pursuant to
        options  agreements to which DSI is a party and there are no outstanding
        DSI share options.  Except as set forth above, there are outstanding (i)
        no shares or other voting  securities  of DSI, (ii) no securities of DSI
        convertible into or exchangeable or exercisable for shares of DSI, (iii)
        no options or other rights to acquire from DSI,  and no  obligations  of
        DSI to issue, any shares,  capital stock or securities  convertible into
        or  exchangeable  or  exercisable  for  shares of DSI and (iv) no equity
        equivalent  interests  in the  ownership  or  earnings  of DSI or  other
        similar rights  (collectively "DSI Securities").  As of the date hereof,
        there are no outstanding


                                       26
<PAGE>

        rights or obligations of DSI to repurchase,  redeem or otherwise acquire
        any DSI  Securities  and there  are no  shareholder  agreements,  voting
        trusts or other agreements or  understandings to which DSI or any of its
        shareholder is a party or by which it is bound relating to the voting or
        registration of any shares of DSI. All of the outstanding  shares of the
        DSI Subsidiaries are owned by DSI, directly,  free and clear of any Lien
        or any other limitation or restriction (including any restriction on the
        right to vote or sell the same  except as may be provided as a matter of
        law).

6.3.    Issuance of DSI Shares.

        Upon the issuance of the DSI Shares to the Shareholders in consideration
        for the Shares pursuant to Article III of this Agreement, the DSI Shares
        shall be validly issued, fully paid, non-assessable,  free of preemptive
        rights (except as is set forth in the Amended Articles) and of any Liens
        or   encumbrances,   and  registered  in  the  name  of  the  respective
        Shareholders in the registry of DSI.

6.4.    Financial Statements.

        6.4.1   DSI has delivered to the Shareholders  copies of DSI's financial
                statements  (hereinafter  collectively called the "DSI Financial
                Statements"),  which have been prepared in all material respects
                in accordance with U.S. generally accepted accounting principles
                consistently  applied  and  maintained  throughout  the  periods
                indicated  and  fairly   present  the   consolidated   financial
                condition of DSI as of the dates  thereof and the results of its
                operations for the periods  covered  thereby  (subject to normal
                year-end  adjustments)  as follows:  (i) unaudited  consolidated
                statement  of  operations  and balance  sheet for the nine month
                period ending September 30, 2001, and (ii) audited  consolidated
                balance  sheets of DSI as at  December  31, 2000 and the related
                consolidated  statements  of  operations  for  the  years  ended
                December 31, 2000,  accompanied by the audit opinions thereon of
                Somech  Chaikin,  DSI's  independent  public  accountants.   The
                consolidated  balance  sheets of DSI at  December  31,  2000 and
                September 30, 2001 are referred to herein, collectively,  as the
                "DSI Balance Sheet" and September 30, 2001 is referred to herein
                as the "DSI Balance Sheet Date".

        6.4.2   Except as set forth in the DSI Financial  Statements,  or in the
                DSI Disclosure  Schedule,  the statements of operations included
                therein do not  contain  any items of  special  or  nonrecurring
                revenue or any other income not earned in the ordinary course of
                business except as expressly specified therein,  and the interim
                financial statements include all adjustments, which consist only
                of normal recurring accruals, necessary for a fair presentation.

6.5.    Authorization;  Consents and  Approvals;  No  Violations.  All corporate
        action  on the  part  of DSI  necessary  for  authorization,  execution,
        delivery,  and  performance  of  all of  DSI's  obligations  under  this
        Agreement  and the other  Transaction  Documents to which DSI is a party
        shall have been taken,  and DSI has delivered to the  Shareholders  duly
        adopted  resolutions  of its Board of Directors and of its  Shareholders
        authorizing  the  same.   This  Agreement  and  the  other   Transaction
        Documents,  when  executed and  delivered by or on behalf of DSI,  shall
        constitute the valid and legally  binding  obligations  of DSI,  legally
        enforceable  against DSI in accordance with their  respective  terms. No
        filing  with or  notice  to and no  permit,  authorization,  consent  or


                                       27
<PAGE>

        approval of any  Governmental  Entity is necessary for the execution and
        delivery  by DSI of  this  Agreement  or  any of the  other  Transaction
        Documents  to  which  DSI is a party or the  consummation  by DSI of the
        Transactions.  Neither the execution,  delivery and  performance of this
        Agreement  or any of the other  Transaction  Documents to which DSI is a
        party nor the consummation by DSI of the Transactions  will (i) conflict
        with or result  in any  breach of any  provision  of the  Constitutional
        Documents of DSI or the DSI Subsidiaries,  (ii) result in a violation or
        breach of or constitute  (with or without due notice or lapse of time or
        both) a default  (or give rise to any right of  termination,  amendment,
        cancellation or acceleration  or Lien) under any note,  bond,  mortgage,
        indenture,  lease, license,  contract,  agreement or other instrument or
        obligation to which DSI or the DSI  Subsidiaries  is a party or by which
        DSI or any of its properties or assets may be bound or (iii) violate any
        order,  writ,  injunction,  decree,  law,  statute,  rule or  regulation
        applicable  to DSI or the DSI  Subsidiaries  or any of their  respective
        properties or assets.

6.6.    No Default. Except as set forth in the DSI Disclosure Schedule,  neither
        DSI nor the DSI Subsidiaries is in breach,  default or violation (and no
        event has  occurred  that with notice or the lapse of time or both would
        constitute a breach,  default or  violation)  of any term,  condition or
        provision of (i) their  Constitutional  Documents,  (ii) any note, bond,
        mortgage,  indenture, or license or other material,  contract, agreement
        or  instrument  or obligation to which they are a party or by which they
        or any of their  properties  or assets  may be bound or (iii) any order,
        writ, injunction, decree, law, statute, rule or regulation applicable to
        DSI or the DSI Subsidiaries or any of their properties or assets.

6.7.    No  Undisclosed  Liabilities;  Absence of Changes.  Except as and to the
        extent set forth in the DSI Disclosure  Schedule or as and to the extent
        expressly  set forth or provided for or reserved  against in DSI Balance
        Sheet,  neither DSI nor the DSI  Subsidiaries  have any  liabilities  or
        obligations  of any  nature,  whether  or  not  accrued,  contingent  or
        otherwise,  that would be required by U.S. generally accepted accounting
        principles  to be reflected  on a balance  sheet of DSI  (including  the
        notes  thereto),   other  than   liabilities   and  obligations   which,
        individually  or in the  aggregate,  will  not have a  Material  Adverse
        Effect  on  DSI.  Except  as and to the  extent  set  forth  in the  DSI
        Disclosure  Schedule,  since the DSI Balance Sheet Date, there have been
        no  events,  changes  or  effects  with  respect  to  DSI  and  the  DSI
        Subsidiaries  that have had or would  reasonably  be  expected to have a
        Material  Adverse Effect on DSI.  Without limiting the generality of the
        foregoing,  except  as  and to  the  extent  as  set  forth  in the  DSI
        Disclosure  Schedule,  since the DSI Balance Sheet Date, each of DSI and
        the DSI  Subsidiaries  have conducted  their  businesses in all material
        respects only in, and has not engaged in any material  transaction other
        than  according  to, the ordinary  and usual  course of such  businesses
        consistent with past practices,  and there has not been any (i) material
        adverse change in the financial condition, properties, business, results
        of operations or prospects of DSI or the DSI Subsidiaries;  (ii) damage,
        destruction or other casualty loss with respect to any material asset or
        property owned,  leased or otherwise used by DSI or the DSI Subsidiaries
        and which is not covered by insurance; (iii) declaration,  setting aside
        or  payment  of any  dividend  or other  distribution  in respect of any
        shares of DSI or any repurchase,  redemption or other acquisition by DSI
        of any  outstanding  shares or other  securities of, or other  ownership
        interests in


                                       28
<PAGE>

        DSI; (iv) amendment of any material term of any outstanding  security of
        DSI;  (v)  incurrence,  assumption  or  guarantee  by  DSI  or  the  DSI
        Subsidiaries  of any  indebtedness  for borrowed money other than in the
        ordinary course of business and in amounts and on terms  consistent with
        past  practices  (but  in  all  events  not  exceeding  $15,000  or  the
        equivalent thereof in the aggregate); (vi) creation or assumption by any
        of DSI or the DSI  Subsidiaries  of any Lien on any material asset other
        than in the ordinary  course of business  consistent with past practices
        (not  exceeding$15,000  or the equivalent  thereof in the aggregate with
        respect to the Indebtedness  underlying such Liens); (vii) loan, advance
        or  capital  contributions  made  by  DSI or the  DSI  Subsidiaries,  or
        investment  in, any person other than (x) loans or advances to employees
        in connection with business-related  travel, (y) loans made to employees
        consistent  with past  practices that are not in the aggregate in excess
        of $15,000 or the equivalent thereof, and (z) loans, advances or capital
        contributions to or investments by DSI in the DSI  Subsidiaries,  and in
        each case made in the ordinary  course of business  consistent with past
        practices;  (viii)  transaction  or commitment  made, or any contract or
        agreement entered into, by DSI or the DSI Subsidiaries relating to their
        assets or business  (including  the  acquisition  or  disposition of any
        assets)  or any  relinquishment  by DSI or the DSI  Subsidiaries  of any
        contract,  agreement or other right, in any case, material to DSI or the
        DSI  Subsidiaries,  taken  as  a  whole,  other  than  transactions  and
        commitments  in the  ordinary  course of business  consistent  with past
        practices and those  contemplated by this  Agreement;  or (ix) change by
        DSI in its accounting  principles,  practices or methods.  Since the DSI
        Balance  Sheet Date,  except for  increases  in the  ordinary  course of
        business consistent with past practices, there has not been any increase
        in the  compensation  payable or that could become payable by DSI or the
        DSI  Subsidiaries to (a) officers of DSI or the DSI  Subsidiaries or (b)
        any  employee  of  DSI  or  the  DSI  Subsidiaries   whose  annual  cash
        compensation is the equivalent of $70,000 or more.

6.8.    Indebtedness; Bank Accounts; Receivables; Customers.

        6.8.1   The DSI  Disclosure  Schedule  provides  accurate  and  complete
                information (including amount and name of payee) with respect to
                all Indebtedness of DSI or the DSI Subsidiaries.

        6.8.2   Except as set forth in the DSI Disclosure Schedule, all existing
                Receivables   (including  those  Receivables  reflected  on  DSI
                Balance  Sheet  that  have  not yet  been  collected  and  those
                Receivables  that have arisen  since DSI Balance  Sheet Date and
                have not yet been collected) (i) represent valid  obligations of
                customers of DSI or the DSI Subsidiaries  arising from bona fide
                transactions  entered into in the  ordinary  course of business,
                and  (ii)  have  been  collected  or are  current  and  will  be
                collected   by  DSI  or  the  DSI   Subsidiaries   (without  any
                counterclaim  or set-off) within ninety (90) days after the date
                due or, with respect to those  Receivables  already more than 90
                days past due, 45 days after the Closing  Date, in each case net
                of an  allowance  for doubtful  accounts  not to exceed  amounts
                reserved for on DSI Balance Sheet.

        6.8.3   Neither DSI nor the DSI  Subsidiaries has received any notice or
                other communication  indicating that any customer (a) intends or
                expects  to  cease  dealing  with DSI or to  effect  a  material
                reduction  in the volume of business  transacted  by such person
                with DSI or the DSI Subsidiaries below historic


                                       29
<PAGE>

                levels  or (b)  intends  to  claim  that  any  of  the  services
                performed  for it by DSI or the DSI  Subsidiaries  prior  to the
                date hereof was sub-standard or deficient.

        6.8.4   Except as disclosed in the DSI Disclosure Schedule,  no customer
                of DSI or the DSI  Subsidiaries has a right of refund or set off
                from DSI or the DSI Subsidiaries.

6.9.    Litigation. Except as disclosed in the DSI Disclosure Schedule, there is
        no suit, claim, action,  proceeding or investigation  pending or, to the
        knowledge  of  DSSI  and  DSI,   threatened   against  DSI  or  the  DSI
        Subsidiaries or any of their respective properties or assets, or against
        any of their  respective  officers,  directors  or  employees  (in their
        capacity as such), before any Governmental  Entity.  Neither DSI nor the
        Subsidiaries is subject to any outstanding  order,  writ,  injunction or
        decree.  DSI shall  provide the  Shareholders  an audit  letter from its
        auditors  or a  letter  from its  counsel  to this  effect  prior to the
        Closing.

6.10.   Compliance with Applicable  Law. DSI and the DSI  Subsidiaries  hold all
        permits, licenses,  variances,  exemptions,  orders and approvals of all
        Governmental Entities necessary for the lawful conduct of its businesses
        (the "DSI Permits"), except for failures to hold such permits, licenses,
        variances, exemptions, orders and approvals that would not be reasonably
        expected to,  individually or in the aggregate,  have a Material Adverse
        Effect on DSI. DSI and the DSI  Subsidiaries  are in compliance with the
        terms of the DSI  Permits,  except  where the failure so to comply would
        not, individually or in the aggregate, have a Material Adverse Effect on
        DSI.  The  businesses  of DSI  and the DSI  Subsidiaries  are not  being
        conducted in violation of any  applicable  law,  ordinance or regulation
        the violation of which could reasonably be expected,  individually or in
        the   aggregate,   to  have  a  Material   Adverse  Effect  on  DSI.  No
        investigation or review by any  Governmental  Entity with respect to DSI
        or the DSI Subsidiaries is pending or, to the knowledge of DSI and DSSI,
        threatened,  nor, to the knowledge of DSSI and DSI, has any Governmental
        Entity  indicated an intention to conduct the same,  except as set forth
        in the DSI Disclosure Schedule.

6.11.   Title to Properties; Absence of Liens and Encumbrances.

        6.11.1  Neither DSI nor the  Subsidiaries  owns any fee  interest in any
                real property.  The DSI Disclosure Schedule sets forth a list of
                all  real   property   currently   leased  by  DSI  or  the  DSI
                Subsidiaries,  the name of the  lessor and the date of the lease
                and each  amendment  thereto.  All such  current  real  property
                leases are in full force and effect,  are valid and effective in
                accordance with their respective  terms, and there is not, under
                any of such leases,  any existing  material  default or event of
                default (or event  which with notice or lapse of time,  or both,
                would constitute a default) by or with respect to DSI or the DSI
                Subsidiaries, or to DSI and DSSI's knowledge, by or with respect
                to any third party.  Complete and correct  copies of such leases
                in  effect  on  the  date  hereof  have  been  delivered  to the
                Shareholders.

        6.11.2  DSI and the DSI Subsidiaries have good and valid title to or, in
                the  case of  leased  properties  and  assets,  valid  leasehold
                interests  in, all of their  material  properties  and  material
                assets,  whether tangible or intangible (including  Intellectual
                Property), real, personal and mixed, free and clear of any Liens


                                       30
<PAGE>

                except as reflected in the  Financial  Statements  or in the DSI
                Disclosure Schedule.

6.12.   Employee Benefit Plans; Labor Matters.

        6.12.1  The  DSI  Disclosure  Schedule  sets  forth a list as of the DSI
                Balance Sheet Date of (i) all  directors,  officers or employees
                of  DSI or the  DSI  Subsidiaries  and  correctly  reflects  the
                current  salary  and  any  other  compensation  payable  to such
                directors, officers or employees (including compensation payable
                pursuant  to  bonus,   deferred   compensation   or   commission
                arrangements  or in  connection  with any  manager's  insurance,
                education fund and health fund),  and such employee's  employer,
                date of  employment  and  position;  (ii)  all  agreements  with
                consultants  who  are  individuals  obligating  DSI or  the  DSI
                Subsidiaries to make annual cash payments in an amount exceeding
                $15,000  or  the   equivalent   thereof;   (iii)  all  severance
                agreements, programs and policies of DSI or the DSI Subsidiaries
                with or relating to their  employees  except such  programs  and
                policies  required to be  maintained by law; and (iv) all plans,
                programs,  agreements and other  arrangements  of DSI or the DSI
                Subsidiaries  with or relating to their  employees  that contain
                change in  control  provisions.  DSI has made  available  to the
                Shareholders   copies  (or  descriptions  in  detail  reasonably
                satisfactory to the Shareholders) of all such agreements, plans,
                programs and other arrangements.

        6.12.2  Neither  DSI  nor  the  DSI  Subsidiaries  is  a  party  to  any
                collective  labor agreement or any other contract or arrangement
                with  any  trade  union or other  body  representing  any of its
                employees  other  than  as  set  forth  in  the  DSI  Disclosure
                Schedule,   and  neither  DSI  nor  the  DSI   Subsidiaries  has
                recognized  or  received  a  demand  for  recognition  from  any
                collective bargaining  representative with respect to any of its
                or  their  employees.  Other  than  as  set  forth  in  the  DSI
                Disclosure  Schedule,  neither DSI nor the DSI  Subsidiaries  is
                subject to, nor do  employees  of any such  corporation  benefit
                from, any extension  orders  (tzavei  harchava) or any contract,
                arrangement,  understanding or custom with respect to employment
                (including, without limitation, termination thereof). Other than
                as expressly set forth in the DSI Disclosure  Schedule,  neither
                DSI nor the DSI  Subsidiaries  has any  custom  with  respect to
                termination of employment.

        6.12.3  Except  for  the  employment   agreements   listed  in  the  DSI
                Disclosure  Schedule,  there are no  contracts  or  arrangements
                between DSI or the DSI  Subsidiaries  and any of its  directors,
                officers,  executives or employees which cannot be terminated by
                such  corporation  by three months notice or less without giving
                rise  to  a  claim  for  damages  or  compensation  (except  for
                statutory severance pay).

        6.12.4  Other than as set forth in the DSI Disclosure Schedule, there is
                no   outstanding   claim  or   complaint   (including,   without
                limitation, any claim resulting from a bonus arrangement), other
                than claims and complaints  demanding solely pecuniary damage in
                an aggregate amount less than $15,000, against DSI or


                                       31
<PAGE>

                the DSI  Subsidiaries  by any  person  who is now or has been an
                officer or employee of such corporation.

        6.12.5  There is no labor strike,  slowdown or stoppage  pending (or, to
                the best knowledge of DSSI and DSI, any labor strike or stoppage
                threatened or contemplated)  against or affecting DSI or the DSI
                Subsidiaries, and there have been no disputes between DSI or the
                DSI  Subsidiaries  and any  employees  and there are no  present
                circumstances  which are  reasonably  likely to give rise to any
                such dispute.

        6.12.6  The severance pay (Pitzuie  Piturin) due to the employees of DSI
                and the DSI  Subsidiaries  is fully  funded or  provided  for in
                accordance  with U.S.  GAAP,  all  liabilities of DSI or the DSI
                Subsidiaries in connection with their respective  employees were
                adequately  accrued in the Financial  Statements and, other than
                as set forth in the DSI Disclosure Schedule, DSI is not aware of
                any  circumstance  whereby any employee  might  demand  (whether
                legally  entitled  to or not)  any  claim  for  compensation  on
                termination of employment beyond the statutory  severance pay to
                which such employee is entitled.  All  obligations of DSI or the
                DSI Subsidiaries with respect to statutorily  required severance
                payments  have  been  fully  satisfied  or have  been  funded by
                contributions  to  appropriate   insurance  funds  or  otherwise
                provided for in the DSI Financial Statements or disclosed in the
                notes thereto.

        6.12.7  All  amounts  which DSI or the DSI  Subsidiaries  is  legally or
                contractually   required   to  either  (i)  deduct   from  their
                employees'  salaries and/or transfer to such employees'  pension
                or provident, life insurance,  incapacity insurance,  continuing
                education   fund  or  otherwise  or  (ii)  withhold  from  their
                employees'  salaries  and  pay to any  government,  governmental
                agency or  instrumentality  thereof as  required  by the Israeli
                Income Tax Ordinance  [New  Version] or otherwise  have, in each
                case, been duly deducted, withheld and paid, and neither DSI nor
                the DSI Subsidiaries has any outstanding  obligation to make any
                such transfer or provision.

        6.12.8  Each of DSI and the DSI  Subsidiaries  is in  compliance  in all
                material  respects with all applicable  legal  requirements  and
                contracts relating to employment,  employment practices,  wages,
                bonuses  and  terms  and  conditions  of  employment,  including
                employee compensation matters.

        6.12.9  Each of DSI and the DSI  Subsidiaries  has good labor relations,
                and DSI has no  knowledge of any facts  indicating  that (i) the
                consummation  of the  transactions  contemplated  hereunder will
                have a material  adverse effect on the labor relations of DSI or
                the DSI Subsidiaries, or (ii) any of the employees of DSI or the
                DSI Subsidiaries intends to terminate his or her employment with
                such company.

        6.12.10 Except as disclosed in the DSI Disclosure Schedule,  neither the
                execution,  delivery or  performance  of this  Agreement nor the
                consummation  of the  transactions  contemplated  hereunder will
                result  in any  bonus,  golden  parachute,  severance  or  other
                payment  or  obligation  to any  current or former  employee  or
                director of any of DSI or the DSI  Subsidiaries,  or  materially
                increase  the  benefits  payable or  provided  to any current or
                former employee or


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<PAGE>

                director  of DSI or  the  DSI  Subsidiaries,  or  result  in any
                acceleration of the time of payment, provision or vesting of any
                such benefits. Without limiting the generality of the foregoing,
                the consummation of the transactions contemplated hereunder will
                not  result  in the  acceleration  of  vesting  of any  unvested
                options  outstanding  under any option  plan or other  incentive
                plan of any of DSI or the DSI Subsidiaries.

6.13.   Agreements, Scheduled Contracts and Commitments.

        6.13.1  Scheduled  Contracts.  Except as set forth in the DSI Disclosure
                Schedule,  neither DSI nor the DSI Subsidiaries  has, is a party
                to or is bound by:

                (i)     any collective bargaining agreements;

                (ii)    any   agreements  or   arrangements   that  contain  any
                        severance   pay  or   post-employment   liabilities   or
                        obligations in excess of those required by law;

                (iii)   any bonus,  deferred  compensation,  sales  compensation
                        plan,  pension,  profit sharing or retirement  plans, or
                        any other  employee  benefit  plans or  arrangements  or
                        agreements to change any such plans  whether  written or
                        oral;

                (iv)    any employment or consulting  agreement with an employee
                        or  individual  consultant,  or any  consulting or sales
                        agreement  under  which  a firm  or  other  organization
                        provides  services to DSI or the DSI Subsidiaries in any
                        case involving  aggregate  payments in excess of $15,000
                        or the equivalent thereof in one year;

                (v)     any agreement or plan,  including any stock option plan,
                        stock  appreciation  rights plan or stock purchase plan,
                        any of the benefits of which will be  increased,  or the
                        vesting of benefits of which will be accelerated, by the
                        occurrence  of any of the  Transactions  or the value of
                        any of the benefits of which will be  calculated  on the
                        basis of any of the Transactions;

                (vi)    any fidelity or surety bond or completion bond;

                (vii)   any   lease  of   personal   property   having  a  value
                        individually  in excess  of  $15,000  or the  equivalent
                        thereof;

                (viii)  any agreement of  indemnification or guaranty other than
                        expressly set forth in the DSI Disclosure Schedule;

                (ix)    any   agreement   pursuant  to  which  DSI  or  the  DSI
                        Subsidiaries  has  granted,  or may grant in the future,
                        any party a source-code license or option or other right
                        to use or acquire source-code;

                (x)     any  agreement  relating  to  capital  expenditures  and
                        involving  future  payments in excess  of$50,000  or the
                        equivalent thereof;


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<PAGE>

                (xi)    any agreement relating to the disposition or acquisition
                        of assets,  property  or any  interest  in any  business
                        enterprise outside the ordinary course of DSI or the DSI
                        Subsidiaries' business;

                (xii)   any  mortgage,  indenture,  loan  or  credit  agreement,
                        security  agreement  or other  agreement  or  instrument
                        relating  to the  borrowing  of  money or  extension  of
                        credit,  including  any  guaranty  referred to in clause
                        (viii) of this Section 6.13.1;

                (xiii)  any  purchase  order or contract for the purchase of raw
                        materials   or   services   involving   $50,000  or  the
                        equivalent thereof or more;

                (xiv)   any construction contract;

                (xv)    any   distribution,   joint   marketing  or  development
                        agreement;

                (xvi)   any  other  agreement  that  involves   $50,000  or  the
                        equivalent  thereof or more or is not cancelable without
                        penalty upon notice of thirty (30) days or less;

                (xvii)  any  contract  under  which DSI or the DSI  Subsidiaries
                        provides  services  to third  parties  for which it will
                        receive  payments in excess of $15,000 or the equivalent
                        thereof in a period of 12 consecutive months;

                (xviii) any  contract   that   contains  a  liquidated   damages
                        provision  for  failure to meet  performance  or quality
                        milestones; or

                (xix)   any other  material  agreement  or  commitment,  whether
                        written or oral.

        6.13.2  Loss  Contracts.  The DSI  Disclosure  Schedule  identifies  all
                contracts  (whether  fixed  price or time and  materials  with a
                price cap or other contract  having similar  effect) under which
                DSI or the DSI Subsidiaries  provides  products or services to a
                third party and as to which the cost of performance has exceeded
                or is likely to exceed the  contract  price and also sets forth,
                with  respect  to each such  contract,  the amount by which such
                cost of performance  exceeds such contract price.  Except as set
                forth in the DSI Disclosure Schedule,  all contracts under which
                DSI or the DSI Subsidiaries  provides  services to a third party
                are capable of being  performed  at a cost equal to or less than
                the contract price.

        6.13.3  No  Contract   Breaches.   Except  for  such  alleged  breaches,
                violations  and  defaults,  and events that would  constitute  a
                breach,  violation or default with the lapse of time,  giving of
                notice,  or  both,  as  are  all  noted  in the  DSI  Disclosure
                Schedule,  neither  DSI  nor  the  DSI  Subsidiaries  has in any
                material  respect  breached,  violated or  defaulted  under,  or
                received  notice that it has  materially  breached,  violated or
                defaulted   under,  any  of  the  terms  or  conditions  of  any
                agreement,  contract or  commitment  required to be set forth in
                the  DSI  Disclosure   Schedule   pursuant  to  Sections  6.13.1
                or 6.13.2   (any  such   agreement,   contract  or   commitment,
                regardless  of  whether  it is set  forth  on such  schedule,  a
                "Scheduled Contract").  Each Scheduled Contract is in full force
                and  effect  and,  except  as  otherwise  disclosed  in the  DSI
                Disclosure


                                       34
<PAGE>

                Schedule,  is not subject to any default thereunder of which DSI
                have  knowledge  by any  party  obligated  to  DSI  or  the  DSI
                Subsidiaries pursuant thereto.

6.14.   Interested Party Transactions. Except as set forth in the DSI Disclosure
        Schedule, no member, manager,  officer,  director or Affiliate of DSI or
        the DSI Subsidiaries,  has or has had during the past 3 years,  directly
        or  indirectly,  (i) an  economic  interest  of 5% or more in any Person
        which has furnished or sold, or furnishes or sells, services or products
        that DSI or the DSI  Subsidiaries  furnishes  or sells,  or  proposes to
        furnish or sell,  (ii) an economic  interest of 5% or more in any Person
        that   purchases  from  or  sells  or  furnishes  to,  DSI  or  the  DSI
        Subsidiaries,  any goods or services, (iii) a beneficial interest in any
        Scheduled Contract or (iv) any contractual or other arrangement with DSI
        or the DSI Subsidiaries.

6.15.   Intellectual Property.

        6.15.1  The  DSI  Disclosure   Schedule  sets  forth,  the  Intellectual
                Property  owned,  in whole or in part,  including  jointly  with
                others, by DSI or the DSI Subsidiaries,  a complete and accurate
                list of all (a) patents and patent  applications;  (b) Trademark
                registrations   and  applications   and  material   unregistered
                Trademarks;  and (c) copyright  registrations  and applications,
                indicating for each, the applicable  jurisdiction,  registration
                number (or application number), and date issued (or date filed).

        6.15.2  Trade Secrets.

                (i)     DSI has taken the steps  described in the DSI Disclosure
                        Schedule  to  protect   DSI's  rights  in   confidential
                        information and Trade Secrets of DSI.

                (ii)    Without limiting the generality of Section 6.15.2(i) and
                        except as would not be materially  adverse to DSI or its
                        business,  DSI  enforces  a  policy  of  requiring  each
                        relevant employee,  consultant and contractor to execute
                        proprietary information,  confidentiality and assignment
                        agreements substantially in DSI's standard forms, a copy
                        of which has been  furnished to the  Shareholders,  and,
                        except under confidentiality obligations, there has been
                        no disclosure by DSI or the DSI Subsidiaries of material
                        confidential information or Trade Secrets.

        6.15.3  License  Agreements.  The DSI  Disclosure  Schedule sets forth a
                complete and accurate list of all Inbound License  Agreements of
                DSI or the DSI  Subsidiaries,  indicating for each the title and
                the  parties  thereto  and the amount of any  future  royalty or
                license fee payable thereunder. The DSI Disclosure Schedule sets
                forth a  complete  and  accurate  list of all  Outbound  License
                Agreements of DSI or the DSI  Subsidiaries,  indicating for each
                the  title  and  the  parties  thereto.  There  is  no  material
                outstanding  or, to the  knowledge  of DSSI and DSI,  threatened
                dispute or  disagreement  with  respect to any  Inbound  License
                Agreement or any Outbound License  Agreement.


                                       35
<PAGE>

        6.15.4  Ownership;  Sufficiency of IP Assets. Except as set forth in the
                DSI Disclosure  Schedule,  DSI or the DSI  Subsidiaries  owns or
                possesses  adequate  licenses or other  rights to use,  free and
                clear  of  Liens,  orders  and  arbitration  awards,  all of its
                Intellectual  Property  used in and  necessary to the conduct of
                its business.  The Intellectual  Property  identified in the DSI
                Disclosure   Schedule,   together   with   DSI's   and  the  DSI
                Subsidiaries'  unregistered  copyrights  and  DSI's  and the DSI
                Subsidiaries'  rights under the  licenses  granted to DSI or the
                DSI   Subsidiaries   under  the  Inbound   License   Agreements,
                constitute all the material Intellectual Property rights used in
                the operation of DSI's and the DSI  Subsidiaries'  businesses as
                they  are  currently  conducted  and are  all  the  Intellectual
                Property rights  necessary to operate such businesses  after the
                Closing Date in substantially the same manner as such businesses
                have been operated by DSI prior thereto.

        6.15.5  No  Infringement  by DSI. To the best knowledge of DSSI and DSI,
                the products used,  manufactured,  marketed, sold or licensed by
                DSI and the DSI Subsidiaries, and all Intellectual Property used
                in the conduct of DSI's and the DSI Subsidiaries'  businesses as
                currently conducted, do not infringe upon, violate or constitute
                the  unauthorized  use of any rights owned or  controlled by any
                third party,  including any  Intellectual  Property of any third
                party.

        6.15.6  No Pending or Threatened  Infringement  Claims. No litigation is
                now or,  within  the three  (3) years  prior to the date of this
                Agreement,  was pending  and, to DSI's  knowledge,  no notice or
                other claim in writing  has been  received by DSI within the one
                (1)  year  period  prior  to the  date  of this  Agreement,  (i)
                alleging  that DSI or the DSI  Subsidiaries  has  engaged in any
                activity  or  conduct  that   infringes   upon,   violates,   or
                constitutes the unauthorized  use of the  Intellectual  Property
                rights of any third  party or (ii)  challenging  the  ownership,
                use,  validity or  enforceability  of any Intellectual  Property
                owned or  exclusively  licensed by DSI.  Except as  specifically
                disclosed  in the  DSI  Disclosure  Schedule  pursuant  to  this
                Section 6.15.6_,  no Intellectual  Property owned or licensed by
                DSI or the DSI Subsidiaries is subject to any outstanding order,
                judgment,  decree,  stipulation or agreement (other than Inbound
                License  Agreements)  restricting  the use thereof by DSI or the
                DSI Subsidiaries  or, in the case of any  Intellectual  Property
                licensed to others,  restricting the sale, transfer,  assignment
                or  licensing  thereof  by DSI or the  DSI  Subsidiaries  to any
                person.

        6.15.7  No  Infringement  by Third Parties.  To the knowledge of DSI, no
                person is misappropriating,  infringing,  diluting, or violating
                any Intellectual  Property owned or exclusively  licensed by DSI
                or the DSI  Subsidiaries,  and no such claims have been  brought
                against any person by DSI or the DSI Subsidiaries.

        6.15.8  Assignment;  Change of  Control.  The  execution,  delivery  and
                performance by DSI of this  Agreement,  and the  consummation by
                DSI of the transactions  contemplated hereby, will not result in
                the loss or  impairment  of,  or give  rise to any  right of any
                third party to terminate,  any of DSI's or the DSI Subsidiaries'
                rights to own any of its  Intellectual  Property  or its  rights
                under the  License  Agreements,  nor  require the consent of any
                Governmental  Entity  or  third  party  in  respect  of any such
                Intellectual Property.


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<PAGE>

        6.15.9  Software.  The Owned Software of DSI or the DSI Subsidiaries was
                either (i) developed by employees of DSI or the DSI Subsidiaries
                within  the  scope  of  their  employment;   (ii)  developed  by
                independent contractors who have assigned their rights to DSI or
                the DSI Subsidiaries  pursuant to written  agreements;  or (iii)
                otherwise  acquired by DSI or the DSI Subsidiaries  from a third
                party. The Owned Software does not contain any programming code,
                documentation  or other  materials or  development  environments
                that embody  Intellectual  Property  rights of any person  other
                than DSI or the DSI  Subsidiaries,  except for such materials or
                development environments obtained by DSI or the DSI Subsidiaries
                from  other  persons  who make  such  materials  or  development
                environments generally available to all interested purchasers or
                end-users on standard  commercial terms or as negotiated between
                DSI and any such other person.

        6.15.10 Performance of Existing Software  Products.  All of the Software
                Products  listed and  described in the DSI  Disclosure  Schedule
                perform in all material  respects,  free of significant  bugs or
                programming  errors, the functions  described in any protocol or
                standard   applicable   to   the   product,   and   any   agreed
                specifications  or end user  documentation or other  information
                provided to customers of DSI on which such customers relied when
                licensing or otherwise acquiring such products.

        6.15.11 Employee Confidentiality Agreements.  Except as set forth in the
                DSI Disclosure Schedule, all employees and consultants of DSI or
                the  DSI   Subsidiaries   have  entered  into   confidentiality,
                invention assignment and proprietary information agreements with
                DSI  or  the  DSI  Subsidiaries  in  the  form  provided  to the
                Shareholders. To the best knowledge of DSSI and DSI, no employee
                or consultant of DSI or the DSI  Subsidiaries is obligated under
                any agreement (including  licenses,  covenants or commitments of
                any nature) or subject to any  judgment,  decree or order of any
                court or  administrative  agency,  or any other restriction that
                would interfere with the use of his or her best efforts to carry
                out his or her  duties  for DSI or the DSI  Subsidiaries  (other
                than time commitments of independent  contractors to their other
                clients)  or  that  would   conflict   with  DSI's  or  the  DSI
                Subsidiaries'  business.  The  carrying  on of DSI's and the DSI
                Subsidiaries'  business by such employees and contractors of DSI
                or the DSI  Subsidiaries  and the  conduct  of DSI's and the DSI
                Subsidiaries' business as presently proposed, will not, conflict
                with  or  result  in  a  breach  of  the  terms,  conditions  or
                provisions  of, or  constitute a default  under,  any  contract,
                covenant or instrument under which DSI or the DSI  Subsidiaries,
                or to the  knowledge of DSSI and DSI,  any of such  employees or
                consultants,  is now  obligated.  Except as set forth in the DSI
                Disclosure  Schedule,   it  is  not  necessary  to  utilize  any
                inventions or any other  Intellectual  Property of any employees
                of or consultants to DSI or the DSI Subsidiaries  acquired prior
                to their  employment by DSI or the DSI  Subsidiaries in order to
                carry  on the  business  of DSI  and  the  DSI  Subsidiaries  as
                presently  conducted.  At no time  during the  conception  of or
                reduction to practice of any Intellectual  Property owned by DSI
                or the DSI  Subsidiaries  was any  developer,  inventor or other
                contributor to such  Intellectual  Property  operating under any
                grants  from  any   Governmental   Entity  or  private   source,
                performing  research  sponsored  by any  Governmental  Entity or
                private source


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<PAGE>

                or subject to any employment  agreement or invention  assignment
                or  nondisclosure  agreement or other  obligation with any third
                party that could adversely affect DSI's or the DSI Subsidiaries'
                rights in such Intellectual Property.

        6.15.12 Export  Restrictions.  Neither DSI nor the DSI  Subsidiaries has
                exported or transmitted Software or other material in connection
                with DSI's or the DSI  Subsidiaries'  business to any country to
                which  such  export  or   transmission   is  restricted  by  any
                applicable law,  without first having obtained all necessary and
                appropriate government licenses or permits.

6.16.   Insurance.  Each of DSI and the  DSI  Subsidiaries  maintains  Insurance
        Policies  against  all risks of a character  and in such  amounts as are
        usually insured against by similarly  situated  companies in the same or
        similar  businesses.  Each Insurance  Policy is in full force and effect
        and is valid, outstanding and enforceable,  and all premiums due thereon
        have been paid in full. None of the Insurance Policies will terminate or
        lapse (or be affected in any other materially  adverse manner) by reason
        of the transactions  contemplated by this Agreement. Each of DSI and the
        DSI  Subsidiaries  has complied with the  provisions  of each  Insurance
        Policy  under  which it is the  insured  party.  No  insurer  under  any
        Insurance  Policy has canceled or generally  disclaimed  liability under
        any such policy or, to DSI's knowledge, indicated any intent to do so or
        not to renew any such policy.  All material  claims under the  Insurance
        Policies have been filed in a timely fashion.

6.17.   Certain  Business  Practices.  None of DSI, the DSI  Subsidiaries or any
        directors,  officers, agents or employees of DSI or the DSI Subsidiaries
        has (i) used any funds for unlawful contributions,  gifts, entertainment
        or other unlawful expenses related to political activity,  (ii) made any
        unlawful  payment  to  foreign  or  domestic  government   officials  or
        employees  or to foreign or domestic  political  parties or campaigns or
        violated  any  provision  of  applicable  law,  or (iii)  made any other
        unlawful payment.

6.18.   Restrictions  on  Business  Activities.  Except  as set forth in the DSI
        Disclosure Schedule,  there is no agreement  (non-compete or otherwise),
        judgment,   injunction,  order  or  decree  to  which  DSI  or  the  DSI
        Subsidiaries  is a  party  or  otherwise  binding  upon  DSI or the  DSI
        Subsidiaries  that has or is  reasonably  likely  to have the  effect of
        prohibiting  or  impairing  any  business  practice  of DSI  or the  DSI
        Subsidiaries,  any  acquisition of property  (tangible or intangible) by
        DSI or the DSI Subsidiaries or the conduct of business by DSI or the DSI
        Subsidiaries. Without limiting the foregoing, except as set forth in the
        DSI  Disclosure  Schedule,  neither  DSI nor the  DSI  Subsidiaries  has
        entered into any agreement under which DSI or any such DSI Subsidiary is
        restricted from selling,  licensing or otherwise distributing any of its
        products  or  providing  services  to any  class  of  customers,  in any
        geographic  area,  during  any  period of time or in any  segment of the
        market.

6.19.   Product and Service  Warranties.  Complete  and  accurate  copies of the
        written  warranties  and  guaranties  by  DSI or  the  DSI  Subsidiaries
        currently in effect with respect to any of its products or services have
        been  delivered  to the  Shareholders.  There have not been any material
        deviations from such warranties and guaranties, and neither DSI, the DSI
        Subsidiaries   nor  any  of  their   respective   salesmen,   employees,
        distributors and agents is authorized to undertake warranty and guaranty
        obligations  to any customer or to other third parties in excess of such
        warranties or guaranties.


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<PAGE>

        Except as set forth in the DSI Disclosure Schedule,  neither DSI nor the
        DSI  Subsidiaries has made any oral warranty or guaranty with respect to
        any of its products or services.

6.20.   Brokers.  No broker,  finder or  investment  banker is  entitled  to any
        brokerage  finder's or other fee or  commission  from DSI in  connection
        with  the  transactions   contemplated  by  this  Agreement  based  upon
        arrangements made by or on behalf of DSI and DSSI.

6.21.   Minute  Books.  The minute  books of DSI and the DSI  Subsidiaries  made
        available to the  Shareholders  are the only minute books of DSI and the
        DSI  Subsidiaries  and  contains a  reasonably  accurate  summary of all
        actions  taken at meetings of the Board of  Directors  of DSI or the DSI
        Subsidiaries  (or committees  thereof) or at the General Meetings of the
        shareholders  of DSI or  actions by  written  consent  since the time of
        organization of DSI and the DSI Subsidiaries, respectively.

6.22.   Taxes. Each of DSI and the DSI Subsidiaries has accurately  prepared and
        timely  filed all Tax  Returns  and has paid or made  provision  for the
        payment of all amounts due  pursuant  to such  returns.  None of the Tax
        Returns have been audited by any taxing  authority,  and neither DSI nor
        the DSI  Subsidiaries has been advised that any of such Tax Returns will
        be so  audited,  and there are no  waivers  in effect of the  applicable
        statute of  limitations  for any period.  No  deficiency  assessment  or
        proposed  adjustment  of  income  or  payroll  taxes  of DSI and the DSI
        Subsidiaries is pending and DSI has no knowledge,  after due inquiry, of
        any  proposed  liability  for any tax to be imposed on DSI other than in
        the ordinary course of business.

6.23.   Full Disclosure. Neither this Agreement, the DSI Disclosure Schedule nor
        any  certificates  made  or  delivered  by  DSI in  connection  herewith
        contains  any untrue  statement  of a material  fact or omits to state a
        material  fact  necessary to make the  statements  herein or therein not
        misleading, in view of the circumstances in which they were made. To the
        best knowledge of DSSI and DSI, there is no material fact or information
        relating to the business, prospects, condition (financial or otherwise),
        affairs, operations, or assets of DSI that has not been disclosed to the
        Shareholders in writing by DSI.

                                   ARTICLE VII

                     Representations and Warranties of DSSI

        DSSI hereby represents and warrants to the Shareholders as follows:

7.1.    Organization.

        7.1.1   DSSI is duly  organized,  validly  existing and in good standing
                under  the laws of  Delaware  and has all  requisite  power  and
                authority to own,  lease and operate its properties and to carry
                on its businesses as now being conducted.

        7.1.2   DSSI is duly  qualified or licensed  and in good  standing to do
                business  in each  jurisdiction  in which  the  property  owned,
                leased or operated by it or the nature


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<PAGE>

                of the  business  conducted  by it makes such  qualification  or
                licensing  necessary,  except  in such  jurisdictions  where the
                failure to be so duly qualified or licensed and in good standing
                would not have a Material Adverse Effect on DSSI.

7.2.    Capitalization of DSSI and its Subsidiaries.

        7.2.1   The  authorized  capital  stock of DSSI  consists  of 20 million
                (20,000,000)  shares of Common Stock, of which 8,111,867  shares
                of Common Stock were issued and  outstanding as of September 30,
                2001.  All of the  outstanding  shares of DSSI Common Stock have
                been validly issued and are fully paid,  nonassessable  and free
                of  preemptive  rights.  As of  September  30,  2001,  except in
                connection with this Agreement, DSSI has not reserved any shares
                of Common  Stock for  future  issuance  other than the number of
                shares of Common  Stock equal to 5% of the  current  outstanding
                shares of Common  Stock  which  have been  reserved  for  future
                grants of  employee  stock  options  ("DSSI  Reserved  Shares").
                Between  September  30, 2001 and the date  hereof,  no shares of
                DSSI's  capital stock have been issued,  other than (i) pursuant
                to the  exercise  of stock  options,  warrants  and  convertible
                securities  that  entitled the holders  thereof to purchase DSSI
                Reserved  Shares;  (ii) pursuant to a restricted  stock purchase
                agreement  with an employee of a subsidiary  of DSSI;  and (iii)
                grants of stock options to employees, officers and directors, in
                each case made in the ordinary course of business and consistent
                with past  practice  that would  entitle the holders  thereof to
                purchase  DSSI  Reserved   Shares.   There  are  no  shareholder
                agreements,  voting trusts or other agreements or understandings
                to which DSSI is a party or by which it is bound relating to the
                voting of any shares of capital stock of DSSI.  The  Certificate
                of  Incorporation  and  Bylaws  of DSSI  filed  with  the SEC as
                exhibits to DSSI's Registration  Statement on Form S-1 (SEC File
                No.  33-70842  and SEC File No.  33-44027)  and  DSSI's  Current
                Report on Form 8-K dated  January 10, 1995 have not been amended
                as of the date hereof.

        7.2.2   DSSI  Common  Stock   constitutes   the  only  class  of  equity
                securities of DSSI or its subsidiaries  that is registered or is
                required to be registered under the U.S. Exchange Act.

        7.2.3   The DSSI Shares to be transferred to the Shareholders under this
                Agreement  shall,  as of the Closing  Date,  be validly  issued,
                fully paid,  nonassessable  and free of preemptive rights of any
                stockholders of DSSI.

7.3.    Authority Relative to this Agreement.  DSSI has all necessary  corporate
        power and  authority to execute and deliver this  Agreement  and each of
        the other  Transaction  Documents to which it is a party, to perform its
        obligations  under  this  Agreement  and each of the  other  Transaction
        Documents  to which it is a party  and to  consummate  the  transactions
        contemplated  hereby and  thereby.  The  execution  and delivery of this
        Agreement and each of the other Transaction Documents to which DSSI is a
        party, and the consummation of the transactions  contemplated hereby and
        thereby, have been duly and validly authorized by the board of directors
        of DSSI, DSSI has


                                       40
<PAGE>

        delivered  to Endan duly adopted  resolutions  of its Board of Directors
        authorizing the same, and no other corporate  proceedings on the part of
        DSSI are  necessary  to  authorize  this  Agreement  or any of the other
        Transaction  Documents  to  which  it is a party  or to  consummate  the
        transactions contemplated hereby and thereby. This Agreement and each of
        the other  Transaction  Documents to which DSSI is a party have been (in
        the  case of this  Agreement)  or  shall  be (in the  case of the  other
        Transaction  Documents) duly and validly  executed and delivered by DSSI
        and  constitute  or will  constitute,  assuming  the due  authorization,
        execution and delivery hereof by the other parties  thereto,  the valid,
        legal  and  binding  agreements  of  DSSI  enforceable  against  DSSI in
        accordance  with  their  respective  terms,  subject  to any  applicable
        bankruptcy, insolvency,  reorganization,  moratorium or similar laws now
        or hereafter in effect  relating to  creditors'  rights  generally or to
        general principles of equity.

7.4.    SEC Reports; Financial Statements.

        7.4.1   DSSI filed with the SEC annual reports on Form 10-K for the year
                ended  December 31, 2000 and its Quarterly  Reports on Form 10-Q
                for the quarter ended September 30, 2001 under the U.S. Exchange
                Act (the  "DSSI SEC  Reports"),  which  complied  at the time of
                filing in all material respects with all applicable requirements
                of the  U.S.  Exchange  Act.  None of  such  DSSI  SEC  Reports,
                including  any  financial  statements  or schedules  included or
                incorporated  by  reference  therein,  contained  when filed any
                untrue  statement  of a  material  fact or  omitted  to  state a
                material fact required to be stated or incorporated by reference
                therein or necessary in order to make the statements  therein in
                light  of the  circumstances  under  which  they  were  made not
                misleading, except to the extent superseded by a periodic report
                under the U.S. Exchange Act filed  subsequently and prior to the
                date  hereof.   The  audited  and  any  unaudited   consolidated
                financial statements of DSSI included in DSSI SEC Reports fairly
                present in  conformity in all material  respects with  generally
                accepted  accounting  principles  applied on a consistent  basis
                (except as may be indicated in the notes  thereto and except for
                the absence of footnotes in the unaudited financial statements),
                the consolidated financial position of DSSI and its consolidated
                subsidiaries  as of the dates  thereof  and  their  consolidated
                results of operations and changes in financial  position for the
                periods  then  ended  (subject,  in  the  case  of  any  interim
                financial statements, to normal year-end adjustments).

        7.4.2   No  change  in  the  business,  assets,  liabilities,  condition
                (financial  or  other),  or results  of  operations  of DSSI has
                occurred  between the date of filing of the most recent DSSI SEC
                Report  filed  prior to the date  hereof with the SEC that would
                cause such DSSI SEC Report,  including the financial  statements
                and  schedules  included  therein,  to  contain,  as of the date
                hereof,  any untrue  statement of a material  fact or to omit to
                state a  material  fact that would be  required  to be stated or
                incorporated by reference  therein or that would be necessary in
                order to make the statements  contained therein,  as of the date
                hereof, not misleading.


                                       41
<PAGE>

7.5.    Consents  and  Approvals;  No  Violations.  Except as  required  for the
        registration of the DSSI Shares under the Registration Rights Agreement,
        no filing  with or notice to, and no permit,  authorization,  consent or
        approval of any  Governmental  Entity is necessary for the execution and
        delivery  by DSSI  of this  Agreement  or any of the  other  Transaction
        Documents  to  which it is a party  or the  consummation  by DSSI of the
        transactions  contemplated  hereby and thereby.  Neither the  execution,
        delivery  and  performance  of  this  Agreement  or  any  of  the  other
        Transaction   Documents  to  which  it  is  a  party  by  DSSI  nor  the
        consummation by DSSI of the transactions contemplated hereby and thereby
        will (i) conflict  with or result in any breach of any  provision of the
        respective   Constitutional   Documents   of  DSSI  or  any  of   DSSI's
        subsidiaries,  (ii)  result in a  violation  or breach of or  constitute
        (with or without due notice or lapse of time or both) a default (or give
        rise  to  any  right  of   termination,   amendment,   cancellation   or
        acceleration  or Lien) under any of the terms,  conditions or provisions
        of any  note,  bond,  mortgage,  indenture,  lease,  license,  contract,
        agreement  or other  instrument  or  obligation  to which DSSI or any of
        DSSI's  subsidiaries  is a party or by which any of them or any of their
        respective properties or assets may be bound or (iii) violate any order,
        writ, injunction, decree, law, statute, rule or regulation applicable to
        DSSI or any of DSSI's subsidiaries or any of their respective properties
        or assets.

7.6.    Brokers.  No broker,  finder or  investment  banker is  entitled  to any
        brokerage  finder's or other fee or commission  in  connection  with the
        transactions contemplated by this Agreement based upon arrangements made
        by or on behalf of DSSI.

7.7.    Fluctuations of Share Price. DSSI has no actual knowledge of any pending
        or contemplated sale of a significant  amount of Common Stock that would
        reasonably be expected to cause a downward  fluctuation  in the price of
        the Common Stock; provided,  however, that the Shareholders  acknowledge
        that  certain  directors  and other  insiders  of DSSI hold  significant
        portions of the Common Stock and that the sale thereof  could cause such
        fluctuation.

7.8.    Ownership of Ordinary  Shares.  Other than one  Ordinary  Share owned by
        George  Morgenstern,  DSSI owns all the issued and outstanding  Ordinary
        Shares.  The  Ordinary  Shares  owned by DSSI are free and  clear of any
        Liens or encumbrances.

                                  ARTICLE VIII

                                    Covenants

8.1.    Conduct of Business  of Endan and DSI.  Except as  contemplated  by this
        Agreement,  during the period from the date hereof to the Closing  Date,
        Endan  and the  Subsidiaries,  and DSI and the DSI  Subsidiaries,  shall
        conduct  operations only in the ordinary  course of business  consistent
        with past practice,  and, to the extent  consistent  therewith,  with no
        less diligence and effort than would be applied in the absence of


                                       42
<PAGE>

        this Agreement,  use commercially  reasonable efforts to preserve intact
        current business  organizations,  keep available the service of officers
        and  employees and preserve  relationships  with  customers,  suppliers,
        distributors,  lessors,  creditors,  employees,  contractors  and others
        having  business  dealings  with  them,  with the  intention  that their
        goodwill and ongoing businesses shall be unimpaired at the Closing Date.

8.2.    No Solicitation or Negotiation.  Between the date hereof and the Closing
        Date,  the  Shareholders  shall not (nor shall the  Shareholders  permit
        Endan  or  the  Subsidiaries  or any of  Endan's  or the  Subsidiaries's
        officers, directors, employees, agents,  representatives,  or affiliates
        or cause any  person on behalf  of the  Shareholders  to) other  than in
        accordance  with this  Agreement,  initiate,  entertain or encourage any
        proposals  or offers  from,  or  conduct  discussions  with or engage in
        negotiations with, or provide  information to any person relating to, or
        execute,  consummate or close any possible  acquisition  of Endan or the
        Subsidiaries,  whether by way of merger, purchase of shares, purchase of
        assets or otherwise.  Each  Shareholder  shall, and it shall cause Endan
        and the  Subsidiaries  to,  promptly notify DSI in the event it receives
        any  proposal  or  inquiry  from a third  party  concerning  a  proposed
        acquisition  of Endan  or the  Subsidiaries,  including  the  terms  and
        conditions  thereof  and  the  identity  of the  party  submitting  such
        proposal,  and shall  advise DSI from time to time of the status and any
        material  developments  concerning the same. Between the date hereof and
        the Closing  Date,  DSSI shall not (nor shall DSSI permit DSI or the DSI
        Subsidiaries  or any of DSI's or DSSI' officers,  directors,  employees,
        agents, representatives,  or affiliates or cause any person on behalf of
        DSSI  to)  other  than in  accordance  with  this  Agreement,  initiate,
        entertain  or  encourage  any  proposals  or  offers  from,  or  conduct
        discussions with or engage in negotiations with, or provide  information
        to any person relating to, or execute,  consummate or close any possible
        acquisition  of DSI or the DSI  Subsidiaries,  whether by way of merger,
        purchase of shares, purchase of assets or otherwise.  DSSI shall, and it
        shall cause DSI and the DSI  Subsidiaries  to,  promptly notify Endan in
        the  event it  receives  any  proposal  or  inquiry  from a third  party
        concerning  a  proposed  acquisition  of DSI or  the  DSI  Subsidiaries,
        including the terms and conditions thereof and the identity of the party
        submitting  such  proposal,  and shall advise Endan from time to time of
        the status and any material developments concerning the same.

8.3.    Certain Filings; Reasonable Efforts. Subject to the terms and conditions
        herein provided, each of the parties hereto agrees to use all reasonable
        efforts to take or cause to be taken all action and to do or cause to be
        done  all  things  reasonably  necessary,   proper  or  advisable  under
        applicable  laws and  regulations  to consummate  and make effective the
        Transactions  including (i) obtaining  consents of all third parties and
        Governmental  Entities  necessary,  proper or  advisable  or  reasonably
        required for the  consummation of the  Transactions;  (ii) and executing
        any additional instruments necessary to consummate the Transactions.

8.4.    Public  Announcements.  The  parties  hereto  acknowledge  that a  press
        statement  describing this  transaction has been released to the public.
        No Party will,  prior to the Closing Date or to the  termination of this
        Agreement in  accordance  with  Section 11.1 below,  make or release any
        further statements  relating to this transaction  without the consent of
        the other  Parties  hereto,  which  consent  shall  not be  unreasonably
        withheld or delayed.


                                       43
<PAGE>

8.5.    Notification of Certain  Matters.  Each of the parties hereto shall give
        prompt  notice to the other  parties  hereto  of (i) the  occurrence  or
        nonoccurrence  of any event the occurrence or nonoccurrence of which has
        caused or would be likely to cause any  representation  or  warranty  of
        such party contained in this Agreement to be untrue or inaccurate in any
        material  respect at or prior to the Closing  Date and (ii) any material
        failure of such party,  as the case may be, to comply with or satisfy in
        any material respect any covenant, condition or agreement to be complied
        with or satisfied by it hereunder;  provided, however, that the delivery
        of any notice pursuant to this Section 8.5 shall not cure such breach or
        non-compliance  or limit or  otherwise  affect  the  remedies  available
        hereunder to the party receiving such notice.

8.6.    Additions to and Modification of Disclosure Schedule.  Concurrently with
        the execution and delivery of this Agreement, Endan shall have delivered
        the  Endan  Disclosure  Schedule  to DSI and DSSI,  and DSI  shall  have
        delivered  the DSI  Disclosure  Schedule  to  Endan,  which in each case
        includes all of the information  required by the relevant  provisions of
        this Agreement. In addition,  Endan and DSI shall deliver such additions
        to or modifications  of the Endan Disclosure  Schedule or DSI Disclosure
        Schedule,  respectively,  necessary  to make the  information  set forth
        therein true,  accurate and complete in all material respects as soon as
        practicable  after  such  information  is  available  to  Endan  or DSI,
        respectively,   after  the  date  of  execution  and  delivery  of  this
        Agreement;  provided,  however, that such disclosure shall not be deemed
        to  constitute  an  exception  to  its  representations  and  warranties
        hereunder, nor limit the rights and remedies of the other Parties hereto
        under  this  Agreement  for  any  breach  of  such   representation  and
        warranties.

                                   ARTICLE IX

       Conditions To Consummation Of The Transactions Contemplated Hereby

9.1.    Conditions to Each Party's  Obligations to Effect the Transactions.  The
        respective   obligations   of  each  party  hereto  to  consummate   the
        transactions  contemplated  hereby are subject to the satisfaction at or
        prior to the Closing Date of the following conditions:

        9.1.1   no statue, rule, regulation,  executive order, decree, ruling or
                injunction  shall have been  enacted,  entered,  promulgated  or
                enforced by any court or any Governmental Entity that prohibits,
                restrains,   enjoins  or  restricts  the   consummation  of  the
                transactions contemplated hereby.

9.2.    Conditions to the  Obligations of the  Shareholders.  The obligations of
        the  Shareholders  to  sell  the  Shares  to  DSI  are  subject  to  the
        satisfaction at or prior to the Closing Date of the following conditions
        and the receipt of the following documents:

        9.2.1   the  representations and warranties of DSSI and DSI contained in
                this Agreement  shall be true and correct,  except to the extent
                that the  aggregate  of all  breaches  thereof  would not have a
                Material  Adverse  Effect on DSSI or DSI,  as of the date hereof
                and at and as of the Closing Date with the same


                                       44
<PAGE>

                effect as if made at and as of the Closing  Date  (except to the
                extent such  representations and warranties  specifically relate
                to an  earlier  date,  in which  case such  representations  and
                warranties  shall be true and  correct as of such  earlier  date
                and, in any event,  subject to the  foregoing  Material  Adverse
                Effect  qualification),  and at the  Closing  DSSI and DSI shall
                have delivered to the  Shareholders a certificate to that effect
                executed by an officer of DSSI and DSI, respectively;

        9.2.2   each of the material  covenants and  obligations of DSI and DSSI
                to be performed  at or before the Closing  Date  pursuant to the
                terms of this  Agreement  shall have been duly  performed in all
                material  respects  at or before the  Closing  Date and,  at the
                Closing, DSSI and DSI shall have delivered to the Shareholders a
                certificate  to that  effect  executed by an officer of DSSI and
                DSI;  all the  documents to be delivered by DSSI or DSI pursuant
                to  Article  3  hereof   shall  be  in  a  form  and   substance
                satisfactory to the Shareholders,  and shall have been delivered
                to the Shareholders;

        9.2.3   the  Shareholders  shall  have  received  the  opinion  of legal
                counsel  to  DSI  in  a  form  reasonably  satisfactory  to  the
                Shareholders;

        9.2.4   the  Shareholders  shall  have  received  the  opinion  of legal
                counsel  to  DSSI  in a  form  reasonably  satisfactory  to  the
                Shareholders;

        9.2.5   the consents of any Governmental  Entity necessary to consummate
                the transactions  contemplated hereby and to continue to operate
                the  businesses  of DSI after the Closing  Date in all  material
                respects  as they were  operated  prior  thereto and as they are
                presently  contemplated to be conducted in the future shall have
                been given,  obtained or complied with, as applicable,  and such
                consents or approvals shall be in form and substance  reasonably
                satisfactory to the Shareholders; and

        9.2.6   The  Israeli  tax  authorities  shall have  issued a ruling (the
                "Pre-Ruling")  to the effect  that the receipt of the DSI Shares
                by the Shareholders  will not be treated as being taxable to the
                Shareholders.

9.3.    Conditions  to  the   Obligations   of  DSI  and  DSSI.  The  respective
        obligations of DSI and DSSI to consummate the transactions  contemplated
        hereby are subject to the  satisfaction  at or prior to the Closing Date
        of the following conditions and the receipt of the following documents:

        9.3.1   the  representations  and warranties of the  Shareholders and of
                the Endan  Warrantors  contained in this Agreement shall be true
                and  correct,  except to the extent  that the  aggregate  of all
                breaches  thereof  would not have a Material  Adverse  Effect on
                Endan,  in each case as of the date  hereof and at and as of the
                Closing  Date  with the same  effect as if made at and as of the
                Closing  Date  (except to the extent  such  representations  and
                warranties specifically relate to an earlier date, in which case
                such representations and warranties shall be true and correct as
                of such earlier date and, in any event, subject to the foregoing
                Material Adverse Effect  qualification) and, at the Closing, the
                Shareholders  shall have delivered to DSI  certificates  to that
                effect, executed by the Shareholders;


                                       45
<PAGE>

        9.3.2   each of the material  covenants and  obligations of Endan or the
                Shareholders  to be  performed  at or before  the  Closing  Date
                pursuant  to the terms of this  Agreement  shall  have been duly
                performed in all material respects at or before the Closing Date
                and, at the Closing,  the  Shareholders  shall have delivered to
                DSI certificates to that effect,  executed by the  Shareholders;
                all the  documents to be delivered by Endan or the  Shareholders
                pursuant  to  Article  3 hereof  shall be in form and  substance
                satisfactory to DSI, and shall have been delivered to DSI;

        9.3.3   DSI and DSSI shall have received the opinion of legal counsel to
                Endan,  Kardan and  Neuwirth  Investments  in a form  reasonably
                satisfactory to DSI and DSSI;

        9.3.4   Endan shall have obtained the consent or approval of each person
                listed on Schedule  9.3.4 to the  transactions  contemplated  by
                this Agreement;

        9.3.5   the Board of  Directors of Endan  appointed by the  Shareholders
                shall  have  tendered  their  resignations  from  the  Board  of
                Directors;

        9.3.6   DSI  shall  have  received  an  executed   Heads  of  Employment
                Agreement  by Noy,  in the form of Exhibit  9.3.6A  hereto  (the
                "Employment Agreement"),  whereby Noy shall agree to be employed
                by DSI or  Endan  as the CEO of DSI for at  least  two  years on
                terms not less  favorable to Noy on a gross  economic basis than
                the terms of his employment  with Endan,  and within thirty (30)
                days of the Closing,  Noy shall execute;  (x) a full  employment
                agreement  conforming with the terms thereof,  along with (y) an
                executed  Non-Compete  and  Non-Disclosure  Agreement  in a form
                reasonably satisfactory to DSI;

        9.3.7   DSI  shall  have  received  evidence  of  cancellation  of Gilad
                Landau's stock option  agreement with Endan to take effect as of
                the Closing; and

        9.3.8   The  Shareholders  shall  delivered  to DSSI  audited  financial
                statements  of Endan for the year ended  December  31,  2000 and
                reviewed  financial  statements  for the nine month period ended
                September  30, 2001,  which  financial  statements  shall (a) be
                translated to English and contain a footnote with reconciliation
                to U.S. generally  accepted  accounting  principles,  (b) comply
                with Item 17 of Form 20-F and (c) have been  audited or reviewed
                (as the  case  may be) by  Luboshitz,  Kasierer  & Co.,  Endan's
                independent public accountants.

                                    ARTICLE X

            Covenants of the Parties from and after The Closing Date

10.1.   Board of  Directors.  As of the  Closing  and  thereafter,  the Board of
        Directors of DSI, Endan and any of their subsidiaries shall each consist
        of six  (6)  directors,  who  shall  be  appointed  by  way  of  written
        appointment as follows: (i) DSSI shall have the right to appoint, remove
        from office and replace four (4)  directors;  (ii) Kardan shall have the
        right to appoint,  remove from office and replace one (1) director  (the
        "Kardan  Director");  provided,  that  unless  otherwise  agreed  by the
        Chairman of the Board of


                                       46
<PAGE>

        Directors of DSI, the Kardan Director shall be Yisrael Frieder,  so long
        as he  remains  an  employee  of  Kardan  or its  Affiliates;  (iii) and
        Neuwirth Investments shall have the right to appoint, remove from office
        and replace one (1)  director;  provided,  that so long as Noy serves as
        the Chief Executive Officer of DSI, Neuwirth Investments may not appoint
        anyone other than Noy as director;  and provided,  further, that a Party
        shall not have the right to appoint, remove and replace a director under
        this  Section  9.1  if  such  Party  ceases  to own  5% or  more  of the
        outstanding Ordinary Shares.

10.2.   Management.

        10.2.1  As of the  Closing and  thereafter,  Noy will serve as the Chief
                Executive  Officer  of DSI in  accordance  with  the  Employment
                Agreement.

        10.2.2  From and after the  Closing  Date,  management  services  to DSI
                provided by any of its  shareholders  shall be (i)  purchased at
                arm's-length  terms as would be standard  for  similar  services
                provided  between  unrelated  parties,  and (ii)  subject to the
                reasonable  consent of the Kardan Director;  provided,  however,
                that the remuneration provided for under the current arrangement
                for  management  services  being provided by DSSI to DSI and any
                renewals thereof shall not be subject to this Section 10.2.2 (it
                being  understood  that the mixture of services  provided  under
                such  arrangement  will be subject  to the  consent of the Chief
                Executive Officer and the Chairman of the Board of Directors).

        10.2.3  DSI's annual budget and working plan (the "Annual Budget") shall
                be  approved by a committee  of the Board of  Directors  of DSI,
                consisting of the Chairman of the Board of Directors,  the Chief
                Financial Officer,  the Chief Executive Officer and an appointee
                of the Chief Executive Officer.

        10.2.4  The  Chief  Financial  Officer,  Chief  Operations  Officer  and
                Marketing  Director  of DSI  shall  be  appointed,  removed  and
                replaced by the Chairman of the Board of Directors and the Chief
                Executive Officer of DSI.

        10.2.5  The Chief Executive  Officer of DSI shall be appointed,  removed
                and replaced by the Board of  Directors  of DSI,  subject to the
                consent  of the  Kardan  Director,  which  consent  shall not be
                withheld other than for a reasonable  cause. The Chairman of the
                Board of Directors of DSI shall  propose  candidates to fill the
                office of the Chief Executive Officer.

10.3.   Consent  Requirement.  From and  after  the  Closing  Date and until the
        earlier  of  (x)  consummation  of an  initial  public  offering  of the
        Ordinary  Shares pursuant to an effective  registration  statement under
        the Act or equivalent law of another jurisdiction other than an offering
        solely  in  connection  with a stock  incentive  plan (an  "IPO") or (y)
        Kardan owns, directly,  less than 5% of the outstanding Ordinary Shares,
        the  following  matters,  if and when  presented  to the  approval  of a
        general meeting of DSI shareholders, shall require the consent of Kardan
        and, if and when  presented to the approval of the Board of Directors of
        DSI or to any committee thereof, shall require the consent of the Kardan
        Director:

        10.3.1  The  adoption  of  any  resolution   amending  the  Articles  of
                Association or Memorandum of Association of DSI;

        10.3.2  The  issuance  of any  equity  securities  of DSI or  rights  to
                acquire  such  securities,  other than (a) the issuance of stock
                options to employees, officers,


                                       47
<PAGE>

                directors or  consultants  of DSI pursuant to the 2001 DSI Stock
                Option Plan or any other  incentive  plan  approved  pursuant to
                this Section 10.3 or the exercise  thereof,  (b) the issuance of
                incentive  warrants to customers of DSI or the exercise thereof,
                or (c) the issuance of Ordinary  Shares to DSSI upon  conversion
                of the Preferred Shares in connection with an IPO;

        10.3.3  The adoption of new line items in the Annual Budget that did not
                appear in the Annual Budget of previous years;

        10.3.4  Any  transaction  with a value of more than $50,000 which is not
                in  the  ordinary   course  of  business  of  DSI,  unless  such
                transaction is contemplated in the applicable Annual Budget;

        10.3.5  Any transaction in which any "Interested Party" (as such term is
                defined in the  Israeli  Companies  Law  5759-1999),  other than
                Kardan,   shall  have  a  personal  interest,   other  than  (i)
                transactions  in the ordinary course of business with a value of
                less than  $100,000  or (ii)  transactions  not in the  ordinary
                course of business with a value of less than $10,000;

        10.3.6  The appointment, removal or replacement of the auditors of DSI;

        10.3.7  The liquidation or winding up of DSI; and

        10.3.8  Any of the following matters, provided that such matters are (a)
                material to DSI, (b) strategically  important to DSI, and (c) of
                such nature that would  generally  be brought to the approval of
                the Board of Directors of DSI:

                10.3.8.1 Any acquisition, sale, lease, mortgage, pledge or other
                         disposition of assets of DSI  representing  20% or more
                         of the fair market value of the total assets of DSI;

                10.3.8.2 Any  merger,  consolidation  or other form of  business
                         combination of DSI with another Person;

                10.3.8.3 The  formation  of a  company  or  partnership,  or the
                         acquisition of shares or other equity  interests in any
                         Person;

                10.3.8.4 Any  investment,  loan or capital  contribution  to any
                         Person  other than (x) an  investment,  loan or capital
                         contribution  to a  subsidiary  of DSI or (y)  loans to
                         employees of DSI in the ordinary course of business;

                10.3.8.5 The entry into any  endeavor  or project not within the
                         primary business of DSI; and

                10.3.8.6 Withdrawal from any existing line of business.

        The  limitations  described  in this  Section  10.3  shall  apply to the
        actions  of Endan and any other  subsidiary  of DSI,  and the  rights of
        Kardan under this Section 10.3 are assignable to the extent permitted by
        Section 13.4 hereof.

10.4.   Dividend Policy. From and after the Closing Date and prior to the IPO, a
        committee  of the Board of Directors  of DSI,  consisting  of the Kardan
        Director,  the director appointed by Neuwirth  Investments under Section
        9.1  and  one  of  the  directors  appointed  by  DSSI  (the  "Dividends
        Committee") shall be empowered to make


                                       48
<PAGE>

        recommendations   with  respect  to  distribution  of  dividends.   Such
        recommendations  shall  be  approved  by at  least  a  majority  of  the
        Dividends  Committee's members. The parties hereto undertake to take all
        actions as may be required to cause  dividends to be  distributed  in at
        least the amount recommended by the Dividends Committee.

10.5.   Preemptive  Rights.  Commencing  immediately  following  the Closing and
        terminating  upon  the  IPO,  each  of  the  Parties  hereto  (each,  an
        "Offeree")  shall, in respect of the Ordinary Shares held by such Party,
        have a  preemptive  right to purchase  its  pro-rata  share (or any part
        thereof) of New Securities (as defined below) that DSI may, from time to
        time,  propose to sell and issue.  The pro rata share which each Offeree
        may  purchase  hereunder  shall be the ratio of the  number of  Ordinary
        Shares  held by such  Offeree  as of the date of the  Rights  Notice (as
        defined below),  to the total number of issued and outstanding  Ordinary
        Shares as of such date.  This  preemptive  right shall be subject to the
        following provisions:

        10.5.1  "New  Securities"  shall mean any  Ordinary  Shares or preferred
                shares of any kind of DSI, whether now or hereafter  authorized,
                any rights,  options,  or warrants to subscribe for, purchase or
                otherwise acquire said Ordinary Shares or preferred shares,  and
                any debt securities of DSI that are, or may become,  convertible
                into  said  Ordinary  Shares  or  preferred  shares;   provided,
                however,  that "New Securities" shall not include (i) securities
                offered  to the  public in the IPO;  (ii)  securities  issued to
                employees,  officers,  directors or consultants of DSI under any
                share option plan or share  incentive  plan duly approved by the
                Board  of  Directors;  (iii)  securities  issued  to  "strategic
                investors"  of DSI,  which means an investor  which is active in
                areas  related to the DSI  business,  has annual  revenues of at
                least $10 million and is a  significant  customer of DSI, or has
                entered into a  collaboration  agreement  or other  pre-existing
                relationship  with DSI which is of  strategic  value to DSI,  as
                determined  by the  Board of  Directors  of DSI;  (iv)  Ordinary
                Shares or preferred  shares issued by DSI in connection with any
                stock split, stock dividend, recapitalization, reclassification,
                subdivision,  combination  or  similar  event;  or (v)  Ordinary
                Shares issued to DSSI upon conversion of the Preferred Shares in
                connection with an IPO.

        10.5.2  If DSI proposes to issue New  Securities,  it shall give each of
                the  Offerees a written  notice  (the  "Rights  Notice")  of its
                intention,  describing  the New  Securities,  the  price and the
                general  terms upon which DSI proposes to issue them,  and offer
                to issue and sell to such  Offeree  its pro rata  share (in this
                Section, the "Pro Rata Share") and any additional portion of the
                New  Securities  as such  Offeree  shall  indicate he or it will
                purchase or acquire should the other Offerees subscribe for less
                then  their  Pro Rata  Share  (the  "Additional  Amount").  Each
                Offeree  shall  have  fourteen  (14) days from  delivery  of the
                Rights  Notice to agree to purchase an amount of New  Securities
                up to the  number  described  above,  for the price and upon the
                general  terms  specified in the Rights  Notice,  by  delivering
                written  notice to DSI prior to the  expiration  of the fourteen
                days,  setting  forth the  quantity of New  Securities  that the
                Offeree elects to purchase. In the event that the Pro Rata Share
                subscribed for by all Offerees are less than the total amount of
                New  Securities,   then  each  Offeree  who  has  set  forth  an
                Additional Amount shall be entitled to purchase,  in addition to
                its Pro Rata  Share,  a pro rata  portion of the  remaining  New
                Securities  (calculated  based on the  ratio  of the  Additional
                Amount  subscribed  for by such Offeree to the total  Additional


                                       49
<PAGE>

                Amounts  subscribed  for by all  Offerees),  not to  exceed  the
                Additional Amount set forth by such Offeree.

        10.5.3  If the Offerees do not exercise the preemptive  right in respect
                of all the New Securities, DSI shall have ninety (90) days after
                delivery of the Rights Notice to sell the unsold New  Securities
                at a price and upon general terms  equivalent to those specified
                in the  Rights  Notice.  If DSI has not sold the New  Securities
                within said ninety  (90) day  period,  DSI shall not  thereafter
                issue or sell any New  Securities  without  first  offering such
                securities to the Offerees in the manner provided above.

10.6.   Right of First Refusal.  Commencing on the Closing Date and  terminating
        upon the IPO,  any  Transfer  of  Ordinary  Shares or rights to  acquire
        Ordinary Shares, other than a Bring Along Sale under Section 10.8, shall
        be subject to the following:

        10.6.1  Any  Party  proposing  to  Transfer  all or any of his  Ordinary
                Shares or any rights to acquire  Ordinary  Shares (the "Seller")
                shall first offer such  Ordinary  Shares or rights (the "Offered
                Shares") to all the other Parties (the "Buyers"), by sending the
                Buyers a written  notice  (the  "Offer"),  stating  therein  the
                identity of the Seller and of the  proposed  transferee(s),  the
                number of  Offered  Shares,  the  consideration  per share to be
                delivered  to the Seller for the proposed  transaction,  and all
                other proposed terms of the  transaction.  Each Buyer shall have
                an option,  exercisable  for a period of fourteen  (14) Business
                Days after the Offer is delivered to such Buyer, to purchase, at
                a price and upon the other terms  specified in the Offer,  up to
                such portion of the Offered  Shares as the  aggregate  number of
                Ordinary  Shares  then  held by that  Buyer  bears to the  total
                number of the then issued and  outstanding  Ordinary Shares (the
                "Proportional Share") plus any additional portion of the Offered
                Shares as such Buyer shall  indicate  he or it will  purchase or
                acquire  should the other Buyers  subscribe  for less than their
                Proportional  Share  (the  "Additional  Shares"),  by giving the
                Seller  notice to that effect within such fourteen (14) Business
                Day period.

        10.6.2  If the Proportional  Share subscribed for by all Buyers are less
                than the total number of Offered Shares, then each Buyer who has
                set forth  Additional  Shares shall be entitled to purchase,  in
                addition to the  Proportional  Share  subscribed for, a pro rata
                portion of the remaining Offered Shares (calculated based on the
                ratio of the Additional  Shares  subscribed for by such Buyer to
                the total Additional Shares  subscribed for by all Buyers),  not
                to exceed the Additional Shares set forth by such Buyer.

        10.6.3  If the Buyers do not  exercise the option to purchase all of the
                Offered  Shares,  then the option to purchase the Offered Shares
                shall  terminate,  and the Seller  shall be entitled to Transfer
                all  (but  not  less  than  all) of the  Offered  Shares  to the
                proposed  transferee(s)   identified  in  the  Offer;  provided,
                however,  that in no event shall the Seller  Transfer any of the
                Offered  Shares to any  transferee  other  than  such  accepting
                Buyers or such  proposed  transferee(s)  or Transfer the same on
                terms more favorable to the  transferee(s)  than those stated in
                the Offer,  and provided  further that any of the Offered Shares
                not Transferred  within ninety (90) days after the expiration of
                such fourteen (14) Business Day period shall again be subject to
                the provisions of this Section.


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<PAGE>

        10.6.4  Notwithstanding  the above,  in the event that the Seller is any
                of the  Shareholders,  such  Seller  shall  initially  offer the
                Offered Shares to the other Shareholders, in accordance with the
                procedure describe above, mutatis mutandis, and should they fail
                to  purchase  all of the Offered  Shares  within the time period
                specified above, he or it shall then offer the Offered Shares to
                the other Parties.

        10.6.5  Anything contained herein to the contrary  notwithstanding,  any
                Party may freely  Transfer  any or all of his shares to (i) such
                Party's  parent,  spouse,  child,  brother,   sister  and  their
                spouses;  (ii) any Affiliate of such Party; or (iii) a custodian
                or a nominee  of such  Party for the  benefit  of such  Party (a
                "Permitted Transferee").  Any Permitted Transferee shall execute
                a document whereby such Permitted  Transferee agrees to be bound
                by the provisions of this Agreement.

10.7.   Co-Sale. Commencing on the Closing Date and terminating upon the IPO, in
        the event that DSSI  proposes to sell  Offered  Shares,  other than to a
        Permitted Transferee,  and any Shareholder (hereinafter in this Section,
        the  "Co-Seller")  has not  exercised  its right of first  refusal under
        Section 10.6 above, then the Co-Seller shall have the right to demand to
        participate in such a sale by DSSI, and the following  provisions  shall
        apply:

        10.7.1  The Co-Seller  shall  provide a written  notice to DSSI no later
                than fourteen (14) Business Days after the Offer is delivered to
                the  Co-Seller,   informing  DSSI  that  the  Co-Seller  is  not
                exercising its right of first refusal under Section 10.6 to this
                Agreement,  and that  the  Co-Seller  desires  to  exercise  its
                co-sale   right  under   Section  9.7  of  this   Agreement   by
                participating in the sale of Ordinary Shares by DSSI on the same
                terms and conditions as detailed in the Offer, which notice will
                indicate  the number of Ordinary  Shares of the  Co-Seller to be
                included in the sale by DSSI ("Co-Sale  Shares"),  provided that
                the  number of  Co-Sale  Shares  shall not  represent  a greater
                proportion of the Ordinary Shares held by the Co-Seller than the
                proportion  of the Offered  Shares to all  Ordinary  Shares then
                owned by DSSI;

        10.7.2  DSSI  shall  use  its  best  efforts  to  cause  the   purchaser
                identified in the Offer to purchase the Co-Sale Shares;

        10.7.3  In the event that such  purchaser  does not wish to purchase all
                of the Offered Shares and the Co-Sale Shares,  then each of DSSI
                and the Co-Seller shall be entitled to sell, at the price and on
                the terms and  conditions  set forth in the Offer,  a portion of
                the shares being sold to the transferee,  in the same proportion
                as DSSI or Co Seller's ownership of Ordinary Shares of DSI bears
                to the aggregate  number of Ordinary Shares of DSI owned by DSSI
                and the Co Seller;

        10.7.4  In the event that the Co-Seller elects to sell less than maximum
                number  of  Co-Sale  Shares   permitted  by  this  Section  10.7
                ("Shortfall"),  DSSI  shall be  entitled  to sell an  additional
                number of Ordinary Shares equal to the Shortfall.

10.8.   Bring  Along.  In the event  that DSSI  shall  propose  to sell,  in one
        transaction  or a series  of  related  transactions,  to any  Person  or
        Persons not  including any Permitted  Transferee  (in this Section,  the
        "Buyer"),  at  least  85% of the  Ordinary  Shares  held by it as of the
        Closing Date ("Bring Along Sale"),  then DSSI shall be entitled,  at its
        option, to require each shareholder of DSI to include in the Bring Along
        Sale up to a


                                       51
<PAGE>

        pro rata portion of its DSI Shares, calculated based on the ratio of the
        shares sold by DSSI to the total number of Ordinary  Shares then held by
        DSSI,  at the same price and upon the same terms and  conditions as DSSI
        agreed  to  with  respect  to  its   Ordinary   Shares   (wherein,   any
        consideration received by DSSI with respect to its Preferred Shares sold
        as part of the  Bring  Along  Sale,  which is in  excess  of the  amount
        payable with respect to such Preferred Shares upon liquidation of DSI in
        accordance with the Amended Articles,  shall be deemed, for the purposes
        of this  Section,  to have been  received  with  respect to the Ordinary
        Shares).

10.9.   Reports  and  Statements.  Without  derogating  from the  rights  of the
        shareholders of DSI under law, from and after the Closing Date and until
        the IPO, DSI shall deliver to each  shareholder  party hereto who holds,
        and only so long as it so holds, at least ten percent (10%) of the share
        capital of DSI:

        10.9.1  Audited annual financial statements, within sixty (60) days from
                the end of each fiscal  year  (provided,  that the  shareholders
                shall not publish or otherwise release such financial statements
                prior to the earlier of (i)  expiration of ninety (90) days from
                the end of such fiscal year or (ii) the date when such financial
                statements are being published by DSSI), and unaudited  reviewed
                quarterly financial statements, within forty-five (45) days from
                the end of each fiscal quarter.  Such financial statements shall
                include a  consolidated  balance sheet of DSI at the end of such
                year or quarter,  as the case may be, and  statements  of income
                and statements of cash flow of DSI for such year or quarter,  as
                the  case  may  be,  all  in  reasonable  detail,   prepared  in
                accordance  with the format  required by the Israeli  Securities
                Authority,  and  audited or  reviewed,  as the case may be, by a
                recognized firm of independent certified public accountants;

        10.9.2  Monthly records of sales,  within fifteen (15) days from the end
                of each month;

        10.9.3  A report providing  details with respect to an event which could
                be reasonably expected to have a Material Adverse Effect on DSI,
                as soon as possible after the occurrence of such event; and

        10.9.4  Any other information  reasonably requested by such shareholder,
                which  shall be  necessary  in order  for  such  shareholder  to
                monitor his or its investment in DSI.

10.10.  Undertaking.  Each of the parties  hereto  undertakes to comply with the
        Pre-Ruling, insomuch as the Pre-Ruling is not more restrictive as to the
        interests of such party than are the  provisions  of Sections 103 or 104
        of the Israeli Income Tax Ordinance (New Version), [1961].

10.11.  Incidental  Registration  Rights.  At any time following the IPO, in the
        event  that  DSI  proposes  to  register  any of  its  shares  or  other
        securities under the Act, or equivalent law of another jurisdiction,  in
        connection  with an  underwritten  public  offering  of such  securities
        (other than a registration  solely for sale of the securities  under any
        employee  benefit  plan, a  registration  effected  pursuant to Rule 145
        promulgated  under the Act, or a registration on any form which does not
        include  substantially  the same  information as would be required to be
        included  in a  registration  statement  covering  the  sale  of the DSI
        Shares), DSI shall, at such time, promptly give each Shareholder written
        notice of such registration. Upon the written request of any Shareholder
        given within twenty (20) days after receipt of such notice from DSI, DSI
        shall  cause to be included  in the  registration  all of the DSI Shares
        that each such  Shareholder  has requested to be registered,  subject to
        the following terms and conditions:


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<PAGE>

        10.11.1 All  Shareholders  proposing  to  distribute  their  DSI  Shares
                through  such  underwriting  shall  enter  into an  underwriting
                agreement in customary form with the underwriter or underwriters
                selected for the underwriting by DSI;

        10.11.2 If the managing  underwriter  advises DSI in writing that in its
                opinion  the number of  securities  requested  to be included in
                such registration would adversely affect the offering,  then DSI
                may  limit  the  number  of  shares  to  be   included  in  such
                registration,  and the number of shares  that may be included in
                the registration shall be allocated,  first, to DSI, and second,
                to  each  of  the  shareholders   (including  the  Shareholders)
                requesting  inclusion  of  their  shares  in  such  registration
                statement  on a pro rata  basis  based on the  total  number  of
                Ordinary Shares then held by such shareholders, and in the event
                that any  shareholder  would thus be  entitled  to include  more
                securities than such shareholder requested to be registered, the
                excess   shall  be   allocated   among  the   other   requesting
                shareholders, pro rata, in the manner described above.

10.12.  Referrals of Business  Opportunities.  From and after the Closing  Date,
        each of DSSI,  Kardan and Noy shall refer by written notice all business
        opportunities  in  Israel  in  the  fields  of  information   technology
        projects,  integration  of  IT,  software  development  outsourcing  and
        software  services to DSI.  Such notice shall,  to the extent  possible,
        provide  background,  details and specifications for such opportunities.
        Within 21 days after the date it  receives  such notice from a referring
        Party,  if DSI  fails  to give  notice  to the  referring  party  of its
        intention to pursue such  business  opportunity,  such  referring  Party
        shall be entitled to pursue such opportunity itself,  provided that such
        business does not directly  compete with DSI's  business as conducted or
        proposed to be conducted at that time.

10.13.  Consents  and  Reports of  Auditors.  From and after the  Closing  Date,
        Kardan and Noy shall use their best  efforts to obtain on behalf of DSSI
        and/or DSI any required  consents or reports of any  independent  public
        auditors  who have  prepared,  reviewed  and/or  audited  any of Endan's
        financial  statements  prior to the  Closing  Date  (including,  without
        limitation,  such  consents  and reports of  Luboshitz,  Kasierer & Co.,
        Endan's  independent public  accountants,  for the financial  statements
        delivered to DSSI at the Closing pursuant to Section 9.3.8 hereof).

10.14.  Collateral and Guarantees of Loans.  For a period of two (2) months from
        the Closing  Date,  Kardan shall keep the  collateral  provided by it to
        Bank Hapoalim  (the "Bank") in connection  with a loan or line of credit
        made to Endan  ("Current  Loan") in full force and  effect,  as the same
        shall have existed  immediately prior to the Closing Date. DSI shall, by
        the second month  anniversary  of the Closing Date,  provide  sufficient
        collateral to the Bank to reduce the portion of the Current Loan covered
        by Kardan's  collateral to the lesser of (x) U.S.$240,000 and (y) 32% of
        the  outstanding   Current  Loan.  For  the  next  sixteen  (16)  months
        immediately  following  such two month period,  Kardan shall continue to
        provide collateral for the Current Loan, satisfactory to the Bank, which
        collateral shall cover a portion of the Current Loan equal to the lesser
        of (x)  U.S.$240,000  and (y) 32% of the  outstanding  Current Loan. DSI
        shall,  by the eighteen month  anniversary of the Closing Date,  provide
        sufficient  collateral to the Bank to release the collateral provided by
        Kardan  hereunder.  DSSI hereby  undertakes to ensure the performance by
        DSI of its obligations under this Section 10.14.

10.15.  2001 Financial Statements. Each of Kardan and Neuwirth Investments shall
        provide  all  necessary   assistance  to  DSI  in  connection  with  the
        preparation of audited annual


                                       53
<PAGE>

        financial  statements  of Endan for the fiscal year ending  December 31,
        2001, which shall be prepared in all material respects in accordance (x)
        with U.S.  generally  accepted  principles or (y) with Israeli generally
        accepted  accounting  principles with a reconciliation  footnote to U.S.
        generally  accepted  accounting  principles,  accompanied  by  an  audit
        opinion thereon of Luboshitz, Kasierer & Co., Endan's independent public
        accountants, and in compliance in all other respects with Item 17 of SEC
        Form 20-F (the "2001 Endan Financial Statements").

                                   ARTICLE XI

                                   Termination

11.1.   Termination  This  Agreement  may be  terminated  and  the  transactions
        contemplated  hereby may be  abandoned  at any time prior to the Closing
        Date:

        11.1.1  by mutual written consent of DSI, DSSI and the Shareholders;

        11.1.2  by any of DSI,  DSSI or the  Shareholders  if (i) any  court  of
                competent  jurisdiction  or any  Governmental  Entity shall have
                issued a final order, decree or ruling, or taken any other final
                action,  restraining,  enjoining  or otherwise  prohibiting  the
                transactions  contemplated hereby and such order, decree, ruling
                or other action is or shall have become  non-appealable  or (ii)
                the transactions  contemplated  hereby have not been consummated
                by December 31, 2001 (the "Final Date");  provided that no party
                may  terminate  this  Agreement  pursuant to this clause (ii) if
                such  party's  failure to fulfill any of its  obligations  under
                this  Agreement  shall  have been a  principal  reason  that the
                Closing Date shall not have occurred on or before said date.

                                   ARTICLE XII

                            Survival; Indemnification

12.1.   Survival  of   Representations   and  Warranties   and  Covenants.   The
        representations  and warranties  set forth herein shall survive  through
        the second  anniversary of the Closing Date, except the  representations
        and  warranties in Sections  4.1,  4.2,  4.6, 4.7, 5.2, 5.3, 5.6,  5.15,
        5.21, 6.2, 6.3, 6.4, 6.7, 6.16 and 6.22,  which shall survive and remain
        in effect until the expiration of the applicable statute of limitations.
        Further,  any covenant in this  Agreement  which by its terms,  requires
        performance  by a Party after the Closing Date shall survive the Closing
        Date for the period set forth in such covenant, and if no time period is
        ascribed in such covenant, indefinitely.

12.2.   Indemnification  by DSI and DSSI.  Each of DSI and DSSI  hereby  agrees,
        severally,  to indemnify  and hold the  Shareholders  harmless  from and
        against any and all damages, awards, judgments, payments, diminutions in
        value, all interest thereon, costs and expenses of investigating claims,
        lawsuits or arbitration and any appeal from any of


                                       54
<PAGE>

        the  foregoing  and  reasonable  attorneys  fees  incurred in connection
        therewith (collectively, the "Damages") resulting from

        (i)     any    misrepresentation,    breach   of   any   warranty,    or
                non-fulfillment  of any  covenant  or  agreement  of DSI or DSSI
                contained  in this  Agreement or in any  statement,  attachment,
                schedule or certificate  attached to this Agreement or delivered
                at the Closing or

        (ii)    for a period of three years from the Closing Date, any liability
                of DSI or any DSI  Subsidiary  with respect to taxes relating to
                periods  or  events  prior  to  the  DSI  Balance  Sheet,  which
                liability was not  adequately  provided for in the DSI Financial
                Statements,

        but in any such case,  only if such Damages  exceed  $375,000  ("Minimum
        Damages"),  in which case the  indemnification  obligation  provided for
        herein  shall be  effective  with respect of any and all Damages and not
        only with  respect to the  amount of  Damages  in excess of the  Minimum
        Damages. Any indemnification liability of DSSI or DSI solely pursuant to
        clause (ii) above shall be satisfied  by the  deduction of the amount of
        such liability  from the Preference  Amount (as defined in Article 66 of
        the  Amended  Articles)  , and any  excess  of such  liability  over the
        Preference  Amount shall be paid,  at the option of DSSI,  either (x) by
        the  transfer  of cash or  other  value  from  DSSI to DSI or (y) by the
        transfer to the indemnified Shareholder of a percentage of the amount of
        such liability which is equal to such Shareholder's ownership percentage
        of the outstanding  Ordinary Shares on the Closing Date disregarding any
        Ordinary Shares issuable upon the conversion of the Preferred  Shares or
        upon the  exercise of the  Option.  DSSI and DSI shall not be liable for
        Damages of any  Shareholder  that is in excess of an amount equal to, in
        respect of each Shareholder,  (A) the amount set forth opposite the name
        of such  Shareholder  under the column  "maximum  indemnity from DSI" on
        Schedule 3.2 hereof,  minus (B) (x) if such Shareholder  shall have sold
        his or its DSSI Shares as of the date such  liability  is  payable,  the
        aggregate  price  paid or to be paid for such DSSI  Shares,  (y) if such
        Shareholder  shall  have not sold  any of his or its DSSI  Shares,  such
        Shareholder's  "Percentage of DSSI Shares" (as set forth on Schedule 3.2
        hereof) of $2.25 million,  and (z) if such  Shareholder  shall have sold
        some but not all of his or its  DSSI  Shares,  the sum of (I) the  price
        paid or to be paid for the DSSI Shares sold,  plus (II) a percentage  of
        the amount determined in the preceding clause (y) (which percentage will
        be equal to the quotient of the number of DSSI Shares unsold  divided by
        the number of DSSI Shares  such  Shareholder  received at Closing)  (the
        "Shareholders  Maximum  Damages").  Notwithstanding  the foregoing,  and
        without  limiting  any  other  remedy  that  may  be  available  to  the
        Shareholders, the provisions of this Section 11.2 shall not apply to any
        breach or  non-fulfillment  of the covenants and agreements set forth in
        Article X of this Agreement.  Damages shall be fully  indemnifiable  and
        not  subject to the  Minimum  Damages or  Shareholders  Maximum  Damages
        limitations if such Damages arise from any fraudulent misrepresentation.
        Any payment by DSI to a Shareholder pursuant to this Section (other than
        payment by deduction from liquidation  preference or by transfer of cash
        from DSSI to DSI) shall be grossed up to  account  for the  decrease  in
        value of such Shareholder's Ordinary Shares resulting from such payment.


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<PAGE>

12.3.   Indemnification  by Kardan and Noy.  Each of (x) Kardan and (y) Neuwirth
        Investments jointly with Noy, hereby agrees, severally, to indemnify and
        hold DSI and DSSI harmless from and against

        (i)     any Damages resulting from any misrepresentation,  breach of any
                warranty,  or  non-fulfillment  of  any  covenant  or  agreement
                regarding itself (and in the case of Noy, Neuwirth  Investments)
                contained  in this  Agreement or in any  statement,  attachment,
                schedule or certificate  attached to this Agreement or delivered
                at the Closing, and

        (ii)    its (and in the  case of Noy,  Neuwirth  Investments')  pro rata
                share of the "maximum indemnity to DSI" as set forth against its
                name in Schedule  3.2 hereof  (calculated  among Kardan and Noy,
                and  totaling  100%)  of any  Damages  resulting  from  (A)  any
                misrepresentation, breach of any warranty, or non-fulfillment of
                any covenant or  agreement  regarding  Endan,  contained in this
                Agreement  or  in  any   statement,   attachment,   schedule  or
                certificate  attached  to this  Agreement  or  delivered  at the
                Closing  or (B) for a period  of three  years  from the  Closing
                Date, any liability of Endan or any  Subsidiary  with respect to
                taxes  relating to periods or events prior to the Endan  Balance
                Sheet,  which  liability was not adequately  provided for in the
                Endan Financial Statements,

        but in any such case,  only if such Damages exceed the Minimum  Damages,
        in which case the  indemnification  obligation provided for herein shall
        be  effective  with  respect  of any and all  Damages  and not only with
        respect to the amount of Damages in excess of the Minimum  Damages.  Any
        indemnification  liability of Kardan, Neuwirth Investments or Noy solely
        pursuant to clause  (ii)(B)  above shall be satisfied by the increase by
        the amount of such liability of the  liquidation  preference  payable in
        respect  of  the  Preferred  Shares  in up to an  amount  equal  to  the
        Preference  Amount (as  defined in Article 66 of the  Amended  Articles)
        after giving effect to the  adjustment  called for thereunder in respect
        of the 2001 year end  financials,  and any excess of such liability over
        such  amount  shall  be  satisfied  by the  transfer  of cash to DSI.  A
        Shareholder  shall not be liable  for  Damages of DSI or DSSI that is in
        excess of the  amount  set forth  opposite  such  Shareholder's  name on
        Schedule  3.2 hereof  under the column  "maximum  indemnity to DSI" (the
        "DSSI Maximum  Damages").  Damages shall be fully  indemnifiable and not
        subject to the Minimum  Damages or DSSI Maximum  Damages  limitations if
        such Damages arise from any fraudulent misrepresentation.

12.4.   Notice of Claim,  Assumption of Defense and  Settlement of Claims.  With
        respect to any third  party  claims  against a Party (the  "Indemnitee")
        made subsequent to the Closing Date, the following  procedures  shall be
        observed:

        (a)     the Indemnitee  shall  promptly give notice to the  indemnifying
                Party (the  "Indemnitor")  after the Indemnitee has knowledge of
                any  claim  as to  which  recovery  may be  sought  against  the
                Indemnitor  because  of the  Indemnity  provisions  set forth in
                Sections  12.2 and 12.3  above,  or of the  commencement  of any
                legal  proceedings  against the Indemnitee  with respect to such
                claim after the  Indemnitee  has knowledge or such  proceedings,
                whichever shall first occur,  and shall permit the Indemnitor to
                assume the defense of any such claim or any litigation resulting
                from such  claim with  counsel  reasonably  satisfactory  to the
                Indemnitee. Failure by the Indemnitor to notify the


                                       56
<PAGE>

                Indemnitee  of its election to defend any such action  within 30
                days after notice thereof shall have been given, shall be deemed
                a waiver by the  Indemnitor  of its right to defend  and  settle
                such action.

        (b)     If the  Indemnitor  assumes  the  defense  of any such  claim or
                litigation resulting therefrom,  its obligations hereunder as to
                such claim shall be limited to taking all steps necessary in the
                defense  or  settlement  of such claim or  litigation  resulting
                therefrom  and to  holding  the  Indemnitee  harmless  from  and
                against any and all Damages  awarded in any such  proceeding  or
                arising out of any settlement  approved by the Indemnitor or any
                judgment in connection  with such claim or litigation  resulting
                therefrom.  The  Indemnitor  shall not,  in the  defense of such
                claim or any litigation resulting therefrom, consent to entry of
                any  judgment  (except  with the prior  written  consent  of the
                Indemnitee) or enter into any settlement  (except with the prior
                written consent of the Indemnitee)  which does not include as an
                unconditional  term  thereof  the giving by the  claimant or the
                plaintiff to the  Indemnitee  of a release from all liability in
                respect of such claim or litigation.

        (c)     If the Indemnitor does not assume the defense of any third party
                claim or litigation  resulting  therefrom,  the  Indemnitee  may
                defend against or settle such claim or litigation in such manner
                as it may deem  appropriate,  and the Indemnitor  shall promptly
                reimburse the Indemnitee  for all expenses,  legal or otherwise,
                incurred  by the  Indemnitee  in  connection  with  the  defense
                against and settlement of such claim or litigation,  as and when
                the same shall be incurred by the  Indemnitee.  If no settlement
                of such  claim or  litigation  is  made,  the  Indemnitor  shall
                promptly reimburse the Indemnitee for the amount of any judgment
                rendered with respect to such claim or in such litigation and of
                all expenses, legal or otherwise,  incurred by the Indemnitee in
                the defense against such claim or litigation.

                                  ARTICLE XIII

                                  Miscellaneous

13.1.   Fees and  Expenses.  DSSI shall bear its and DSI's  expenses and each of
        the  Shareholders and Noy shall bear its own expenses in connection with
        this  Agreement  and the  transactions  contemplated  hereby,  including
        without  limitation legal fees,  accounting and auditors fees, and costs
        associated  with  filings,  whether  incurred  before  or after the date
        hereof,  including  the  excess  of the  costs of the audit for the 2001
        Endan  Financial  Statements over any costs that DSI would have incurred
        at any event with respect to Endan as part of the  preparation  of DSI's
        audited annual financial statements for the year 2001.

13.2.   Amendment.  This  Agreement  may be  amended  only by an  instrument  in
        writing signed by all of the parties hereto.

13.3.   Extension;  Waiver.  At any time prior to the Closing  Date,  each party
        hereto  may  (i)  extend  the  time  for the  performance  of any of the
        obligations   or  other  acts  of  the  other  party,   (ii)  waive  any
        inaccuracies in the representations and warranties of the other


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<PAGE>

        party  contained  herein  or in any  document,  certificate  or  writing
        delivered  pursuant hereto or (iii) waive  compliance by the other party
        with any of the agreements or conditions contained herein. Any agreement
        on the part of any party hereto to any such extension or waiver shall be
        valid only if set forth in an instrument,  in writing,  signed on behalf
        of such  party.  The  failure  of any party  hereto to assert any of its
        rights hereunder shall not constitute a waiver of such rights.

13.4.   Entire Agreement;  Assignment.  This Agreement (including the Disclosure
        Schedules)  (a)  constitutes  the entire  agreement  between the parties
        hereto with  respect to the subject  matter  hereof and  supersedes  all
        other prior agreements and understandings  both written and oral between
        the parties with respect to the subject  matter hereof and (b) shall not
        be  assigned by any Party,  whether by  operation  of law or  otherwise,
        without  the prior  consent  of the other  Parties;  provided,  that the
        rights and  obligations of Kardan and Neuwirth  Investments  pursuant to
        Article 10 hereof may be  assigned by Kardan and  Neuwirth  Investments,
        respectively,  in connection  with a sale of all, but not less than all,
        of such Shareholder's DSI Shares to a transferee,  except for the rights
        pursuant to Sections 10.2 or 10.3.3, which may not be assigned by Kardan
        other than to a  Permitted  Transferee;  provided  that such  transferee
        executes a document  whereby he or it agrees to be bound by the relevant
        provisions of this Agreement. No party hereto may transfer any of his or
        its  DSI  Shares  to an  actual  competitor  of  DSI in  the  fields  of
        information technology projects, integration of IT, software development
        outsourcing and software  services  without the approval of the majority
        of the Board of Directors of DSI.  13.5.  Validity.  If any provision of
        this Agreement or the application  thereof to any person or circumstance
        is held invalid or  unenforceable,  the remainder of this  Agreement and
        the  application  of such  provision to other  persons or  circumstances
        shall not be  affected  thereby and to such end the  provisions  of this
        Agreement are agreed to be severable.

13.6.   Notices. All notices, requests, claims, demands and other communications
        hereunder shall be in writing and shall be given (and shall be deemed to
        have been duly given upon receipt) by delivery in person,  by facsimile,
        by registered or certified  airmail  (postage  prepaid,  return  receipt
        requested) or sent by  internationally-recognized  courier to each other
        party as set forth  below or to such other  address as the party to whom
        notice is to be given may have  furnished to the other parties hereto in
        writing in accordance  herewith.  Any such notice or communication shall
        be  deemed  to have  been  delivered  and  received  (a) in the  case of
        personal  delivery,  on the  date of such  delivery,  (b) in the case of
        facsimile,  on the date sent if  confirmation of receipt is received and
        such notice is also  promptly  mailed by  registered  or certified  mail
        (return receipt requested) or by internationally-recognized courier, (c)
        in the  case  of a  internationally-recognized  courier,  on the  second
        business day after the date when sent and (d) in the case of mailing, on
        the fifth  business day  following  that date on which the piece of mail
        containing such communication is posted:

        if to DSI or to DSSI:

        Data Systems and Software Inc.
        200 Route 17
        Mahwah, New Jersey 07430
        United States
        Attention: George Morgenstern
        Facsimile: +1-201-529-3163


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<PAGE>

        with a copy to:

        Eitan, Pearl, Latzer & Cohen-Zedek
        7 Shenkar Street, Herzlia, Israel
        Attention: Joel Stein,Adv.
        Facsimile: +972-9-970-9001

        and to

        Ehrenreich Eilenberg & Krause LLP
        11 East 44th Street
        17th Floor
        New York, New York 10017
        United States
        Attention: Sheldon Krause, Esq.
        Facsimile: +1-212-986-2399

        if to Kardan:

        Kardan Communications Ltd.
        154 Petach Tikva Rd., Tel Aviv 64921, Israel
        Facsimile: +972-3-691-3457

        with a copy to:

        Shem-tov, Ickovics, Engler & Co.
        9 Montefiore St., Tel Aviv 65252, Israel
        Attention: Jay Neustadter, Adv.
        Facsimile: +972-3-5100898

        if to Neuwirth Investments or Noy:

        250 Ben Gurion Rd., Givatayim, Israel
        Facsimile: +972-3-5730935

        if to Givon:

        13 Admonit St., Zoran 42823, Israel
        Facsimile: +972-9-8949442

13.7.   Governing Law;  Venue.  This Agreement shall be deemed to be made in and
        in all respects shall be  interpreted,  construed and governed by and in
        accordance  with the law of Israel without regard to the conflict of law
        principles  thereof.  The  parties  hereby  irrevocably  submit  to  the
        jurisdiction  of the courts of Israel in Tel Aviv/Yafo in respect of the
        interpretation  and  enforcement of the provisions of this Agreement and
        of the documents referred to in this Agreement.


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<PAGE>

13.8.   Descriptive  Headings and Section References.  The descriptive  headings
        herein  are  inserted  for  convenience  of  reference  only and are not
        intended  to be part of or to affect the  meaning or  interpretation  of
        this Agreement. All Article, Section,  subsection,  paragraph and clause
        references  in this  Agreement are to Articles,  Sections,  subsections,
        paragraphs and clauses, respectively, of this Agreement unless otherwise
        specified.

13.9.   Parties in  Interest.  This  Agreement  shall be binding  upon and inure
        solely to the  benefit  of each  party  hereto  and its  successors  and
        permitted assigns and, except as expressly provided in this Agreement to
        the contrary,  nothing in this  Agreement is intended to or shall confer
        upon any other  person any  rights,  benefits  or remedies of any nature
        whatsoever  under or by  reason  of this  Agreement  nor  shall any such
        person be entitled to assert any claim hereunder.

13.10.  Personal  Liability.  Except  as and to the  extent  expressly  provided
        elsewhere  in this  Agreement,  this  Agreement  shall not  create or be
        deemed to create or permit any personal  liability or  obligation on the
        part of any direct or indirect shareholder of any corporate party hereto
        or any officer, director, employee, agent, representative or investor of
        any party hereto.

13.11.  Counterparts.   This   Agreement   may  be   executed  in  one  or  more
        counterparts, each of which shall be deemed to be an original but all of
        which shall constitute one and the same agreement.

13.12.  Guarantee.  Noy hereby agrees to fully and unconditionally  guarantee in
        all  respects,  for the  benefit  of Data  Systems & Software  Inc.  and
        Decision  Systems  Israel Ltd.,  any and all  obligations  of payment or
        performance of Neuwirth  Investments under this Agreement,  for a period
        of seven (7) years from the date hereof.


                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)


                                       60
<PAGE>

        IN WITNESS WHEREOF,  each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.


                                        DATA SYSTEMS AND SOFTWARE INC.


                                        By: s/Yacov Kaufman
                                            ----------------------------------
                                        Name:
                                        Title:


                                        DECISION SYSTEMS ISRAEL LTD.


                                        By: s/Yacov Kaufman
                                            ----------------------------------
                                        Name:
                                        Title:


                                        KARDAN COMMUNICATIONS LTD.


                                        By: s/Avraham Kurzweil
                                            ----------------------------------
                                        Name:
                                        Title:

                                        By: s/Israel Frieder
                                            ----------------------------------
                                        Name:
                                        Title:


                                        ENDAN IT SOLUTIONS LTD.


                                        By: s/Jacob Neuwirth
                                            ----------------------------------
                                        Name:
                                        Title:


                                        NEUWIRTH INVESMENTS LTD.


                                        By: s/Jacob Neuwirth
                                            ----------------------------------
                                        Name:
                                        Title:


                                        s/Yossi Avraham
                                        --------------------------------------
                                        ADV. YOSSI AVRAHAM AS TRUSTEE FOR
                                        MEIR GIVON


                                       61
<PAGE>

The  undersigned  hereby  agrees to fully and  unconditionally  guarantee in all
respects,  for the benefit of Data Systems & Software Inc. and Decision  Systems
Israel  Ltd.,  any and all  obligations  of payment or  performance  of Neuwirth
Investments Ltd. under this Agreement,  for a period of seven (7) years from the
date hereof.


                                        s/Jacob Neuwirth
                                        --------------------------------------
                                        JACOB NEUWIRTH (NOY)




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