Document:

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                                                                  Exhibit 4.(a)6

    Series C Preferred Stock Purchase Agreement dated as of October 30, 2002
              by and among NexVerse Networks, Inc., the Registrant
               and the other purchasers whose names are set forth
                       in Exhibit A to the said agreement.

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                             NexVerse Networks, Inc.

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT

                                OCTOBER 30, 2002

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                             Nexverse Networks, inc.

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES C PREFERRED STOCK PURCHASE  AGREEMENT (the  "Agreement") is
made and entered into as of October 30, 2002,  by and among  NEXVERSE  NETWORKS,
INC., a Delaware  corporation  (the  "Company"),  and each of those  persons and
entities,  severally and not jointly,  whose names are set forth on the Schedule
of  Purchasers  attached  hereto as Exhibit A (which  persons and  entities  are
hereinafter  collectively referred to as "Purchasers" and each individually as a
"Purchaser").

                                    Recitals

         WHEREAS,  the  Company is entering  into that  certain  Share  Exchange
Agreement by and among the Company,  ECI Telecom Ltd. ("ECI"), and ECI Telecom -
NGTS, Inc. of even date herewith (the "Exchange  Agreement"),  pursuant to which
the  Company  will  acquire  all of the  outstanding  capital  stock of  certain
subsidiaries  of ECI upon the  Closing,  as such term is defined in the Exchange
Agreement (the "Exchange Closing");

         WHEREAS,  the  Company  has  authorized  the  sale and  issuance  of an
aggregate of one hundred seventy four million eight hundred twenty five thousand
two hundred  (174,825,200) shares of its Series C Preferred Stock (the "Shares")
simultaneously with the Exchange Closing;

         WHEREAS,  upon  execution  hereof,  the Company and the  Purchasers are
placing the purchase price for the Shares sold in the initial  Closing and their
respective  signature pages to the Agreement and Related  Agreements (as defined
in Section 3.1 below) into escrow with the Bank of New York (the "Escrow Agent")
pursuant to that certain  Escrow  Agreement by and among the Escrow  Agent,  the
Purchasers and the Company of even date herewith in the form attached  hereto as
Exhibit H (the "Escrow Agreement");

         WHEREAS,  Purchasers  desire to  purchase  the  Shares on the terms and
conditions set forth herein; and

         WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein.

                                    Agreement

         NOW,  THEREFORE,  in  consideration  of the foregoing  recitals and the
mutual  promises,  representations,  warranties,  and covenants  hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

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      1. Agreement To Sell And Purchase.

         1.1  Authorization  of Shares.  The Company has authorized (a) the sale
and issuance of the Shares to the  Purchasers and (b) the issuance of the shares
of Common  Stock to be issued upon  conversion  of the Shares  (the  "Conversion
Shares").   The  Shares  and  the  Conversion   Shares  will  have  the  rights,
preferences,  privileges and  restrictions set forth in the Amended and Restated
Certificate  of  Incorporation  of the Company,  in the form attached  hereto as
Exhibit B (the "Restated Charter").

         1.2 Sale and Purchase.  Subject to the terms and conditions  hereof, at
the Closing (as hereinafter defined) the Company hereby agrees to issue and sell
to each  Purchaser,  severally  and not jointly,  and each  Purchaser  agrees to
purchase from the Company,  severally and not jointly,  the number of Shares set
forth  opposite  such  Purchaser's  name on Exhibit  A, at a  purchase  price of
seventeen and sixteen hundredths cents ($0.1716) per share.

      2. Closing, Delivery And Payment.

         2.1  Closing.  The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place at the offices of Cooley Godward
LLP, Five Palo Alto Square,  3000 El Camino Real, Palo Alto, CA, 94306-2155 upon
delivery of the Release  Instructions (as defined in the Escrow Agreement) or at
such other time or place as the Company and  Purchasers may mutually agree (such
date is hereinafter referred to as the "Closing Date").

         2.2  Delivery.  At the  Closing,  subject  to the terms and  conditions
hereof and of the Escrow Agreement, the Company will deliver to each Purchaser a
certificate  representing the number of Shares to be purchased at the Closing by
such  Purchaser,  and the Escrow Agent will  deliver the  purchase  price of the
Shares to the Company.

         2.3 Subsequent Sales of Shares.  At any time on or before the 120th day
after the Closing, the Company may sell up to the balance of the Shares not sold
at the Closing to such  persons as may be approved by the Board of  Directors of
the Company (the "Additional  Purchasers").  At any additional closings (each an
"Additional  Closing")  (i) All such  sales  made shall be made on the terms and
conditions set forth in this Agreement  (other than terms relating to the Escrow
Agreement),  (ii) the representations and warranties of the Company set forth in
Section 3 hereof (and the Schedule of Exceptions)  shall speak as of the date of
this  Agreement  and the  Company  shall have no  obligation  to update any such
disclosure,  and (iii) the  representations  and  warranties  of the  Additional
Purchasers in Section 4 hereof shall speak as of such  Additional  Closing.  The
Schedule  of  Purchasers  may be amended by the  Company  without the consent of
Purchasers  to  include  any  Additional  Purchasers.  Any  shares  of  Series C
Preferred Stock sold pursuant to this Section 2.3 shall be deemed to be "Shares"
for all purposes  under this  Agreement and any  Additional  Purchasers  thereof
shall be deemed to be "Purchasers" for all purposes under this Agreement.

      3. Representations And Warranties Of The Company.

         Except as set forth on a  Schedule  of  Exceptions  attached  hereto as
Exhibit  C,  delivered  by the  Company  to  Purchasers  before the date of this
Agreement,  the Company  hereby  represents  and warrants as of the date of this
Agreement to each Purchaser as set forth below.

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         3.1  Organization,  Good Standing and  Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of  Delaware.  The Company has all  requisite  corporate  power and
authority to own and operate its properties  and assets,  to execute and deliver
this Agreement,  the Amended and Restated  Investor Rights Agreement in the form
attached hereto as Exhibit D (the "Investor  Rights  Agreement") and the Amended
and  Restated  Voting  Agreement in the form  attached  hereto as Exhibit E (the
"Voting Agreement") (collectively,  the "Related Agreements"), to issue and sell
the Shares and the  Conversion  Shares,  and to carry out the provisions of this
Agreement,  the Related  Agreements and the Restated Charter and to carry on its
business as presently  conducted and as presently proposed to be conducted.  The
Company  is duly  qualified  and is  authorized  to do  business  and is in good
standing as a foreign  corporation in all  jurisdictions  in which the nature of
its  activities  and of its  properties  (both  owned  and  leased)  makes  such
qualification  necessary,  except for those jurisdictions in which failure to do
so would not have a material adverse effect on the Company or its business.

         3.2  Subsidiaries.  The  Company  does not own or  control  any  equity
security or other  interest of any other  corporation,  limited  partnership  or
other  business  entity.  The Company is not a participant in any joint venture,
partnership or similar  arrangement.  Since its  inception,  the Company has not
consolidated or merged with, acquired all or substantially all of the assets of,
or  acquired  the  stock  or  any  interest  in  any  corporation,  partnership,
association, or other business entity.

         3.3 Capitalization; Voting Rights

         (a) The  authorized  capital stock of the Company,  of the date hereof,
consists of (i)  sixty-five  million  (65,000,000)  shares of Common Stock,  par
value  $0.001 per share,  three  million  five hundred  sixteen  thousand  three
hundred seventy five (3,516,375) shares of which are issued and outstanding, and
(ii)  forty-six  million  four  hundred  seventy-four   thousand  seven  hundred
thirty-eight (46,474,738) shares of Preferred Stock, par value $0.001 per share,
twelve million nine hundred  seventy-four  thousand  seven hundred  thirty-eight
(12,974,738)  shares of which are designated  Series A Preferred  Stock,  all of
which are issued and outstanding and thirty-three  million five hundred thousand
(33,500,000)  shares of which are designated  Series B Preferred  Stock,  thirty
million (30,000,000) of which are issued and outstanding

         (b) The authorized  capital stock of the Company,  immediately prior to
the Closing, will consist of (i) four hundred fifty million (450,000,000) shares
of Common Stock, par value $0.001 per share, one hundred  seventeen  million two
hundred sixty six thousand one hundred forty eight (117,266,148) shares of which
will be issued and  outstanding,  and (ii) one hundred  ninety four million four
hundred  forty six thousand five hundred one  (194,446,501)  shares of Preferred
Stock, par value $0.001 per share,  Five million four hundred forty six thousand
five hundred (5,446,500) shares of which will be designated Series A-1 Preferred
Stock,  par value  $0.001 per share,  Five  million  four  hundred  twenty  five
thousand two hundred seven  (5,425,207) of which will be issued and outstanding;
one (1) share of which will be designated  Series A-2 Preferred Stock, par value
$0.001  per  share,  which  will not be issued  and  outstanding;  nine  million
(9,000,000)  shares of which will be designated  Series B-1 Preferred Stock, par
value  $0.001 per share,  all of which will be issued and  outstanding,  and one
hundred

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eighty  million  (180,000,000)  shares  of  which  will be  designated  Series C
Preferred  Stock,  par value $0.001 per share,  none of which will be issued and
outstanding.

         (c) As of the date hereof,  under the Company's  2001 Equity  Incentive
Plan (the "Plan"),  (i) twenty three thousand two hundred three (23,203)  shares
of  Common  Stock  have  been  issued  pursuant  to  restricted  stock  purchase
agreements and/or the exercise of outstanding options,  (ii) options to purchase
four  million six hundred  sixty  thousand  thirty three  (4,660,033)  shares of
Common  Stock have been  granted and are  currently  outstanding,  and (iii) two
million one hundred ninety thousand three hundred thirty six (2,190,336)  shares
of Common Stock remain  available  for future  issuance to officers,  directors,
employees and consultants of the Company.

         (d) Other than one hundred forty seven thousand five hundred  (147,500)
shares of Series B Preferred Stock reserved for issuance pursuant to outstanding
warrants  (which will be converted  into  warrants to purchase one hundred sixty
two thousand two hundred fifty  (162,250)  shares of Common Stock and twenty one
thousand one hundred thirty seven (21,137)  shares of Series A-1 Preferred Stock
automatically upon filing of the New Charter),  the shares reserved for issuance
under the Plan, and except as may be granted pursuant to the Exchange Agreement,
this Agreement and the Related  Agreements,  there are no  outstanding  options,
warrants,  rights (including conversion or preemptive rights and rights of first
refusal),  proxy or  stockholder  agreements,  or agreements of any kind for the
purchase or acquisition from the Company of any of its securities as of the date
hereof.

         (e) Immediately prior to the Closing,  other than one hundred sixty two
thousand  two  hundred  fifty  (162,250)  shares of Common  Stock and twenty one
thousand one hundred thirty seven (21,137)  shares of Series A-1 Preferred Stock
that will be reserved for issuance pursuant to outstanding warrants,  the shares
that will be reserved for issuance  under the Plan, and except as may be granted
pursuant to the Exchange  Agreement,  this Agreement and the Related Agreements,
there will be no outstanding options,  warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or stockholder agreements,
or  agreements of any kind for the purchase or  acquisition  from the Company of
any of its securities. At the Closing, all such preemptive rights will have been
properly waived or complied with respect to all prior issuances of capital stock
and with respect to the issuance of the Shares and Conversion Shares.

         (f) All issued and outstanding shares of the Company's Common Stock and
Preferred  Stock (i) have been duly  authorized and validly issued and are fully
paid and  nonassessable,  and (ii) were issued in compliance with all applicable
state and federal laws concerning the issuance of securities.

         (g) Effective as of the Closing, the debt obligations of the Company to
Comdisco,  Inc., Comerica Bank (California),  GATX Ventures,  Inc., and Dominion
Venture Finance L.L.C. will be restructured as set forth on Exhibit G.

         (h)  As  of  the  Closing,  the  rights,  preferences,  privileges  and
restrictions of the Shares will be as stated in the Restated Charter. Each share
of  Series  C  Preferred  Stock  will be  convertible  into  Common  Stock  on a
one-for-one basis as of the Closing. The Conversion

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Shares  have  been  duly and  validly  reserved  for  issuance.  When  issued in
compliance with the provisions of this Agreement and the Restated  Charter,  the
Shares  and the  Conversion  Shares  will be  validly  issued,  fully  paid  and
nonassessable,  and will be free of any liens or  encumbrances  other than liens
and encumbrances created by or imposed upon Purchasers;  provided, however, that
the Shares and the Conversion  Shares may be subject to restrictions on transfer
under state and/or federal  securities  laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.

         3.4  Authorization;  Binding  Obligations.  All corporate action on the
part of the Company, its officers,  directors and stockholders necessary for the
authorization of this Agreement and the Related  Agreements,  the performance of
all obligations of the Company  hereunder and thereunder and the  authorization,
sale,  issuance and delivery of the Shares  pursuant  hereto and the  Conversion
Shares pursuant to the Restated Charter has been taken, including valid approval
of the  Restated  Charter.  This  Agreement  and the  Related  Agreements,  when
executed and  delivered,  will be valid and binding  obligations  of the Company
enforceable in accordance with their terms,  except (a) as limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or other  laws of general
application  affecting  enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable  remedies,  and (c) to the
extent that the enforceability of the indemnification provisions in the Investor
Rights  Agreement may be limited by applicable  laws. The sale of the Shares and
the subsequent  conversion of the Shares into Conversion Shares are not and will
not be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.

         3.5  Financial  Statements.  The  Company  has made  available  to each
Purchaser  (a) its  audited  balance  sheet  as at June  30,  2002  and  audited
statement of income and cash flows for the period from the  Company's  inception
to June 30, 2002,  and (b) its unaudited  balance sheet as at September 30, 2002
(the "Statement Date") and unaudited  consolidated  statement of income and cash
flows for the three month period ending on the Statement Date (collectively, the
"Financial  Statements").  The  Financial  Statements,  together  with the notes
thereto,  have been prepared in accordance  with generally  accepted  accounting
principles  applied on a  consistent  basis  throughout  the periods  indicated,
except as disclosed  therein,  and present  fairly the  financial  condition and
position of the Company as of June 30, 2002 and the  Statement  Date;  provided,
however, that the unaudited financial statements are subject to normal recurring
year-end  audit  adjustments  (which  are not  expected  to be  material  either
individually  or in the  aggregate),  and do not contain all footnotes  required
under generally accepted accounting principles.

         3.6 Liabilities.  Other than as set forth in the Financial  Statements,
the Company has no material  liabilities and, to the best of its knowledge,  has
no material contingent  liabilities,  except current liabilities incurred in the
ordinary  course of business which have not been,  either in any individual case
or in the aggregate, materially adverse.

         3.7 Agreements; Action.

         (a) Except for agreements explicitly contemplated hereby and agreements
between the Company and its employees  with respect to the sale of the Company's
Common

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Stock pursuant to the Plan, there are no agreements,  understandings or proposed
transactions between the Company and any of its officers, directors,  employees,
affiliates or any affiliate thereof.

         (b) There are no agreements,  understandings,  instruments,  contracts,
proposed transactions,  judgments, orders, writs or decrees to which the Company
is a party or to its knowledge by which it is bound which may involve (i) future
obligations  (contingent or otherwise) of, or payments to, the Company in excess
of $25,000 (other than  obligations of, or payments to, the Company arising from
purchase or sale agreements entered into in the ordinary course of business), or
(ii) the  transfer or license of any patent,  copyright,  trade  secret or other
proprietary  right to or from the Company (other than licenses by the Company of
"off the shelf" or other standard  products),  or (iii)  indemnifications by the
Company,  including with respect to infringements  of proprietary  rights (other
than  indemnification   obligations  arising  from  purchase,  sale  or  license
agreements entered into in the ordinary course of business).

         (c) The  Company  has not  (i)  declared  or  paid  any  dividends,  or
authorized or made any distribution  upon or with respect to any class or series
of its capital  stock,  (ii) incurred or guaranteed any  indebtedness  for money
borrowed  or  any  other  liabilities  (other  than  with  respect  to  dividend
obligations,  distributions,  indebtedness and other obligations incurred in the
ordinary  course of business)  individually in excess of $25,000 or, in the case
of indebtedness and/or liabilities  individually less than $25,000, in excess of
$50,000 in the aggregate,  (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.

         (d)  For  the  purposes  of   subsections   (b)  and  (c)  above,   all
indebtedness,  liabilities, agreements,  understandings,  instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the  individual  minimum dollar amounts of
such subsections.

         3.8  Obligations  to Related  Parties.  There are no obligations of the
Company to officers, directors,  stockholders, or employees of the Company other
than (a) for payment of salary for  services  rendered,  (b)  reimbursement  for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee  benefits made generally  available to all employees  (including  stock
option agreements  outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or, to the best of
the Company's  knowledge,  key employees or  stockholders  of the Company or any
members of their  immediate  families,  is  indebted  to the  Company or has any
direct or indirect  ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship,  or
any firm or  corporation  which  competes  with the Company,  other than passive
investments  in publicly  traded  companies  (representing  less than 1% of such
company)  which  may  compete  with  the  Company.   No  officer,   director  or
stockholder,  or any  member  of  their  immediate  families,  is,  directly  or
indirectly,  interested in any material  contract  with the Company  (other than
such  contracts as relate to any such  person's  ownership  of capital  stock or
other securities of the Company).

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         3.9 Changes. Since the Statement Date, there has not been:

         (a) Any  change in the  assets,  liabilities,  financial  condition  or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business,  none of which  individually or
in the aggregate has had a material adverse effect on such assets,  liabilities,
financial condition or operations of the Company;

         (b) Any  resignation  or  termination  of any officer,  key employee or
group of employees of the Company;

         (c) Any material change in the contingent obligations of the Company by
way of guaranty, endorsement, indemnity, warranty or otherwise;

         (d)  Any  damage,  destruction  or  loss,  whether  or not  covered  by
insurance,  materially  and  adversely  affecting  the  properties,  business or
prospects or financial condition of the Company;

         (e) Any waiver by the Company of a valuable right or of a material debt
owed to it;

         (f) Any material  change in any  compensation  arrangement or agreement
with any employee, officer, director or stockholder;

         (g) Any labor organization activity related to the Company;

         (h) Any  sale,  assignment  or  transfer  of any  patents,  trademarks,
copyrights, trade secrets or other intangible assets;

         (i) Any change in any  agreement  to which the Company is a party or by
which it is bound which materially and adversely  affects the business,  assets,
liabilities, financial condition, operations or prospects of the Company;

         (j)  Any  other  event  or  condition  of any  character  that,  either
individually  or  cumulatively,   has  materially  and  adversely  affected  the
business, assets, liabilities, financial condition or operations of the Company;
or

         (k) Any  arrangement or commitment by the Company to do any of the acts
described in subsection (a) through (j) above.

         3.10 Title to Properties and Assets;  Liens,  Etc. The Company has good
and  marketable  title to its  properties  and  assets,  and  good  title to its
leasehold  estates,  in each case subject to no mortgage,  pledge,  lien, lease,
encumbrance or charge,  other than (a) those resulting from taxes which have not
yet become delinquent,  (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially  impair the
operations  of the  Company,  and (c) those  that have  otherwise  arisen in the
ordinary  course of  business.  The Company is in  compliance  with all material
terms of each lease to which it is a party or is otherwise bound.

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         3.11 Intellectual Property.

         (a) General.  The Company owns or possesses  sufficient legal rights to
all patents, trademarks,  service marks, trade names, copyrights, trade secrets,
licenses,  information and other proprietary rights and processes  ("Proprietary
Rights")  necessary for its business as now conducted and as presently  proposed
to be conducted.  Section  3.11(a) of the Schedule of Exceptions sets forth with
respect to the Proprietary Rights of the Company: (i) each trademark, trade name
or  service  mark,  whether or not  registered,  (ii) each  copyright  for which
registration  has been sought,  whether or not registered,  including the number
and  date of  registration  for  each  country  in  which a  copyright  has been
registered, (iii) for each patent which has been issued or invention for which a
patent application has been filed, whether or not issued, the number and date of
the application for each country in which a patent  application has been made or
a patent has been issued,  and (iv) for each mask work (if any),  whether or not
registered,  the date of first commercial  exploitation  and if registered,  the
registration  number and date of  registration.  True and correct  copies of all
Proprietary  Rights  (including all pending  applications,  application  related
documents and materials and written materials  relating to Trade Secrets) owned,
controlled  or used by or on behalf of the  Company or in which the  Company has
any interest whatsoever have been provided to the Investors.

         (b)  Adequacy.  The  Proprietary  Rights of the  Company  are all those
necessary  for the normal  conduct of the  business of the Company as  presently
conducted  and as presently  contemplated,  including  the design,  manufacture,
development and sale of all products  currently under  development,  planned for
development or in production.

         (c) Royalties and Licenses.  Except as set forth in Section  3.11(c) of
the Schedule of  Exceptions,  the Company has no obligation  to  compensate  any
person for the use of any of its Proprietary  Rights, the Company is not subject
to any license of Proprietary Rights other than shrink-wrap licenses nor has the
Company granted to any Person any license,  option or other rights to use in any
manner any of its Proprietary Rights, whether requiring the payment of royalties
or not.

         (d)  Ownership.  The  Company has a valid right to use or owns free and
clear of any encumbrance its Proprietary  Rights,  and such  Proprietary  Rights
will not cease to be valid  rights of the  Company  by reason of the  execution,
delivery and  performance  of this  Agreement or the Related  Agreements  or the
consummation of the transactions contemplated hereby or thereby.

         (e)  Absence of Claims.  The Company  (A) has not  received  any notice
alleging,  or  otherwise  has  knowledge  of  facts  that  might  give  rise to,
invalidity with respect to any of the Proprietary  Rights of the Company and (B)
has not received any notice of alleged  infringement of any rights of others due
to any activity by the Company.  To the knowledge of the Company,  the Company's
use of its Proprietary  Rights in its past,  current and planned products do not
and would not infringe  upon or otherwise  violate the valid rights of any third
party  anywhere in the world.  No other Person (i) has notified the Company that
it is claiming any ownership of or right to use any of the Company's Proprietary
Rights or (ii) to the  knowledge of the  Company,  is  infringing  upon any such
Proprietary Rights in any way.

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         3.12 Protection of Proprietary Rights. All of the pending  applications
for the  Company's  Proprietary  Rights  have  been  duly  filed  and all  other
customary  actions to protect  such  Proprietary  Rights  have been  taken.  The
Company has taken reasonable steps necessary or appropriate (including, entering
into appropriate  confidentiality  and  nondisclosure  agreements with officers,
directors, subcontractors,  employees, licensees and customers) to safeguard and
maintain the secrecy and  confidentiality of, and the proprietary rights in, the
Proprietary  Rights.  The  Company  is not  aware  of  any  breach  of any  such
confidentiality or nondisclosure agreement by any party thereto.

         3.13 Compliance with Other Instruments. The Company is not in violation
or  default  of any term of its  certificate  of  incorporation  or  Bylaws,  as
currently in effect,  or Restated  Charter or of any  provision of any mortgage,
indenture,  contract, agreement,  instrument or contract to which it is party or
by which it is bound or of any judgment,  decree,  order or writ. The execution,
delivery, and performance of and compliance with this Agreement, and the Related
Agreements,  and the issuance and sale of the Shares  pursuant hereto and of the
Conversion  Shares pursuant to the Restated  Charter,  will not, with or without
the passage of time or giving of notice, result in any such violation,  or be in
conflict  with or  constitute  a default  under any such term,  or result in the
creation of any mortgage,  pledge,  lien,  encumbrance or charge upon any of the
properties or assets of the Company or the suspension,  revocation,  impairment,
forfeiture  or  nonrenewal  of any permit,  license,  authorization  or approval
applicable  to the Company,  its business or  operations or any of its assets or
properties.  The Company has avoided every condition,  and has not performed any
act, the  occurrence  of which would result in the  Company's  loss of any right
granted under any license, distribution agreement or other agreement required to
be disclosed on the Schedule of Exceptions.

         3.14 Litigation.  There is no action, suit, proceeding or investigation
pending  or,  to the  Company's  knowledge,  currently  threatened  against  the
Company,  nor is the  Company  aware  that  there  is any  basis  for any of the
foregoing.  The foregoing includes,  without limitation,  actions pending or, to
the Company's knowledge, threatened involving the prior employment of any of the
Company's employees,  their use in connection with the Company's business of any
information  or  techniques  allegedly   proprietary  to  any  of  their  former
employers,  or their obligations under any agreements with prior employers.  The
Company  is not a party or to its  knowledge  subject to the  provisions  of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.  There is no action,  suit,  proceeding or investigation by the
Company currently pending or which the Company intends to initiate.

         3.15  Employees.  The Company has no collective  bargaining  agreements
with any of its employees.  There is no labor union organizing  activity pending
or, to the  Company's  knowledge,  threatened  with respect to the Company.  The
Company  is not a  party  to or  bound  by any  currently  effective  employment
contract, deferred compensation arrangement,  bonus plan, incentive plan, profit
sharing  plan,  retirement  agreement  or other  employee  compensation  plan or
agreement.  To the  Company's  knowledge,  no employee of the  Company,  nor any
consultant with whom the Company has contracted,  is in violation of any term of
any  employment  contract,   proprietary  information  agreement  or  any  other
agreement  relating to the right of any such individual to be employed by, or to
contract  with,  the  Company;  and to the  Company's  knowledge  the  continued
employment by the Company of its present  employees,  and the performance of the
Company's  contracts with its  independent  contractors,  will not result in any

<PAGE>

such  violation.  The Company has not received any notice alleging that any such
violation has occurred. No employee of the Company has been granted the right to
continued  employment by the Company or to any material  compensation  following
termination  of employment  with the Company.  The Company is not aware that any
officer,  key  employee or group of employees  intends to terminate  his, her or
their employment with the Company, nor does the Company have a present intention
to terminate the employment of any officer,  key employee or group of employees.
Each former  employee of the Company  has  entered  into an  agreement  with the
Company  providing for the full release of any claims against the Company or any
related party arising out of such employment.  There are no actions pending,  or
to the  Company's  knowledge,  currently  threatened,  by any  former or current
employee concerning such person's employment by the Company.

         3.16  Obligations of  Management.  Each officer and key employee of the
Company is currently  devoting  substantially all of his or her business time to
the conduct of the  business of the  Company.  The Company is not aware that any
officer or key  employee  of the Company is planning to work less than full time
at the Company in the future.  No officer or key employee is  currently  working
or, to the  Company's  knowledge,  plans to work for a  competitive  enterprise,
whether or not such  officer or key employee is or will be  compensated  by such
enterprise.

         3.17 Registration Rights and Voting Rights. Except as required pursuant
to the Investor Rights  Agreement by and among the Company and the Investors (as
defined  therein),  dated  November 27, 2001, the Company is presently not under
any  obligation,  and has not  granted any  rights,  to register  (as defined in
Section 1.1 of the Investor  Rights  Agreement)  any of the Company's  presently
outstanding securities or any of its securities that may hereafter be issued. To
the Company's  knowledge,  except as contemplated in the Voting Agreement by and
among the Company,  the Key Holders (as defined  therein) and the  Investors (as
defined  therein),  dated  November 27, 2001, no  stockholder of the Company has
entered into any  agreement  with respect to the voting of equity  securities of
the Company.

         3.18 Compliance with Laws;  Permits.  To its knowledge,  the Company is
not  in  violation  of  any  applicable  statute,  rule,  regulation,  order  or
restriction  of any domestic or foreign  government  or any  instrumentality  or
agency thereof in respect of the conduct of its business or the ownership of its
properties  which violation would  materially and adversely affect the business,
assets,  liabilities,  financial  condition,  operations  or  prospects  of  the
Company. No domestic governmental orders,  permissions,  consents,  approvals or
authorizations  are required to be obtained and no registrations or declarations
are required to be filed in  connection  with the execution and delivery of this
Agreement or the issuance of the Shares or the Conversion Shares, except such as
have been duly and  validly  obtained or filed,  or with  respect to any filings
that must be made after the Closing,  as will be filed in a timely  manner.  The
Company  has  all  franchises,  permits,  licenses  and  any  similar  authority
necessary for the conduct of its business as now being conducted by it, the lack
of which  could  materially  and  adversely  affect  the  business,  properties,
prospects  or  financial  condition  of the Company and  believes it can obtain,
without  undue burden or expense,  any similar  authority for the conduct of its
business as planned to be conducted.

<PAGE>

         3.19 Offering Valid.  Assuming the accuracy of the  representations and
warranties of Purchasers  contained in Section 4.2 hereof,  the offer,  sale and
issuance  of the  Shares  and the  Conversion  Shares  will be  exempt  from the
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities  Act"),  and will have been  registered  or qualified (or are exempt
from  registration  and  qualification)   under  the  registration,   permit  or
qualification  requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has  solicited or will solicit any offers to
sell or has  offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such  Shares by the  Company
within the registration provisions of the Securities Act or any state securities
laws.

         3.20 Full Disclosure.  The Company has provided each Purchaser with all
information  requested  by each  Purchaser  in  connection  with its decision to
purchase  the Shares.  This  Agreement,  including  the  schedules  and exhibits
hereto,  does not contain any untrue  statement  of a material  fact nor omit to
state a material fact necessary in order to make the statements contained herein
not misleading.

         3.21 Minute  Books.  The minute books of the Company made  available to
Purchasers  contain  a  complete  summary  of  all  meetings  of  directors  and
stockholders since the time of incorporation.

         3.22 Real  Property  Holding  Corporation.  The  Company  is not a real
property holding  corporation  within the meaning of Code Section  897(c)(2) and
any regulations promulgated thereunder.

         3.23 Insurance. The Company has general commercial,  product liability,
fire and casualty  insurance  policies  with  coverage  customary  for companies
similarly situated to the Company.

      4. Representations And Warranties Of Purchasers.

         Each Purchaser hereby represents and warrants to the Company, severally
and not jointly,  as follows (provided that such  representations and warranties
do not lessen or obviate the  representations  and warranties of the Company set
forth in this Agreement):

         4.1 Requisite  Power and Authority.  Purchaser has all necessary  power
and authority to execute and deliver this  Agreement and the Related  Agreements
and to carry out their  provisions.  All action on Purchaser's part required for
the lawful  execution and delivery of this Agreement and the Related  Agreements
has been taken.  Upon their  execution  and  delivery,  this  Agreement  and the
Related  Agreements  will  be  valid  and  binding   obligations  of  Purchaser,
enforceable in accordance with their terms,  except (a) as limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or other  laws of general
application  affecting  enforcement  of  creditors'  rights,  (b) as  limited by
general  principles  of equity  that  restrict  the  availability  of  equitable
remedies,  and (c) to the extent that the enforceability of the  indemnification
provisions of the Investor Rights Agreement may be limited by applicable laws.

         4.2 Investment Representations.  Purchaser understands that neither the
Shares nor the Conversion  Shares have been registered under the Securities Act.
Purchaser also

<PAGE>

understands  that the Shares are being offered and sold pursuant to an exemption
from registration contained in the Securities Act based in part upon Purchaser's
representations  contained in this Agreement.  Purchaser  hereby  represents and
warrants as follows:

         (a) Purchaser Bears Economic Risk. Purchaser has substantial experience
in evaluating and investing in private  placement  transactions of securities in
companies  similar to the Company so that it is capable of evaluating the merits
and risks of its  investment  in the Company and has the capacity to protect its
own  interests.  Purchaser  must  bear  the  economic  risk of  this  investment
indefinitely  unless  the  Shares  (or the  Conversion  Shares)  are  registered
pursuant to the Securities Act, or an exemption from  registration is available.
Purchaser  understands that the Company has no present  intention of registering
the Shares,  the Conversion Shares or any shares of its Common Stock.  Purchaser
also understands that there is no assurance that any exemption from registration
under the  Securities  Act will be available and that,  even if available,  such
exemption  may not allow  Purchaser to transfer all or any portion of the Shares
or the Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.

         (b) Acquisition for Own Account.  Purchaser is acquiring the Shares and
the Conversion  Shares for Purchaser's own account for investment  only, and not
with a view towards their distribution.

         (c) Purchaser Can Protect Its Interest.  Purchaser  represents  that by
reason  of  its,  or of its  management's,  business  or  financial  experience,
Purchaser has the capacity to protect its own  interests in connection  with the
transactions  contemplated  in  this  Agreement,  and  the  Related  Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in this Agreement.

         (d) Accredited Investor.  Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

         (e) Company  Information.  Purchaser has had an  opportunity to discuss
the  Company's  business,  management  and  financial  affairs  with  directors,
officers and management of the Company and has had the opportunity to review the
Company's  operations and facilities.  Purchaser has also had the opportunity to
ask  questions  of and receive  answers  from,  the  Company and its  management
regarding the terms and conditions of this investment.

         (f) Rule 144. Purchaser  acknowledges and agrees that the Shares,  and,
if issued, the Conversion Shares are "restricted  securities" as defined in Rule
144 promulgated under the Securities Act as in effect from time to time and must
be  held  indefinitely  unless  they  are  subsequently   registered  under  the
Securities Act or an exemption from such  registration  is available.  Purchaser
has been  advised  or is aware of the  provisions  of Rule  144,  which  permits
limited  resale  of  shares  purchased  in a private  placement  subject  to the
satisfaction  of  certain  conditions,   including,   among  other  things:  the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144 and the number of
shares  being  sold  during  any  three-month  period  not  exceeding  specified
limitations.

<PAGE>

         (g) Residence. If Purchaser is an individual, then Purchaser resides in
the state or  province  identified  in the  address  of  Purchaser  set forth on
Exhibit A; if Purchaser is a partnership, corporation, limited liability company
or other entity, then the office or offices of Purchaser in which its investment
decision was made is located at the address or addresses of Purchaser  set forth
on Exhibit A.

         (h) Foreign  Investors.  If Purchaser is not a United States person (as
defined  by  Section  7701(a)(30)  of the  Internal  Revenue  Code of  1986,  as
amended),  Purchaser  hereby  represents that it has satisfied  itself as to the
full  observance  of the  laws  of  its  jurisdiction  in  connection  with  any
invitation to subscribe for the Shares or any use of this  Agreement,  including
(i) the legal  requirements  within its  jurisdiction  for the  purchase  of the
Shares,  (ii) any foreign  exchange  restrictions  applicable to such  purchase,
(iii) any  government or other  consents that may need to be obtained,  and (iv)
the income tax and other tax  consequences,  if any, that may be relevant to the
purchase,  holding,  redemption,  sale or transfer  of the  Shares.  Purchaser's
subscription  and payment for and continued  beneficial  ownership of the Shares
will  not  violate  any  applicable  securities  or  other  laws of  Purchaser's
jurisdiction.

         4.3 Transfer Restrictions.  Each Purchaser acknowledges and agrees that
the Shares and, if issued,  the Conversion Shares are subject to restrictions on
transfer as set forth in the Investor Rights Agreement.

      5. Conditions To Execution of this Agreement.

         5.1 Conditions to Purchasers' Execution of this Agreement.  Purchasers'
execution of this Agreement is subject to the  satisfaction,  at or prior to the
date hereof, of the following conditions:

         (a)  Representations  and Warranties True;  Performance of Obligations.
The  representations  and warranties made by the Company in Section 3 hereof are
true and  correct in all  material  respects  (except  for  representations  and
warranties subject to "materiality"  qualifiers,  which shall be true,  complete
and correct in all  respects) as of the date hereof,  and the Company shall have
performed all  obligations  and  conditions  herein  required to be performed or
observed by it on or prior to the date hereof.

         (b) Corporate Documents. The Company shall have delivered to Purchasers
or their counsel, copies of all corporate documents of the Company as Purchasers
shall reasonably request.

         (c)  Investor  Rights   Agreement.   The  Investor   Rights   Agreement
substantially  in the form attached hereto as Exhibit D shall have been executed
and delivered by the Purchasers and delivered to the Escrow Agent.

         (d) Voting  Agreement.  The Voting Agreement  substantially in the form
attached  hereto as  Exhibit E shall have been  executed  and  delivered  by the
Purchasers and certain other parties thereto and delivered to the Escrow Agent.

<PAGE>

         (e) Reservation of Conversion  Shares.  The Conversion  Shares issuable
upon  conversion of the Shares shall have been duly  authorized and reserved for
issuance upon such conversion.

         (f) Board of  Directors.  The Board of Directors  of the Company  shall
have  authorized  that,  upon the Closing,  the authorized  size of the Board of
Directors of the Company  shall be nine  members and the Board shall  consist of
Promod Haque, Tal Simchony,  Morgan Jones, Pascal Levensohn,  Amit Chawla, Giora
Bitan, Barak Hachamov, and two (2) vacancies.

         (g) Proceedings and Documents.  All corporate and other  proceedings in
connection  with  the  transactions  contemplated  as of the  execution  of this
Agreement and all documents and instruments  incident to such execution shall be
reasonably  satisfactory  in substance and form to Purchasers  and their special
counsel,  and Purchasers and their special  counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

         (h) Proprietary  Information and Inventions Agreement.  The Company and
each of its  employees  shall have entered into the  Company's  standard form of
Proprietary  Information and Inventions  Agreement,  in  substantially  the form
delivered to counsel for the Purchasers.

         (i) Minimum  Investment.  The amount of money placed into escrow by the
Purchasers as of the date hereof for release upon satisfaction of the conditions
set  forth  in  Section  7  below  shall  be at  least  twenty  million  dollars
($20,000,000).

         (j) Exchange Agreement. The Exchange Agreement shall have been executed
and delivered by the parties thereto.

         5.2  Conditions  to  Execution of this  Agreement  by the Company.  The
Company's  execution  of this  Agreement is subject to the  satisfaction,  on or
prior to the date hereof, of the following conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties in Section 4 made by those Purchasers  acquiring Shares hereunder are
true and correct in all material respects at the date of the date hereof.

         (b)  Performance of Obligations.  Such Purchasers  shall have performed
and complied with all agreements and conditions  herein required to be performed
or complied with by such Purchasers on or before date hereof.

         (c)  Investor  Rights   Agreement.   The  Investor   Rights   Agreement
substantially  in the form attached hereto as Exhibit D shall have been executed
and delivered by the parties thereto and delivered to the Escrow Agent.

         (d) Voting  Agreement.  The Voting Agreement  substantially in the form
attached  hereto as  Exhibit E shall have been  executed  and  delivered  by the
parties thereto and delivered to the Escrow Agent.

<PAGE>

         (e) Exchange Agreement. The Exchange Agreement shall have been executed
and delivered by the parties thereto

         (f) Minimum  Investment.  The amount of money placed into escrow by the
Purchasers as of the date hereof for release upon satisfaction of the conditions
set  forth  in  Section  7  below  shall  be at  least  twenty  million  dollars
($20,000,000).

      6. Closing Deliverables.

         The Company shall  deliver the following to the  Purchasers at or prior
to the Closing:

         6.1 Filing of Restated Charter.  The Restated Charter as filed with the
Secretary of State of the State of Delaware  shall  continue to be in full force
and effect on the Closing Date.

         6.2  Corporate  Documents.  Copies of all  corporate  documents  of the
Company as Purchasers or their counsel shall reasonably request.

         6.3 Compliance Certificate.  A Compliance Certificate,  executed by the
Chief  Executive  Officer of the Company,  dated the Closing Date, to the effect
that the  conditions  specified  in  subsections  (a) and (e) of Section 5.1 and
subsections (b) and (d) of Section 7.1 have been satisfied.

         6.4  Secretary's   Certificate.   A  certificate   from  the  Company's
Secretary,  a having attached  thereto (i) the Company's  Restated Charter as in
effect at the time of the Closing, (ii) the Company's Bylaws as in effect at the
time of the  Closing,  (iii)  resolutions  approved  by the  Board of  Directors
authorizing the transactions  contemplated  hereby, (iv) resolutions approved by
the Company's  stockholders  authorizing the filing of the Restated Charter, and
(v) good standing certificates (including tax good standing) with respect to the
Company  from  the   applicable   authority(ies)   in  Delaware  and  any  other
jurisdiction  in which the Company is qualified  to do business,  dated a recent
date before the Closing.

         6.5 Board of Directors.  Proper  authorization  that, upon the Closing,
the  authorized  size of the Board of  Directors  of the  Company  shall be nine
members and the Board shall consist of Promod Haque, Tal Simchony, Morgan Jones,
Pascal  Levensohn,  Amit  Chawla,  Giora  Bitan,  Barak  Hachamov,  and  two (2)
vacancies.

         6.6 Proceedings and Documents.  All corporate and other  proceedings in
connection with the transactions contemplated at the Closing hereby and delivery
of all  documents  and  instruments  incident  to  such  transactions  shall  be
reasonably  satisfactory  in substance and form to Purchasers  and their special
counsel,  and Purchasers and their special  counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

<PAGE>

         7.  Conditions To Closing.  The Purchasers and the Company will deliver
their respective Release Instructions to the Escrow Agent and effect the Closing
upon the satisfaction or waiver of the following conditions:

         7.1 Conditions to Purchasers'  Obligations at the Closing.  Purchasers'
obligations  to purchase  the Shares at the  initial  Closing are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:

         (a)  Representations  and Warranties True;  Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof shall
have been true and correct in all material respects (except for  representations
and warranties subject to "materiality" qualifiers,  which shall have been true,
complete and correct in all respects) as of the date of this Agreement.

         (b) Filing of Restated  Charter.  The Restated  Charter shall have been
accepted for filing by the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing Date.

         (c)  Acquisition.  The conditions  for the Exchange  Closing shall have
been satisfied or waived by the parties to the Exchange Agreement.

         (d) Consents, Permits, and Waivers. The Company shall have obtained any
and all consents,  permits and waivers necessary or appropriate for consummation
of the  transactions  contemplated by this Agreement and the Related  Agreements
(including  any filing  required to comply with the Hart Scott Rodino  Antitrust
Improvements  Act of  1976,  and  except  for such as may be  properly  obtained
subsequent to the Closing).

         (e) Legal Opinion. Legal counsel to the Company shall have delivered an
opinion  addressed  to  the  Purchasers,  dated  as  of  the  Closing  Date,  in
substantially the form attached hereto as Exhibit F.

         7.2 Conditions to Obligations of the Company.  The Company's obligation
to  issue,  sell and  deliver  the  Shares at each  Closing  is  subject  to the
satisfaction, on or prior to such Closing, of the following conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties  in Section 4 made by those  Purchasers  acquiring  Shares  hereunder
shall be true and correct in all material respects as of the date hereof.

         (b) Filing of Restated  Charter.  The Restated  Charter shall have been
accepted for filing by the Secretary of State of the State of Delaware.

         (c)  Acquisition.  The conditions  for the Exchange  Closing shall have
been satisfied or waived by the parties to the Exchange Agreement.

<PAGE>

         (d) Consents,  Permits, and Waivers. The Company shall have obtained of
any  and  all  consents,  permits  and  waivers  necessary  or  appropriate  for
consummation of the transactions  contemplated by this Agreement and the Related
Agreements  (including any filing  required to comply with the Hart Scott Rodino
Antitrust  Improvements  Act of 1976,  and  except  for such as may be  properly
obtained subsequent to the Closing).

         8.  Termination  Prior to Closing.  This Agreement  shall be terminated
prior to Closing upon the termination of the Exchange  Agreement pursuant to the
terms thereof. In the event of such termination, the obligations and liabilities
of all  parties  pursuant  to this  Agreement  shall be of no  further  force or
effect.

         9. Miscellaneous.

         9.1 Governing Law. This Agreement  shall be governed in all respects by
the laws of the State of  California  as such  laws are  applied  to  agreements
between California residents entered into and performed entirely in California.

         9.2 Survival. The representations, warranties, covenants and agreements
made  herein  shall  survive any  investigation  made by any  Purchaser  and the
closing of the transactions  contemplated  hereby.  All statements as to factual
matters  contained in any  certificate  or other  instrument  delivered by or on
behalf of the  Company  pursuant  hereto  in  connection  with the  transactions
contemplated  hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

         9.3  Successors  and Assigns.  Except as otherwise  expressly  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors,  assigns,  heirs,  executors and  administrators  of the
parties  hereto and shall  inure to the  benefit of and be  enforceable  by each
person who shall be a holder of the Shares from time to time.

         9.4 Entire  Agreement.  This  Agreement,  the  exhibits  and  schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire  understanding  and agreement between the parties
with regard to the subjects  hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.

         9.5  Severability.  In case any  provision of this  Agreement  shall be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

         9.6 Amendment and Waiver.

         (a) Except as otherwise provided for in Section 2.3, this Agreement may
be amended or modified only upon the written  consent of the Company and holders
of at least a majority of the then  outstanding  Shares (treated as if converted
and including any Conversion Shares into which the then outstanding  Shares have
been converted that have not been sold to the public).

<PAGE>

         (b) The obligations of the Company and the rights of the holders of the
Shares and the  Conversion  Shares under this  Agreement may be waived only with
the  written  consent  of the  holders  of at  least  a  majority  of  the  then
outstanding  Shares (treated as if converted and including any Conversion Shares
into which the then  outstanding  Shares have been  converted that have not been
sold to the public).

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

         9.8 Waiver of Conflicts. Each party to this Agreement acknowledges that
Cooley Godward LLP ("Cooley  Godward"),  outside general counsel to the Company,
has in the past  performed  and is or may now or in the future  represent one or
more  Purchasers or their  affiliates in matters  unrelated to the  transactions
contemplated by this Agreement (the  "Financing"),  including  representation of
such  Purchasers  or their  affiliates  in  matters  of a similar  nature to the
Financing.  The applicable  rules of  professional  conduct  require that Cooley
Godward  inform the parties  hereunder of this  representation  and obtain their
consent.  Cooley has served as outside  general  counsel to the  Company and has
negotiated the terms of the Financing solely on behalf of the Company. It is the
belief of Cooley  Godward  that these terms and  conditions  represent  an arm's
length  transaction  between the Company and  Purchasers.  Purchasers  have been
represented by independent  legal counsel  regarding the terms of the Financing.
The  Company and each  Purchaser  hereby (a)  acknowledge  that they have had an
opportunity  to  ask  for  and  have  obtained   information  relevant  to  such
representation,  including  disclosure  of the  reasonably  foreseeable  adverse
consequences of such  representation;  (b) acknowledge  that with respect to the
Financing,  Cooley  Godward  has  represented  solely the  Company,  and not any
Purchaser  or any  stockholder,  director  or  employee  of the  Company  or any
Purchaser; and (c) gives its informed consent to Cooley Godward's representation
of the Company in the Financing.

         9.9 Notices.  All notices  required or permitted  hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be  notified,  (b) when sent by  confirmed  electronic  mail,  telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt  requested,  postage prepaid,  or (d) one (1) day
after deposit with a nationally  recognized  overnight courier,  specifying next
day delivery,  with written verification of receipt. All communications shall be
sent to the Company at the address as set forth on the signature page hereof and
to Purchaser at the address set forth on Exhibit A,  attached

<PAGE>

hereto or at such other  address or  electronic  mail  address as the Company or
Purchaser  may  designate by ten (10) days advance  written  notice to the other
parties hereto.

         9.10  Expenses.  Each party shall bear all costs and  expenses  that it
incurs with respect to the negotiation,  execution,  delivery and performance of
this Agreement.

         9.11  Attorneys'  Fees.  In the  event  that  any  suit  or  action  is
instituted to enforce any provision in this Agreement,  the prevailing  party in
such dispute shall be entitled to recover from the losing party all fees,  costs
and  expenses  of  enforcing  any right of such  prevailing  party under or with
respect to this Agreement,  including without  limitation,  such reasonable fees
and  expenses  of  attorneys  and  accountants,  which  shall  include,  without
limitation, all fees, costs and expenses of appeals.

         9.12 Titles and Subtitles.  The titles of the sections and  subsections
of this  Agreement  are for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

         9.13  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument.

         9.14 Broker's Fees.  Each party hereto  represents and warrants that no
agent,  broker,  investment banker,  person or firm acting on behalf of or under
the  authority  of such party  hereto is or will be entitled to any  broker's or
finder's fee or any other  commission  directly or indirectly in connection with
the  transactions  contemplated  herein.  Each party  hereto  further  agrees to
indemnify each other party for any claims,  losses or expenses  incurred by such
other party as a result of the representation in this Section 6.14 being untrue.

         9.15 Exculpation Among Purchasers.  Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company and
its officers and  directors,  in making its  investment or decision to invest in
the  Company.  Each  Purchaser  agrees  that no  Purchaser  nor  the  respective
controlling persons, officers, directors,  partners, agents, or employees of any
Purchaser  shall be liable to any other  Purchaser for any action  heretofore or
hereafter  taken or  omitted to be taken by any of them in  connection  with the
Shares and Conversion Shares.

         9.16  Pronouns.  All  pronouns  contained  herein,  and any  variations
thereof,  shall be  deemed  to  refer to the  masculine,  feminine  or  neutral,
singular or plural, as to the identity of the parties hereto may require.

         9.17  California  Corporate  Securities Law. THE SALE OF THE SECURITIES
WHICH  ARE THE  SUBJECT  OF THIS  AGREEMENT  HAS NOT  BEEN  QUALIFIED  WITH  THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE  CONSIDERATION  THEREFOR
PRIOR  TO  SUCH  QUALIFICATION  OR IN THE  ABSENCE  OF AN  EXEMPTION  FROM  SUCH
QUALIFICATION  IS UNLAWFUL.  PRIOR TO  ACCEPTANCE OF SUCH  CONSIDERATION  BY THE
COMPANY,  THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY  CONDITIONED
UPON SUCH  QUALIFICATION  BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE..

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

COMPANY:

NEXVERSE NETWORKS, INC.

By: /s/ Amit Chawla
    ------------------------------
    Amit Chawla, Chief Executive Officer

Address: 926 Rock Ave.
         San Jose, CA  95131

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  ECI TELECOM LTD.

                                  Signature: /s/ Doron Inbar
                                             ---------------------------------

                                  Print Name: Doron Inbar
                                              --------------------------------

                                  Title: Chief Executive Officer
                                         -------------------------------------

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  STAR BAY TECHNOLOGY VENTURES IV, L.P.

                                  By Levensohn Capital Partners II LLC,
                                  its General Partner
                                  By Levensohn Capital Management, LLC
                                  its Managing Member

                                  By: /s/ Pascal Levensohn
                                      ---------------------------------
                                      Pascal Levensohn, President

                                  STAR BAY PARTNERS, L.P. (ROLLOVER FUND)

                                  By APH Capital Management LLC,
                                  its General Partner
                                  By Levensohn Capital Management, LLC
                                  its Managing Member

                                  By: /s/ Pascal Levensohn
                                      ---------------------------------
                                      Pascal Levensohn, President

                                  STAR BAY ASSOCIATES FUND, L.P.

                                  By Levensohn Capital Management, LLC
                                  its General Partner

                                  By: /s/ Pascal Levensohn
                                      ---------------------------------
                                      Pascal Levensohn, President

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  BATTERY VENTURES V, L.P.

                                  By: Battery Partners V, LLC
                                      General Partner

                                  /s/ Morgan M. Jones
                                  ---------------------------------
                                  Name: Morgan M. Jones
                                  Title: Member Manager

                                  BATTERY VENTURES CONVERGENCE FUND, L.P.

                                  By: Battery Convergence Partners, LLC
                                      General Partner

                                  /s/ Morgan M. Jones
                                  ---------------------------------
                                  Name: Morgan M. Jones
                                  Title: Member Manager

                                  BATTERY INVESTMENT PARTNERS V, LLC

                                  /s/ Morgan M. Jones
                                  ---------------------------------
                                  Name:  Morgan M. Jones
                                  Title: Member Manager

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  NORWEST VENTURE PARTNERS IX, L.P.

                                  By: Genesis VC Partners IX, LLC

                                  /s/ Promod Haque
                                  ---------------------------------
                                  Name: Promod Haque
                                  Title: Managing Director

                                  NVP ENTREPRENEURS FUND IX, L.P.

                                  By: Genesis VC Partners IX, LLC

                                  /s/ Promod Haque
                                  ---------------------------------
                                  Name: Promod Haque
                                  Title: Managing Director

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  KPCB HOLDINGS, INC., AS NOMINEE

                                  Signature: /s/ signature illegible
                                             ---------------------------------

                                  Print Name:
                                              --------------------------------

                                  Title:
                                         -------------------------------------

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  hereto have  executed  the SERIES C
PREFERRED  STOCK  PURCHASE  AGREEMENT  as of the  date set  forth  in the  first
paragraph hereof.

                                  LIBERTY MUTUAL INSURANCE COMPANY

                                  Signature: /s/ Ronald D. Ulich
                                             ---------------------------------
                                  Name:  Ronald D. Ulich
                                         -------------------------------------
                                  Title: Vice President
                                         -------------------------------------

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                              PAGE
                                                                                                              ----
<C>                                                                                                             <C>
1.       Agreement To Sell And Purchase..........................................................................2

         1.1      Authorization of Shares........................................................................2

         1.2      Sale and Purchase..............................................................................2

2.       Closing, Delivery And Payment...........................................................................2

         2.1      Closing........................................................................................2

         2.2      Delivery.......................................................................................2

         2.3      Subsequent Sales of Shares.....................................................................2

3.       Representations And Warranties Of The Company...........................................................3

         3.1      Organization, Good Standing and Qualification..................................................3

         3.2      Subsidiaries...................................................................................3

         3.3      Capitalization; Voting Rights..................................................................3

         3.4      Authorization; Binding Obligations.............................................................5

         3.5      Financial Statements...........................................................................5

         3.6      Liabilities....................................................................................6

         3.7      Agreements; Action.............................................................................6

         3.8      Obligations to Related Parties.................................................................6

         3.9      Changes........................................................................................7

         3.10     Title to Properties and Assets; Liens, Etc.....................................................8

         3.11     Intellectual Property..........................................................................8

         3.12     Protection of Proprietary Rights...............................................................9

         3.13     Compliance with Other Instruments..............................................................9

         3.14     Litigation.....................................................................................9

         3.15     Employees.....................................................................................10

         3.16     Obligations of Management.....................................................................10

         3.17     Registration Rights and Voting Rights.........................................................10

         3.18     Compliance with Laws; Permits.................................................................10

         3.19     Offering Valid................................................................................11

         3.20     Full Disclosure...............................................................................11

         3.21     Minute Books..................................................................................11

         3.22     Real Property Holding Corporation.............................................................11
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<CAPTION>
<S>      <C>                                                                                                   <C>
         3.23     Insurance.....................................................................................11

4.       Representations And Warranties Of Purchasers...........................................................12

         4.1      Requisite Power and Authority.................................................................12

         4.2      Investment Representations....................................................................12

         4.3      Transfer Restrictions.........................................................................13

5.       Conditions To Execution of this Agreement..............................................................13

         5.1      Conditions to Purchasers' Execution of this Agreement.........................................13

         5.2      Conditions to Execution of this Agreement by the Company......................................15

6.       Closing Deliverables...................................................................................15

         6.1      Filing of Restated Charter....................................................................15

         6.2      Corporate Documents...........................................................................15

         6.3      Compliance Certificate........................................................................15

         6.4      Secretary's Certificate.......................................................................16

         6.5      Board of Directors............................................................................16

         6.6      Proceedings and Documents.....................................................................16

7.       Conditions To Closing..................................................................................16

         7.1      Conditions to Purchasers' Obligations at the Closing..........................................16

         7.2      Conditions to Obligations of the Company......................................................17

8.       Termination Prior to Closing...........................................................................17

9.       Miscellaneous..........................................................................................17

         9.1      Governing Law.................................................................................17

         9.2      Survival......................................................................................17

         9.3      Successors and Assigns........................................................................18

         9.4      Entire Agreement..............................................................................18

         9.5      Severability..................................................................................18

         9.6      Amendment and Waiver..........................................................................18

         9.7      Delays or Omissions...........................................................................18

         9.8      Waiver of Conflicts...........................................................................18

         9.9      Notices.......................................................................................19

         9.10     Expenses......................................................................................19

         9.11     Attorneys' Fees...............................................................................19

         9.12     Titles and Subtitles..........................................................................19

         9.13     Counterparts..................................................................................19
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>
<S>      <C>                                                                                                   <C>
         9.14     Broker's Fees.................................................................................20

         9.15     Exculpation Among Purchasers..................................................................20

         9.16     Pronouns......................................................................................20

         9.17     California Corporate Securities Law...........................................................20
</TABLE>

                                     -iii-

<PAGE>

                                           List Of Exhibits

Schedule of Purchasers                                                 Exhibit A

Amended and Restated Certificate of Incorporation                      Exhibit B

Schedule of Exceptions                                                 Exhibit C

Investor Rights Agreement                                              Exhibit D

Voting Agreement                                                       Exhibit E

Form of Legal Opinion                                                  Exhibit F

Debt Obligations                                                       Exhibit G

Form of Escrow Agreement                                               Exhibit H

<PAGE>

                                    Exhibit A

                             SCHEDULE OF PURCHASERS

<TABLE>
<CAPTION>
                                                                                           AGGREGATE
                   NAME AND ADDRESS                           SHARES                     PURCHASE PRICE
                   ----------------                           ------                     --------------
<S>                                                         <C>                          <C>
ECI TELECOM, LTD.
       30 Hasivim Street                                   58,275,059                       $10,000,000.12
       Petah Tikva,  49133
       Israel

STAR BAY TECHNOLOGY VENTURES IV, L.P.
       333 Bush, Suite 2580                                 4,816,409                          $826,495.87
       San Francisco, CA  94104
       Attn: Pascal Levensohn
       Fax: 415 217-4727
       Telephone:  415 217-4710
       E-mail: Pascal@levcap.com

STAR BAY PARTNERS, L.P. (ROLLOVER FUND)
       333 Bush, Suite 2580                                 8,297,101                        $1,423,782.51
       San Francisco, CA  94104
       Attn: Pascal Levensohn
       Fax: 415 217-4727
       Telephone:  415 217-4710
       E-mail: Pascal@levcap.com

STAR BAY ASSOCIATES FUND, L.P.
       333 Bush, Suite 2580                                   289,753                           $49,721.62
       San Francisco, CA  94104
       Attn: Pascal Levensohn
       Fax: 415 217-4727
       Telephone:  415 217-4710
       E-mail: Pascal@levcap.com
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                                         <C>                              <C>
LIBERTY MUTUAL INSURANCE COMPANY
       Investments, 9A                                      18,065,269                       $3,100,000.16
       175 Berkeley Street
       Boston, MA  02117
       Attn:  Charles Farber

BATTERY VENTURES V, L. P.
       20 William Street, Suite 200                         23,620,512                       $4,053,279.86
       Wellesley, MA 02481
       Attn: Morgan Jones

BATTERY VENTURES CONVERGENCE FUND, L. P.
       20 William Street, Suite 200                          1,507,695                         $258,720.46
       Wellesley, MA 02481
       Attn: Morgan Jones

BATTERY INVESTMENT PARTNERS V, LLC
       20 William Street, Suite 200                            512,819                          $87,999.74
       Wellesley, MA 02481
       Attn: Morgan Jones
NORWEST VENTURE PARTNERS IX, L.P.
       525 University Avenue                                23,819,189                       $4,087,372.83
       Suite 800
       Palo Alto, CA 94301-1922
       Attn: Promod Haque
NVP ENTREPRENEURS FUND IX, L.P.
       525 University Avenue                                   656,336                         $112,627.26
       Suite 800
       Palo Alto, CA 94301-1922
       Attn: Promod Haque
KPCB HOLDINGS, INC.
       2750 Sand Hill Road                                     582,750                          $99,999.90
       Menlo Park, CA 94025
       Attn: Matt Murphy

TOTAL:                                                     140,442,892                      $24,100,000.26
                                                           ===========                      ==============
</TABLE>Exhibit 4.(a)7

     Asset Purchase Agreement dated February 13, 2003, among Alvarion Ltd.,
             InnoWave ECI Wireless Systems Ltd. and the Registrant.

<PAGE>

                            ASSET PURCHASE AGREEMENT

                                     among:

                                  ALVARION LTD.

                                       and

                       INNOWAVE ECI WIRELESS SYSTEMS LTD.

                                       and

                                ECI TELECOM LTD.

<PAGE>

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE  AGREEMENT  (this  "Agreement") is made and entered
into as of February  17,  2003,  by and among:  ALVARION  LTD.  ("Alvarion"),  a
company  organized under the laws of the State of Israel;  INNOWAVE ECI WIRELESS
SYSTEMS LTD. (the "Company"), a company organized under the laws of the State of
Israel;  and ECI TELECOM LTD. ("ECI"), a company organized under the laws of the
State of Israel. Certain capitalized terms used in this Agreement are defined in
Exhibit A.

                                    RECITALS

         A. The Company is engaged in the design,  development,  production  and
sale of point-to-multipoint wireless systems (the "Business"), and its principal
place of business is at 4 Hashiloach St., Petach Tikva, Israel.

         B. ECI owns substantially all of the issued and outstanding  securities
of the Company.

         C.  Alvarion  wishes to purchase and acquire from the Company,  and the
Company wishes to sell,  assign and transfer to Alvarion,  certain assets of the
Company  relating to the Business,  upon the terms and subject to the conditions
herein set forth.

         D.   The   Company,   ECI  and   Alvarion   desire   to  make   certain
representations,  warranties and covenants in connection  with the  transactions
contemplated hereby.

         E.  This  Agreement  has been  approved  by the  respective  boards  of
directors of the Company, Alvarion and ECI.

                                    AGREEMENT

         The parties to this Agreement agree as follows:

SECTION 1. DESCRIPTION OF TRANSACTION.

         1.1      Assets to be Transferred.

         Subject to the terms and conditions of this  Agreement,  on the Closing
Date, the Company shall sell, transfer,  assign, convey and deliver to Alvarion,
and Alvarion shall purchase from the Company,  all right,  title and interest in
all of the assets used to conduct the Business,  other than the Excluded  Assets
(the "Purchased Assets").

         The  Purchased  Assets  shall  include,  but  not be  limited  to,  the
following:

         (a) Current Assets.  All cash, cash  equivalents,  short-term  accounts
receivable  (other  than as set forth in Section  1.2(f)) of the Company and all
other current  assets of the Company as of the Closing Date, as set forth in the
Pro-forma Report, as defined in Section 2.4 (the "Current Assets").

         (aa) Long Term Accounts  Receivable.  All long term accounts receivable
of the Company as of the Closing Date, as set forth in the Pro-forma Report (the
"Long Term Accounts Receivable").

         (b)  Leased  Real  Property.  All of the leases of real  property  with
respect to real property leased by the Company in Omer and in Petach Tikva.

         (c) Personal  Property.  All  machinery,  equipment,  vehicles,  tools,
supplies,  spare parts,  furniture and all other personal  property  (other than
personal  property  leased  pursuant to personal  property leases as hereinafter
defined)  owned,  utilized or held for use by the Company and  required  for the
operation of the Business.

                                       3
<PAGE>

         (d) Inventory.  All inventories of raw materials,  work-in-process  and
finished goods  (including  all such in transit),  and service and repair parts,
supplies and components,  together with related packaging  materials,  as of the
Closing Date (collectively the "Inventory").

         (e)  Personal  Property  Leases.  All leases of  machinery,  equipment,
vehicles, furniture and other personal property leased by the Company.

         (f)  Intellectual   Property.   The  Company's   Intellectual  Property
including,  without limitation, the Intellectual Property identified in Part 2.9
of the Disclosure Schedule.

         (g)  Contracts.  All the Company's  rights in, to and under all written
contracts  (including sales contracts),  purchase orders and sales orders of the
Company listed in Schedule  1.1(g)  (hereinafter  "Assumed  Contracts").  To the
extent that any Assumed  Contract for which  assignment  to Alvarion is provided
herein,  is not assignable  without the consent of another party, this Agreement
shall not  constitute an assignment or an attempted  assignment  thereof if such
assignment  or  attempted  assignment  would  constitute a breach  thereof.  The
Company,  ECI and  Alvarion  agree to use their  reasonable  commercial  efforts
(without  any  requirement  on the part of Alvarion to pay any money or agree to
any  material  change in the terms of any such  Assumed  Contract) to obtain the
consent of such other party to the  assignment  of any such Assumed  Contract to
Alvarion,  in all cases in which  such  consent is or may be  required  for such
assignment. If any such consent shall not be obtained, ECI and the Company agree
to cooperate with Alvarion in any reasonable  arrangement (including by way of a
back-to-back  arrangement  pursuant  to which the  Company or ECI shall act as a
conduit for Alvarion)  designed to provide for Alvarion the benefits intended to
be  assigned  to  Alvarion  under  the  relevant  Assumed  Contract,   including
enforcement at the cost and for the account of Alvarion of any and all rights of
the  Company  against  the other  party  thereto  arising  out of the  breach or
cancellation  thereof  by  such  other  party  or  otherwise;   Alvarion  hereby
undertakes  to  assist  ECI and  the  Company  in the  performance  of any  such
arrangement.  If and  to the  extent  that  such  arrangement  cannot  be  made,
Alvarion,  upon notice to the Company,  shall have no obligation with respect to
any such Assumed  Contract and any such Assumed  Contract shall not be deemed to
be a Purchased Asset hereunder.  Notwithstanding  the foregoing,  the receipt of
all  consents  necessary to assign to Alvarion  the Assumed  Contracts  that are
indicated with an asterisk on Schedule  1.1(g) (where such consent is required),
will be a condition to Alvarion's obligation to effect the Closing.

         (h)  Subsidiaries.  All  outstanding  securities  of the  Subsidiaries,
excluding  InnoWave Do Brazil  Ltda.  (hereafter,  the "Brazil  Sub") unless and
until  Alvarion's  assumption of the Supply  Agreement  under Section 5.7(b) and
excluding InnoWave Broadband, Inc.

         (i) Records and Files.  All  existing  records and files of the Company
pertaining to the Business including, without limitation, invoices, customer and
vendor lists and Contracts, blueprints,  specifications,  designs, drawings, and
operating and marketing plans, and all other documents,  tapes, discs,  programs
or other embodiments of information of the Company.

         (j) Licenses; Permits. All licenses, permits, approvals, certifications
and listings of the Company necessary to operate the Business.

         (k) Corporate  Name.  The names  "InnoWave"  and "InnoWave ECI Wireless
Systems" or any derivatives thereof and all rights to use or allow others to use

                                       4
<PAGE>

such  names;  provided,  however  that  the  name  "ECI"  shall  only be used as
necessary to enable  Alvarion to operate the Business and utilize the  Purchased
Assets.

         (l)  General  Intangibles.  All  prepaid  items,  all  causes of action
arising out of  occurrences  before or after the Closing,  and other  intangible
rights and assets  relating to the Business,  including title to the goodwill of
the Business.

         (m) Approved  Enterprise  Status. The Company's  "approved  enterprise"
status with the Investment  Center of the Israeli Ministry of Industry and Trade
(the "Investment Center"),  with respect to the Company's plant in Omer, and all
rights and obligations  associated  therewith,  pursuant to a specific  Approval
Certificate  (Ktav  Ishur)  relating  to such  plant that will be granted by the
Investment  Center, the terms of which shall be approved by Alvarion at its sole
discretion.

         1.2 Excluded Assets.

         The  provisions of Section 1.1  notwithstanding,  the Company shall not
sell,  transfer,  assign,  convey or deliver to Alvarion,  and Alvarion will not
purchase  or accept,  the  following  assets of the  Company  (collectively  the
"Excluded Assets"):

         (a)  Consideration.  The  consideration  delivered  by  Alvarion to the
Company pursuant to this Agreement.

         (b) Employment Agreements. The Company's employment agreements with any
and all of its employees.

         (c) Corporate  Franchise.  The Company's franchise to be a corporation,
its Articles of Association  and Memorandum of Association  and other  corporate
records. Alvarion shall have reasonable access to such books and records and may
make excerpts therefrom and copies thereof.

         (d) Approved  Enterprise  Status. The Company's  "approved  enterprise"
status  with the  Investment  Center  pursuant  the first  approval  (Ktav Ishur
Tochnit Aleph) dated June 2, 1997.

         (e) The  Company's  rights and  obligations  pursuant to the Supply and
Services  Agreement between the Company and Global Village Telecom Ltda. ("GVT")
dated May 27, 2000 (the "Supply  Agreement")  and the subsequent  correspondence
between  the  Company  and GVT,  and all other  agreements  entered  into by the
Company or Innowave do Brazil  Ltda.  and GVT or by ECI and GVT with  respect to
the Products  (collectively  with the Supply Agreement,  the "GVT  Agreements"),
unless and until  Alvarion's  assumption of the Supply  Agreement  under Section
5.7(b) hereof.

         (f) Tax  Refunds.  The  Company's  right to any  refund  payable by any
Government  Authority  in respect of payments  (including,  inter alia,  VAT and
custom  duties) made by the Company to such  Government  Authority  prior to the
Closing.

         (g) U.S. Subsidiary Debt. Any debts owed by InnoWave Broadband, Inc. to
the Company.

         1.3      Liabilities to be Assumed

         Subject to the terms and conditions of this  Agreement,  on the Closing
Date,  Alvarion  shall assume and agree to perform and discharge the  following,
and only the following,  liabilities of the Company  (collectively  the "Assumed
Liabilities"):

                                       5
<PAGE>

         (a)  Contractual  Liabilities.  The  Company's  liabilities  arising or
required to be  performed  from and after the Closing Date under and pursuant to
all Assumed Contracts.

         (b) Liabilities Under Permits and Licenses.  The Company's  liabilities
arising from and after the Closing  Date under any permits or licenses  assigned
to Alvarion at the Closing pursuant to Section 1.1(j).

         (c) Accounts  Payable.  The  Accounts  Payable of the Company as of the
Closing Date, as set forth in the Pro-forma Report (the "Accounts Payable").

         (d)  Product   Warranty.   The  Company's   existing  product  warranty
obligations arising out of any Assumed Contract.

         (e)  The  Company's   liabilities  set  forth  in  Section   2.4(f)(i),
2.4(f)(ii),  2.4(f)(iii),  2.4(f)(iv),  2.4(f)(vi),  2.4(f)(viii)  and the  open
purchase orders listed in Part 2.20(a) of the Disclosure Schedule, to the extent
set forth therein.

         (f) Any  other  liabilities  set  forth in Part  2.5 of the  Disclosure
Schedule.

         (g) The  obligation  to use  Sanmina-SCI  Systems  Israel Ltd.  ("SCI")
through  2005 for  ninety  percent  (90%) of the volume of the  procurement  and
assembly of the Business'  modules  (excluding  modules already not manufactured
for the  Business in SCI);  provided  that (i) a different  manufacturer  may be
used, in Israel or abroad, for such components or services,  if after good faith
negotiations  with  SCI,  the  commercial  terms  that SCI  finally  offers  are
materially less attractive than those offered by such other  manufacturer,  (ii)
if a  tender  or a sale is  conditioned  upon  the  agreement  to  perform  such
manufacturing  services outside Israel,  then with respect to that project there
shall be no requirement to use SCI (and manufacturing for such project shall not
be taken into account for purposes of calculating  the 90% requirement set forth
above), and (iii) such manufacturing  obligation will apply only with respect to
a rate of Products'  sales of up to $7.5 million  (excluding  sales described in
(ii) above) per quarter.

         1.4 Liabilities Not to be Assumed.

         Except as and to the  extent  specifically  set forth in  Section  1.3,
Alvarion is not assuming any Liabilities of the Company and all such liabilities
shall  be  and  remain  the   responsibility   of  the  Company  (the  "Retained
Liabilities"). Without limiting the generality of the foregoing, Alvarion is not
assuming and the Company shall not be deemed to have transferred to Alvarion the
following Retained Liabilities of the Company:

         (a) Taxes Arising from  Transaction.  Any taxes  applicable to, imposed
upon or arising out of the sale or transfer of the Purchased  Assets to Alvarion
and the other  transactions  contemplated by this  Agreement,  including but not
limited to any income, transfer, sales, use, gross receipts or documentary stamp
taxes.

         (b) Taxes. Any Tax Liability  relating to the Business or the Purchased
Assets with respect to the period prior to the Closing.

         (c) Insured Claims.  Any Liability of the Company insured  against,  to
the extent such Liability is, will or could be paid by an insurer.

         (d)  Litigation  Matters.  Any  Liability  with  respect  to any  Legal
Proceedings  against  the  Company  or any  Subsidiary  by any  third  party and
relating to the

                                       6
<PAGE>

period prior to the Closing  Date,  whether or not described in Part 2.19 of the
Disclosure  Schedule  (unless  the  assumption  of  such  Legal  Proceedings  is
explicitly set forth therein).

         (e)  Infringements.  Any Liability to a third party for infringement of
such third  party's  intellectual  property  relating to the period prior to the
Closing.

         (f) Transaction  Expenses.  All Liabilities  incurred by the Company or
ECI in connection with this Agreement and the transactions contemplated hereby.

         (g) Liability For Breach.  Liabilities of the Company or any Subsidiary
for any  breach  or  failure  to  perform  any of the  Company's  covenants  and
agreements  contained in, or made pursuant to, this Agreement,  or, prior to the
Closing, any other Contract, whether or not assumed hereunder,  including breach
arising from assignment of Assumed Contracts  hereunder without consent of third
parties.

         (h)  Liabilities  to  Affiliates.  Liabilities  of the  Company  or any
Subsidiary to its present or former Affiliates.

         (j)  Violation  of Laws or Orders.  Liabilities  of the  Company or any
Subsidiary  for any  violation  of or failure to comply with any  statute,  law,
ordinance, rule or regulation or any order, writ, injunction,  judgment, plan or
decree of any  Governmental  Body  relating  to the period  prior to the Closing
Date.

         (k) Liabilities Relating to Employees.  Liabilities with respect to the
Company's  current or former  employees,  prior to or through the Closing  Date,
including all Liabilities associated with the termination of such employees (all
of which will be paid and  settled by the  Company as set forth in Section  5.3)
and  including  the  employees  employed by ECI that  provide  services  for the
Company,   but  excluding   liabilities   arising  exclusively  from  Alvarion's
employment of any such persons on or following the Closing Date.

         (l) Other  Liabilities.  Any and all Liabilities that are not expressly
assumed by Alvarion in Section 1.3 hereto.

         1.5  Purchase  and Sale.  The closing of the  purchase  and sale of the
Purchased  Assets (the  "Closing")  shall take place at the offices of Naschitz,
Brandes & Co., 5 Tuval Street,  Tel Aviv,  Israel at 10:00 a.m., or on such date
which is not later than five (5) business  days  following the date on which all
the conditions  set forth in Sections 6 and 7 have been satisfied or waived,  or
on such  other  date,  time and place as the  parties  may  mutually  agree (the
"Closing  Date").  At the Closing the Company  shall  deliver to Alvarion one or
more instruments  representing the Purchased Assets,  and Alvarion shall (i) pay
the Company an amount of $9.1 million plus the  applicable  value added tax; and
(ii) issue to the Company or its designees the Warrants (as defined below).  The
cash payment made by Alvarion on the Closing Date shall be made by wire transfer
of immediately  available funds to the bank account  specified by the Company in
writing to Alvarion at least two (2) business days prior to the Closing Date.

         1.6 Further Assurances.  If, at any time after the Closing Date, either
party shall consider or be advised that any deeds, bills of sale, assignments or
assurances or any other acts or things are  reasonably  necessary,  desirable or
proper (a) to vest, perfect or confirm, of record or otherwise, in Alvarion, its
right to, and title or interest in, the  Purchased  Assets,  or (b) otherwise to
carry out the purposes of this  Agreement,  such party shall so advise the other
parties in writing,  and the other parties  thereupon shall execute and deliver,
all such deeds, bills of sale,  assignments and assurances and do all such other
acts and things reasonably

                                       7
<PAGE>

necessary,  desirable or proper to vest,  perfect or confirm  Alvarion's  right,
title or interest in, to or under the  Purchased  Assets and  otherwise to carry
out the purposes of this Agreement.

         1.7  Purchase  Consideration.   The  aggregate  consideration  for  the
Purchased Assets (the "Purchase  Consideration")  shall be (i) an amount in cash
equal to $9.1  million  (plus the  applicable  value added tax),  payable to the
Company in accordance with the provisions of this  Agreement;  and (ii) warrants
to purchase  200,000  Ordinary  Shares of Alvarion,  nominal value NIS 0.01 each
(the  "Ordinary  Shares")  at an  exercise  price per share  equal to $3.00 (the
"Warrants").  The form of warrants to be issued in connection  with the Warrants
is attached hereto as Annex 1.7.

         1.8 ECI Waiver. ECI and all of its Affiliates hereby waive and release,
effective  as of the  Closing,  any and all rights,  claims and causes of action
assertable  against  any  purchaser  of the  Business  or the  Purchased  Assets
relating to the Purchased Assets or to the Business.  Except as specifically set
forth  in  this  Agreement,  any and all  agreements  between  ECI or any of its
Affiliates  and the Company that relate to the Purchased  Assets or the Business
shall automatically terminate as of the Closing Date.

         1.9 Sole Consideration.  The Purchase Consideration paid to the Company
as set forth above shall be the sole compensation and sole  consideration to the
Company  in respect of the  Purchased  Assets.  The  Purchase  Consideration  is
inclusive of any and all applicable  taxes, and any and all such taxes including
but not limited to personal income tax,  corporate tax,  National  Insurance and
healthcare tax in respect of such consideration shall be paid by the Company.

         1.10  Assignment  of  Alvarion's  Rights and  Obligations.  Any and all
rights  and  obligations  of  Alvarion   pursuant  to  this  Agreement  and  the
transactions  contemplated  hereby may be assigned by Alvarion to a wholly owned
subsidiary  of  Alvarion,  provided  such  assignment  (a) has no  impact on the
fulfillment  of  Alvarion's  obligations  hereunder,  and (b) does  not  hinder,
directly or indirectly, any rights the Company or ECI may have pursuant hereto.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ECI.

         ECI and the Company,  jointly and severally,  hereby make the following
representations  and warranties to and for the benefit of the Indemnitees,  each
of which is true and correct on the date hereof and shall be correct and true as
of the Closing Date, and shall survive the Closing of the transactions  provided
for herein.  For purposes of this Section 2 (excluding  Section  2.3),  the term
"Company" shall refer to the Company and to each of the Subsidiaries (as defined
below), mutatis mutandis.

         2.1 Organization and Qualification; Subsidiaries.

         (a) The Company is duly organized,  validly existing and (to the extent
such concept exists under the laws of its jurisdiction of  incorporation)  is in
good  standing  under  the  laws of the  jurisdiction  of its  incorporation  or
organization and has all requisite power and authority to own, lease and operate
its properties and to carry on its businesses as now being conducted.

         (b) The Company has not conducted any business under or otherwise used,
for any purpose or in any jurisdiction, any fictitious name, assumed name, trade
name or

                                       8
<PAGE>

other name, other than the names "Innowave ECI Wireless Systems Ltd.", "Innowave
Tadiran Telecommunications  Wireless Systems Ltd." and "Tadiran Telecom Wireless
Ltd."  (and,  with  respect  to the  Subsidiaries,  "Innowave  Do Brasil  Ltda."
"InnoWave  Broadband,   Inc.",   "Kermadec  Holdings  B.V.",   "InnoWave  Telsiz
Sistemleri Ticaret A.S.", "Winnet Metropolitan  Communications  Systems,  Inc.",
"Tadipol ECI Ltd." and "Tadipol Sp. Zoo").

         (c) Except as set forth in Part 2.1(c) of the Disclosure Schedule,  the
Company is not and has not been required to be qualified, authorized, registered
or licensed to do business as a foreign corporation in any jurisdiction,  except
where the failure to be so  qualified,  authorized,  registered or licensed will
not have a Material Adverse Effect on the Business.

         (d) Part 2.1(d) of the Disclosure  Schedule  accurately  sets forth (i)
the names of the members of the Company's board of directors,  (ii) the names of
the members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.

         (e) Part 2.1(e) of the Disclosure  Schedule sets forth the names of the
Company's subsidiaries (the "Subsidiaries"). Other than as listed in Part 2.1(e)
of the Disclosure Schedule, the Company does not own any controlling interest in
any Entity.  The Company is not  obligated to make any future  investment  in or
capital  contribution  to any  Subsidiary  or any  Entity.  The  Company  is not
responsible  or liable for any  obligation of any Entity in which it owns or has
owned any equity interest.  The shares of each Subsidiary which are owned by the
Company  are free and  clear of any  Lien and free of any  other  limitation  or
restriction.  Except as set forth in Part 2.3 of the Disclosure Schedule,  there
are no outstanding  (i) securities of the Company or any Subsidiary  convertible
into or exchangeable  for share capital or voting  securities of any Subsidiary,
or (ii) options,  preemptive  rights,  refusal rights or other rights to acquire
from the Company or any  Subsidiary,  or other  obligation of the Company or any
Subsidiary,  to issue, sell or transfer any share capital,  voting securities or
securities  convertible  into  or  exchangeable  for  share  capital  or  voting
securities of any Subsidiary.

         2.2 Articles of Association and Memorandum of Association; Records. The
Company has  delivered  to Alvarion  accurate  and  complete  copies of: (1) the
Memorandum of Association and Articles of Association  (or similar  documents of
another jurisdiction) of the Company,  including all amendments thereto; (2) the
stock  records of the  Company;  and (3) the  minutes  and other  records of the
meetings and other  proceedings  (including any actions taken by written consent
or otherwise without a meeting) of the shareholders of the Company, the board of
directors  of the Company and all  committees  of the board of  directors of the
Company.  There  have  been no  formal  meetings  or  other  proceedings  of the
shareholders  of the  Company,  the board of  directors  of the  Company  or any
committee of the board of directors of the Company that are not fully  reflected
in such minutes or other records. There has not been any violation of any of the
provisions  of  the  Company's   Articles  of   Association   or  Memorandum  of
Association,  nor has the Company taken any action that is inconsistent with any
resolution  adopted  by the  Company's  shareholders,  the  Company's  board  of
directors or any committee of the Company's board of directors, which would have
a Material Adverse Effect on the Company.  The books of account,  stock records,
minute  books and other  records of the Company  are  accurate,  up-to-date  and
complete in all material  respects,  and have been maintained in accordance with
prudent business practices.

         2.3 Capitalization.

                                       9
<PAGE>

         (a) The authorized  share capital of the Company  immediately  prior to
the Closing shall be NIS 1,000,000 consisting of 100,000,000 Ordinary Shares NIS
0.01  nominal  value per  share,  of which  52,903,353  shares  are  issued  and
outstanding.

         (b) At the Closing Date,  the issued and  outstanding  share capital of
the  Company,   on  a  fully  diluted  and  as-converted   basis,   taking  into
consideration all convertible or exchangeable  securities and other interests in
the Company, is allocated as set forth in Part 2.3 of the Disclosure Schedule.

         (c) Except as set forth in Part 2.3 of the Disclosure Schedule,  at the
Closing Date,  there will not be any  outstanding  or authorized  subscriptions,
options,  warrants, calls, rights,  commitments,  convertible securities, or any
other agreements of any character directly or indirectly  obligating the Company
to  issue  any  additional  shares  or  any  securities   convertible  into,  or
exchangeable  for, or evidencing  the right to subscribe  for, any shares of the
Company.

         (d) At the Closing Date,  there will not be any  outstanding  rights or
obligations of the Company or any of its  Subsidiaries to repurchase,  redeem or
otherwise acquire any securities of the Company or of a Subsidiary.

         2.4 Financial Statements.

         (a)  The  Company  has   furnished   Alvarion   with  a  draft  of  its
consolidated,  United States  Dollar-denominated  financial statements as of and
for the year ended  December 31, 2002 (one version  applying FAS 144 and another
version not  applying  FAS 144),  copies of which are attached as Part 2.4(a) of
the Disclosure  Schedule (the "Draft Financial  Statements").  In addition,  the
Company  shall have  furnished  Alvarion,  prior to the Closing  Date,  with its
audited, consolidated,  United States Dollar-denominated financial statements in
accordance  with U.S.  GAAP, as of and for the year ended December 31, 2002 (the
"Audited  Financial  Statements"  and,  collectively  with the  Draft  Financial
Statements,  the "Financial Statements").  The Audited Financial Statements will
be identical in all material  respects to the Draft Financial  Statements except
with respect to FAS 144 adjustments.

         (b) Without derogating from the provisions of Section 2.4(a) above, the
Financial  Statements  are accurate  and  complete in all material  respects and
present  fairly and  accurately  the financial  position,  assets,  liabilities,
results of  operation  and cash flow of the Company as of the date  thereof,  in
accordance with U.S. GAAP,  consistently applied in the United States throughout
the periods covered.

         (c) The total amount of Current Assets,  Long Term Accounts  Receivable
and  Inventory as of the Closing  Date,  shall be equal to or exceed the Assumed
Liabilities,  as jointly  determined  by the Company's  auditors and  Alvarion's
auditors and (i) as reflected in the Company  pro-forma  balance sheet as of the
Closing Date to be prepared in accordance  with U.S. GAAP (adjusted so as not to
apply FAS 144) and  provided to Alvarion 5 business  days prior to Closing  Date
(the "Draft Pro-forma  Report") and attached hereto as Schedule  2.4(c),  as per
Section 6.7 below;  and (ii) as reflected in the audited balance sheet as of the
Closing Date to be prepared in accordance  with U.S. GAAP (adjusted so as not to
apply FAS 144), to be jointly approved by such auditors within 30 days following
the Closing Date (the "Final Pro-forma Report").

                                       10
<PAGE>

         (d) All proper and necessary books of account,  minute books, registers
and records have been  maintained  by the  Company,  are in its  possession  and
contain accurate information relating to all material  transactions to which the
Company has been a party or which relate to the Purchased  Assets,  except where
the  failure to maintain  such books of account,  minute  books,  registers  and
records would not have a Material Adverse Effect on the Company.

         (e) A complete list of the Company's current debts and outstanding loan
facilities  as of the date hereof is set forth in Part 2.4(e) of the  Disclosure
Schedule,  excluding  debts  owed by the  Company  to ECI and debts  owed to the
Company by its  Subsidiaries  (all of which  related  party  debts  shall not be
assumed by Alvarion).

         (f)  Except  as  incurred  in the  ordinary  course  of  business  (and
disclosed  to  Alvarion)  and as set forth  below,  the  Company has no material
liabilities or obligations of any kind, whether accrued, absolute or contingent,
asserted or unasserted,  whether or not such  liabilities  or obligations  would
have been  required to be disclosed in the Financial  Statements,  in accordance
with U.S. GAAP, and there is no existing  condition,  situation or circumstance,
known to ECI or the  Company,  which could  reasonably  be expected to result in
such liability,  except as set forth in the Financial  Statements or in Part 2.5
of the Disclosure Schedule:

               (i) Reserved;

               (ii) The  Company's  obligation  under its lease  agreement  with
Sasson Hugi dated March 3, 1998 and all amendments  thereto,  which  obligations
may be terminated, without further costs, by no later than July 31, 2003;

               (iii) The Company's  obligations under the Company's  outsourcing
services  agreement with Electronic Data Systems (E.D.S) Israel Ltd. ("EDS", and
the "EDS  Agreement",  respectively),  which is  terminable  at any time  upon a
nine-month  prior written notice and the payment of penalty equal to two months'
fee, as more fully set forth therein;

               (iv) The Company's obligation to pay royalties on future sales to
the Israeli  Office of Chief  Scientist  (with  respect to which all amounts due
with  respect to sales prior to the Closing  Date,  shall have been duly paid or
recorded properly and reserved in the Financial Statements);

               (v) The Company's tax liabilities;

               (vi)  Performance  bonds  detailed  in  Part  2.4(f)(vi)  of  the
Disclosure Schedule,  issued by the Company to the Company's  customers,  in the
aggregate  amount  US$3,748,000  (including  the  replacement  of  ECI on a $0.9
million  performance  bond  issued  for  the  Company's  Turkish  project)  (the
"Performance Bonds"); which, to the Company's and ECI's best knowledge, will not
be realized by the customers; and

               (vii)  The  Company's  obligations  pursuant  to its  Supply  and
Services  Agreement with GVT dated May 27, 2000, the material terms of which are
summarized in part 2.4(f)(vii) of the Disclosure Schedule.

               (viii) The  Company's  contingent  liabilities  specified in Part
2.4(f)(viii) of the Disclosure Schedule.

                                       11
<PAGE>

         2.5  Absence  of  Changes.  Except  as set  forth  in  Part  2.5 of the
Disclosure Schedule or in Section 2.4(f) above, since December 31, 2002:

         (a) There has not been any  material  adverse  change in the  Company's
business,  operations,  assets,  liabilities,  debts,  work force or  conditions
(financial  or  otherwise)  and no  event  has  occurred  that  will,  or  could
reasonably be expected to, have a Material  Adverse Effect on the Company or the
Purchased Assets;

         (b) Reserved;

         (c) The  Company  has not  declared,  accrued,  set  aside  or paid any
dividend or made any other distribution in respect of any of its securities, and
has not repurchased, redeemed or otherwise reacquired any securities;

         (d) The Company has not sold,  issued or authorized the issuance of (i)
any  shares or other  securities  of the  Company,  (ii) any  option or right to
acquire  any  shares  or any  other  securities  of the  Company,  or (iii)  any
instrument  convertible  into or exchangeable for any shares or other securities
of the Company;

         (e)  There  has  been  no  amendment  to  the  Company's   Articles  of
Association, and the Company has not effected or been a party to any Acquisition
Transaction, recapitalization,  reclassification of shares, share split, reverse
share split or similar transaction;

         (f) The Company has not formed any  subsidiary  or acquired  any equity
interest or other  interest in any other Entity,  other than the  acquisition of
all of the issued and outstanding shares of Kermadec Holdings B.V.;

         (g) The  Company  has not made any  expenditures  on  fixed  assets  or
equipment, which exceeds $50,000;

         (h) The Company has not (i) entered into or permitted any of the assets
owned or used by it to become bound by any Contract that is or would  constitute
a  Material  Agreement  (as  defined  in  Section  2.10(a)),   (ii)  amended  or
prematurely  terminated,  or waived any material right or remedy under, any such
contract, or (iii) has entered into any commitment or transaction, other than in
the ordinary course of business consistent with past practice;

         (i) The Company has not (i)  acquired,  leased or licensed any right or
other asset from any other person, (ii) sold or otherwise disposed of, or leased
or licensed,  any right or other asset to any other  person,  or (iii) waived or
relinquished any right,  except for immaterial rights or other immaterial assets
acquired, leased, licensed or disposed of in the ordinary course of business and
consistent with the Company's past practices;

         (j) The Company or ECI do not know of any reason the Company would have
to write off as  uncollectible,  or  establish  any  extraordinary  reserve with
respect to, any account  receivable or other  indebtedness,  which  collectively
would be material;

         (k)  The  Company  has  not  pledged  any of its  assets  or  otherwise
permitted  any of its assets to become  subject to any  Encumbrance,  except for
pledges of immaterial assets made in the ordinary course of business;

                                       12
<PAGE>

         (l) The  Company  has not (i) lent  money  to any  Person  (other  than
pursuant to routine  advances not in excess of $10,000,  made to any employee in
the  ordinary   course  of  business),   or  (ii)  incurred  or  guaranteed  any
indebtedness for borrowed money;

         (m) Reserved;

         (n) Reserved;

         (o) The Company has not  changed  any of its methods of  accounting  or
accounting practices in any respect;

         (p) The Company has not commenced or settled any Legal Proceeding;

         (q) The Company has not entered into any transaction or taken any other
action  outside the ordinary  course of business or  inconsistent  with its past
practices;

         (r) There has not been any termination,  cancellation,  or acceleration
or indication to that effect of any right or obligation of the Company or a loss
of any  benefit to which the  Company is  entitled  under any  provision  of any
Material Agreement; and

         (s) The Company has not agreed or  committed to take any of the actions
referred to in clauses "(c)" through "(r)" above.

         2.6  Properties and Assets.  Full and accurate  details of the tangible
assets of the Company as of December  31, 2002 are  contained in Part 2.6 of the
Disclosure Schedule.  Except as disclosed in Part 2.6 of the Disclosure Schedule
or in the notes to the Financial Statements, the Company has good and marketable
title to the Purchased Assets,  including without  limitation those reflected in
the Financial Statements, free and clear of any right, interest or equity of any
individual  or entity  (including  any  right to  acquire,  option,  or right of
preemption) or any mortgage,  charge, pledge, lien, or assignment,  or any other
encumbrance or security  interest or arrangement of whatsoever nature over or in
the relevant property ("Security Interests").  Except as provided in Part 2.6 of
the  Disclosure  Schedule,  none of the  Purchased  Assets  are  subject  to any
restrictions  with  respect to the  transferability  thereof.  The  Company  has
complete and unrestricted  power and right to sell,  assign,  convey and deliver
the Purchased Assets to Alvarion as contemplated  hereby,  including with regard
to all  relevant  laws  pertaining  to the  export of  wireless  technology.  At
Closing,  Alvarion will receive good and  marketable  title to all the Purchased
Assets, free and clear of all Liens of any nature whatsoever.

         2.7 Receivables.

         Part 2.7 of the Disclosure  Schedule  provides an accurate and complete
breakdown of all accounts receivable,  notes receivable and other receivables of
the Company as of December 31, 2002, which have not since been collected. Except
as set  forth  in  Part  2.7 of  the  Disclosure  Schedule  (and  identified  as
"allowances  for doubtful  debts"),  all  existing  accounts  receivable  of the
Company  (including  those accounts  receivable that have not yet been collected
and those accounts  receivable that have arisen since December 31, 2002 and have
not yet been  collected)  (i) represent  valid  obligations  of customers of the
Company arising from bona fide transactions  entered into in the ordinary course
of business, and (ii) are current; and neither the Company nor ECI believes that
any such accounts receivable are uncollectible.

                                       13
<PAGE>

         2.8 Equipment; Leasehold.

         (a) The  Company  has good and  marketable  title to, or in the case of
leased  property  and  assets  has valid  leasehold  interests  in, all items of
equipment and other tangible  assets owned by or leased to it and all such items
are adequate for the uses to which they are being put, are in good condition and
repair (ordinary wear and tear excepted) and are adequate for the conduct of the
Business.

         (b) The Company does not own any real  property or any interest in real
property,  except  for the  leasehold  created  under the real  property  leases
identified in Part 2.8 of the Disclosure Schedule.

         (c) None of such equipment or assets is subject to any Lien,  except as
disclosed  in the  Financial  Statements  or as shall not be  applicable  to the
equipment or assets once transferred to Alvarion.

         2.9 Intellectual Property and Other Intangible Assets.

         (a) As used herein,  the term  "Intellectual  Property"  shall mean all
patents  and  patent   applications,   registered  and   unregistered   designs,
trademarks,  trade  dress,  service  marks,  trade  names and brand  names,  all
applications for registration thereof, and all computer programs including,  but
not limited to, computer programs  embodied in semiconductor  chips, and related
flow-charts,  programmer  notes,  updates and data,  whether in object or source
code form, developed, or used in connection with the Business, and all hardware,
algorithms, utilities flowcharts, logic, documentation, processes, formulations,
data,  experimental  methods, or results,  descriptions,  business or scientific
plans,   depictions,   customer  lists  and  any  other   written,   printed  or
electronically  stored  materials  or  information,   including  specifications,
pricing  plans,  market  research  or  data,  potential  marketing   strategies,
prospective users and distribution channels,  engineering drawings,  information
concerning specialized  suppliers,  specifications for products and/or processes
and/or software,  test protocols,  and all other materials relating thereto, and
copies  thereof  in any  storage  media,  and all  other  works  of  authorship,
inventions, concepts, ideas, and discoveries developed,  discovered,  conceived,
created, made, reduced to practice, or used by the Company, and all intellectual
property rights therein,  including,  without limitation,  all copyrights in the
United States,  Israel and elsewhere,  including all rights of registration  and
publication, rights to create derivative works, and all other rights incident to
copyright  ownership,  for the residue now  unexpired of the present term of any
and all such  copyrights  and any term  thereafter  granted  during  which  such
information  is  entitled  to  copyright,  and  all  inventions  (patentable  or
unpatentable),  trade  secrets,  know-how,  ideas and  confidential  information
embodied or reflected in such  information,  including any shop rights,  for the
longest period of protection accorded to such interests under applicable law.

         (b) Part 2.9(b) of the  Disclosure  Schedule lists all of the Company's
registered patents,  patent  applications,  registered  trademarks and trademark
applications owned by the Company and third party Intellectual  Property used by
the Company in the Business, other than "off-the-shelf"  software, the aggregate
license  fees for which are less  than  $10,000  and  certain  patents  that are
co-owned by the Company and  identified as such in Part 2.9(b) of the Disclosure
Schedule.  Except as  specifically  set forth in Part  2.9(b) of the  Disclosure
Schedule, to the best of the Company's and ECI's knowledge, the Company (i) owns
or has the  unrestricted  right to use, free and clear of all liens,  claims and
restrictions  the  Intellectual  Property  used by the  Company,  and (ii)  such
Intellectual  Property  does not

                                       14
<PAGE>

infringe upon or violate any right, lien, or claim of others,  including without
limitation of the Company's  present or former employees or the former employers
of all such persons.  Notwithstanding the above, in the event that the Company's
warranties or indemnification  obligations  towards a third party (a "Beneficial
Party") with respect to the Company's Intellectual Property had not been limited
by a "best knowledge"  qualifier,  then the above representation shall be deemed
not to include a "best  knowledge"  qualifier  solely with  respect to any claim
asserted by such  Beneficial  Party where the facts alleged  therein  would,  if
true,  give rise to a breach  of the above  representation  without  such  "best
knowledge"  qualifier;  provided,  however, that such "best knowledge" qualifier
will  continue to apply to a claim by a third  party  (that is not a  Beneficial
Party) arising from breach of the above representation, regardless of whether or
not such claim also gives rise to a claim for  indemnification  by a  Beneficial
Party.  Except with respect to "off-the shelf" or other  commercially  available
software or as set forth in Part 2.9(b) of the Disclosure Schedule,  the Company
is not  currently  obligated  or  under  any  liability  whatsoever  to make any
payments by way of royalties,  fees or otherwise to any owner or licensee of, or
other claimant to, any patent,  published  pending  patent,  trademark,  service
mark, trade name,  copyright or other intangible  asset, with respect to the use
thereof or in connection with the conduct of the Business or otherwise.

         (c) Any and all  Intellectual  Property  of any  kind,  which  has been
developed,  or is currently being developed,  by the Company or on the behalf of
the Company or by any  employee,  consultant or contractor of the Company is the
property  solely of the  Company or  co-owned  by the  Company  (as  provided in
Section  2.9(b) above.  The Company has taken  security  measures to protect the
secrecy,  confidentiality  and  value of all the  Intellectual  Property,  which
measures  are  reasonable  and  customary  in the  industry in which the Company
operates.  Each person who,  either alone or in concert with others,  developed,
invented, discovered, derived, programmed or designed the Intellectual Property,
or who  has  knowledge  of or  access  to  confidential  information  about  the
Intellectual Property, has entered into a written non-disclosure  agreement with
the Company regarding ownership and treatment of the Intellectual Property, in a
form reasonably satisfactory to the Company.

         (d) Neither the Company  nor, to the best  knowledge of the Company and
ECI, any of its  employees,  has received any  communications  alleging that the
Company has violated or by conducting the Business,  would  violate,  any of the
patents,  published  pending patents,  trademarks,  service marks,  trade names,
copyrights or trade secrets or other  proprietary  rights of any other person or
entity.  Neither the Company nor, to the best  knowledge of the Company and ECI,
any of its  employees,  has received  notice nor is the Company or ECI otherwise
aware of any  infringement of or conflict with asserted  rights of others,  with
respect to any of the  Intellectual  Property,  or of any facts, or assertion of
any facts,  which  would  render  any of the  Intellectual  Property  invalid or
unenforceable,  except for communications received by the Company as part of the
examination  of its patent  applications,  that are listed in Part 2.9(d) of the
Disclosure Schedule.

         (e) To the best  knowledge  of the  Company  and  ECI:  (i) none of the
Company's  employees  is  obligated  under  any  contract  (including  licenses,
covenants or  commitments of any nature) or other  agreement,  or subject to any
judgment,  decree or order of any court or  administrative  agency,  that  would
interfere with the use of such person's best efforts to promote the interests of
the  Company  or that would  conflict  with the  operation  of the  Business  as
conducted  and as proposed to be  conducted;  (ii)  neither  the  execution  nor
delivery of the  Agreement,  nor the  conduct of the  Business as proposed to be
conducted,  will

                                       15
<PAGE>

materially conflict with or result in a material breach of the terms, conditions
or provisions of, or constitute a material default under, any contract, covenant
or instrument under which any of the Company's  employees is now obligated;  and
(iii) it is not,  and will not become,  necessary to utilize in the Business any
inventions,  and  specifically,  patent  applications,  of any of the  Company's
employees  made prior to their  employment  by the Company other than those that
have  been  assigned  to the  Company  pursuant  to valid  and  legally  binding
instruments of assignment.

         (f) Except as set forth in Part 2.9(f) of the Disclosure Schedule,  the
Intellectual  Property owned or licensed by the Company  constitutes  all of the
Intellectual Property necessary to conduct the Business.  Except as set forth in
Part 2.9(b) of the Disclosure Schedule,  the Company has not licensed any of the
Company  Intellectual  Property to any Person on a non  exclusive  or  exclusive
basis,  nor has the  Company  entered  into any  covenant  not to compete in any
market, field or application, or geographical area or with any Person.

         2.10 Agreements and Trading.

         (a) All the material  agreements to which the Company is a party and/or
by which  the  Purchased  Assets  are bound  and/or  otherwise  relating  to the
Business (including instruments, leases, licenses, arrangements, or undertakings
of any nature,  written or oral) (the "Material  Agreements") are listed in Part
2.10(a) of the Disclosure Schedule.

         (b) Except as set forth in Part 2.10(a) of the Disclosure Schedule, all
the Material  Agreements  are in full force and effect,  and neither the Company
nor ECI has any  knowledge  of the  invalidity  of or  grounds  for  rescission,
avoidance or repudiation of any of the Material Agreements,  and the Company has
not received any notice of any intention to terminate any such agreement.

         (c) Reserved.

         (d) The Company has delivered to Alvarion  accurate and complete copies
of all written Material Agreements  identified in Part 2.10(a) of the Disclosure
Schedule,  including  all  amendments  thereto.  Part 2.10(a) of the  Disclosure
Schedule  provides  an  accurate  description  of the  terms  of  each  Material
Agreement  that  is not  in  written  form,  if  any.  Each  Material  Agreement
identified  in Part 2.10(a) of the  Disclosure  Schedule is  enforceable  by the
Company in accordance with its terms.

         (e) Except as set forth in Part 2.10(e) of the Disclosure Schedule:

               (i) the Company has not  violated or breached,  or committed  any
material default under, any Material Agreement,  and, to the Company's and ECI's
best  knowledge,  no other  Person has violated or  breached,  or committed  any
material default under, any Material Agreement;

               (ii) no event has  occurred,  and no  circumstance  or  condition
exists,  that (with or without  notice or lapse of time)  will,  (A) result in a
material violation or breach of any of the provisions of any Material Agreement,
(B) give any  Person the right to declare a  material  default or  exercise  any
remedy under any Material Agreement, (C) give any Person the right to accelerate
the maturity or  performance of any Material  Agreement,  or (D) give any Person
the right to cancel, terminate or modify any Material Agreement;

                                       16
<PAGE>

               (iii)  the  Company  has  not   received   any  notice  or  other
communication  regarding  any  actual or  possible  violation  or breach  of, or
default under, any Material Agreement; and

               (iv) the Company has not waived any of its material  rights under
any Material Agreement.

         (f) No Person is renegotiating, or has a right pursuant to the terms of
any Material Agreement to renegotiate, any amount paid or payable to the Company
or to any subsidiary  thereof under any Material Agreement or any other material
term or provision of any Material Agreement.

         (g) There are no material  agreements,  which are  necessary to conduct
the Business and from which the Company is benefiting,  that are not part of the
Material Agreements.

         (h) Reserved.

         (i) Part  2.10(i)  of the  Disclosure  Schedule  provides  an  accurate
description and breakdown of the Company's backlog under Material Agreements.

         2.11  Commitments.  Except  as  disclosed  in Part  2.10 or 2.11 of the
Disclosure Schedule or in the Company Financial Statements:

         (a) There are in force no powers of attorney  given by the Company with
respect to any asset or business of the Company, and no individual or entity, as
agent,  representative,  distributor or otherwise,  is entitled or authorized to
bind or  commit  the  Company  or any  holder  of the  Purchased  Assets  to any
obligation not in the ordinary course of the Business.

         (b) The Company has not applied for or received  any grant or allowance
from any governmental authority.

         2.12 Compliance with Legal Requirements.

         (a) The Company has carried on its business and affairs in all material
respects in accordance with all applicable laws and  regulations,  to the extent
material to the Business or Purchased  Assets,  and in all material  respects in
accordance  with  the  Company's  Memorandum  of  Association  and  Articles  of
Association  (or,  in the  case of any of the  Subsidiaries,  its  incorporation
documents).  The Company and ECI are not aware of any  violation or default with
respect to any statute,  regulation,  order, decree, or judgment of any court or
any  governmental  agency which could  reasonably be expected to have a Material
Adverse  Effect on the  Company or the  Purchased  Assets.  The Company has been
granted  and  there  are now in force  all  approvals,  consents,  and  licenses
necessary for the carrying on of the Business in the places and in the manner in
which it is now carried and expected to be carried,  except for those approvals,
consents or licenses  which could not  reasonably be expected to have a Material
Adverse  Effect  on the  Business.  The  Company  or ECI  are not  aware  of any
circumstances  which evidence or indicate that any such  approvals,  consents or
licenses, to the extent material to the operation of the Business, are likely to
be suspended, canceled, revoked or not renewed.

                                       17
<PAGE>

         (b)  All  documents  required  to be  filed  with or  delivered  to the
Registrar of Companies  in respect of the Company  have been  properly  filed or
delivered  in a  timely  manner,  except  for  such non  compliance  that,  both
individually and in the aggregate, would not have a Material Adverse Effect.

         2.13 Governmental Authorizations.  Part 2.13 of the Disclosure Schedule
identifies each material  Governmental  Authorization  held by the Company or by
ECI with  respect to the  Business,  and the Company has  delivered  to Alvarion
accurate and complete copies of all  Governmental  Authorizations  identified in
Part 2.13 of the Disclosure Schedule. The Governmental Authorizations identified
in Part 2.13 of the Disclosure  Schedule are valid and in full force and effect,
and collectively constitute all Governmental  Authorizations necessary to enable
the  conduct  of the  Business  in the  manner  in which it is  currently  being
conducted.  The  Company  is  in  substantial  compliance  with  the  terms  and
requirements of the respective  Governmental  Authorizations  identified in Part
2.13 of the  Disclosure  Schedule  and has at all  times  held all  Governmental
Authorizations,  except for such Governmental  Authorizations  the lack of which
would not have a Material  Adverse  Effect on the Business.  The Company has not
received any notice or other  communication from any Governmental Body regarding
(a) any actual or  possible  violation  of or failure to comply with any term or
requirement  of any  Governmental  Authorization,  or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental  Authorization.  As of the Closing Date, the Company shall have
paid to the Office of Chief  Scientist  all  amounts  due with  respect to sales
prior to the  Closing  Date,  or shall  have such  sums  recorded  properly  and
reserved for in its Financial Statements.

         2.14 Reserved.

         2.15 Employees.

         (a) As of the Closing,  the Company will have terminated the employment
of all Hired  Employees  and in  accordance  with  Section  5.3(a)  will pay all
expenses,  costs and obligations associated with such terminations in accordance
with  applicable  law and will  discharge all  contractual,  statutory and other
obligations with respect to any Hired Employee's employment with the Company and
the  termination  thereof;  provided  that if any of the employees of any of the
Subsidiaries shall remain in the employ of the Subsidiaries,  as of the Closing,
all the  Benefits  to which such  employee  may be entitled by virtue of his/her
employment with such  Subsidiary  prior to the Closing (based on such employees'
salary prior to the  Closing),  have been  adequately  reserved in the Financial
Statements and reserved for the benefit of such Employee.

         (b) Full particulars of all Hired Employees,  their dates of employment
and  positions  and their last  compensation  packages,  are  disclosed  in Part
2.15(b)(i)  of the  Disclosure  Schedule,  which  particulars  show all benefits
including, without limitation,  salaries, social benefits, bonuses, commissions,
profit   shares,   automobile,   reimbursement   of  expenses,   vacation  days,
arrangements  for the payment of any pensions,  allowances,  lump sums, or other
like benefits on retirement or on death or termination  and any benefits in kind
("Benefits")  payable or which the Company was bound to provide to each employee
and are true,  accurate and complete in all material respects.  Part 2.15(b)(ii)
of the Disclosure  Schedule  identifies  all Benefits  offered by the Company to
each Synergy  Employee through the Closing Date and until the termination of the
Synergy Period.

                                       18
<PAGE>

         (c) Except as set forth in Part 2.15(c) of the Disclosure Schedule,  no
key  employee of the Company  has been  dismissed  in the last six months or has
given notice of termination of his/her employment.

         (d) Reserved.

         (e) As soon as possible  following  the Closing  Date,  but in no event
later than the applicable  periods  prescribed by law, all the Benefits to which
any  employee  of the  Company  is or may be  entitled  including,  inter  alia,
severance  pay, and payments in respect of accrued  vacation and, if required by
law or agreement, sick days will be paid in full by the Company.

         (f) Reserved.

         (g)  Parts  2.15(b)(i)  and  2.15(b)(ii)  of  the  Disclosure  Schedule
identify each Hired Employee or Synergy  Employee who is not fully  available to
perform  work because of  disability  or other leave and sets forth the basis of
such leave and the anticipated date of return to full service.

         (h) The Company is in  compliance  in all  material  respects  with all
applicable  Legal   Requirements  and  Contracts   relating  to  employment  and
employment  practices,  wages,  bonuses and terms and  conditions of employment,
including  employee   compensation  matters  and  with  all  general  collective
bargaining agreements that the Industrial Association (of which the Company is a
member) is a party to.

         (i)  No  organizational  campaigns,  petitions  or  other  unionization
activities seeking recognition of a collective  bargaining unit could affect the
Company or any subsidiary  thereof;  nor are there any  controversies,  strikes,
slowdowns or work stoppages pending or threatened between the Company and any of
its Employees.

         (j) As of the  Closing  Date,  all  amounts due to ECI or any Person in
respect of services  currently or in the past  performed  for the Company by ECI
employees, shall have been paid in full.

         2.16  Environmental  Matters.  The  Company  is in  compliance  in  all
material  respects with all  applicable  Environmental  Laws,  which  compliance
includes  the  possession  by the Company of all permits and other  Governmental
Authorizations  required  for  the  conduct  of the  Business  under  applicable
Environmental  Laws,  and  material  compliance  with the terms  and  conditions
thereof.  The Company has not  received  any notice or other  communication  (in
writing  or  otherwise),  whether  from a  Governmental  Body,  citizens  group,
employee  or  otherwise,  that  alleges  that  the  Company  is not in  material
compliance  with any  Environmental  Law,  and, to the  Company's and ECI's best
knowledge,  there are no  circumstances  that may prevent or interfere  with the
material  compliance of any operator of the Purchased Assets,  assuming operated
substantially  in the manner operated prior to Closing,  with any  Environmental
Law in the future (For purposes of this Section 2.16:  (i)  "Environmental  Law"
means any state,  local or foreign Legal Requirement  governing the Business and
relating  to  pollution  or  protection  of  human  health  or  the  environment
(including ambient air, surface water,  ground water, land surface or subsurface
strata),  including  any law or regulation  relating to  emissions,  discharges,
releases or  threatened  releases of  Materials  of  Environmental  Concern,  or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal,  transport or handling of Materials

                                       19
<PAGE>

of Environmental  Concern; and (ii) "Materials of Environmental Concern" include
chemicals,  pollutants,  contaminants,  wastes, toxic substances,  petroleum and
petroleum  products  and  any  other  substance  that  is now  regulated  by any
Environmental  Law or that is otherwise a danger to health,  reproduction or the
environment).

         2.17 Insurance.

         (a) Full and  accurate  details  of the  Company's  insurance  policies
covering damage or loss to the Purchased  Assets,  are contained in Part 2.17(a)
of the  Disclosure  Schedule,  including such policies as are required under the
Company's agreements with its customers.

         (b) There is no claim  outstanding  under any of such  policies nor, to
the best of the  Company's  and ECI's  knowledge,  are  there any  circumstances
reasonably likely to give rise to such a claim.

         (c) The  Company's  insurance  policies  listed in Part  2.17(a) of the
Disclosure Schedule are in effect and will remain in full force and effect until
the Closing Date.

         2.18 Related  Party  Transactions.  Except as set forth in Part 2.18 of
the  Disclosure  Schedule  and  except  for  loans  made by the  Company  to its
Subsidiaries  (which,  except  for the  loan  made by the  Company  to  InnoWave
Broadband,  Inc.,  will be assigned by the Company to Alvarion):  (a) no Related
Party has any direct or  indirect  interest  in any asset  used in or  otherwise
relating to the Business;  (b) no Related Party is indebted to the Company;  and
(c) no Related Party has any claim or right against the Company. For purposes of
this Section 2.18 each of the following shall be deemed to be a "Related Party":
(i) ECI and its  subsidiaries;  (ii) each  individual  who is, or who has at any
time since  December  31, 2000 been, a director in or an officer of the Company;
(iii) each member of the immediate family of each of the individuals referred to
in  clause  (ii)  above;  and (iv) any  trust or other  Entity  (other  than the
Company) in which any one of the  individuals  referred to in clauses `(ii)' and
`(iii)' above holds (or in which more than one of such individuals  collectively
hold),  beneficially  or otherwise,  a material  voting,  proprietary  or equity
interest.

         2.19 Legal Proceedings; Orders.

         (a) Except as set forth in Part 2.19 of the Disclosure Schedule,  there
is no pending Legal Proceeding,  that affects the Business, the Purchased Assets
or the ability to consummate the transaction  hereunder and, to the Company's or
ECI's  best  knowledge,  no Person has  threatened  to  commence  any such Legal
Proceeding: (i) that involves the Business or any of the Purchased Assets or any
Person whose  liability the Company has or may have retained or assumed,  either
contractually or by operation of law; or (ii) that challenges,  or that may have
the effect of  preventing,  delaying,  making  illegal or otherwise  interfering
with, any of the transactions  contemplated by this Agreement.  To the Company's
and ECI's best knowledge,  no event has occurred, and no claim, dispute or other
condition  or  circumstance  exists,  that  will,  or that could  reasonably  be
expected to, give rise to or serve as a basis for the  commencement  of any such
Legal Proceeding.

         (b) As of  the  date  hereof,  there  is no  order,  writ,  injunction,
judgment or decree to which the  Company,  or any of the assets owned or used by
the Company,  is subject.  To the Company's and ECI's best  knowledge,  no Hired
Employee of the Company is subject

                                       20
<PAGE>

to any order, writ, injunction,  judgment or decree that prohibits such Employee
from engaging in or continuing any conduct, activity or practice relating to the
Business.

         2.20 Major Customers and Suppliers; Product Prices.

         (a) Part  2.20(a)  of the  Disclosure  Schedule  contains a list of all
customers,  including distributors,  of the Company for each of the two (2) most
recent fiscal years showing separately the total sales (including payment terms)
and total  shipments  to each such  customer  during each such year and any firm
orders received by the Company from such customer,  provided such sales exceeded
$500,000 in any such fiscal year.  Except to the extent noted in Part 2.20(a) of
the Disclosure Schedule,  (i) the Company or ECI has no knowledge or information
of any facts  indicating,  nor any  other  reason  to  believe,  that any of the
customers listed in part 2.20 of the Disclosure Schedule will not continue to be
a customer of the Business after the Closing at substantially  the same level of
purchases  as in  2002;  and  (ii) no  customer  described  in Part  2.20 of the
Disclosure  Schedule  has  requested  in  writing  any  decrease  in the cost of
products or  services  provided  to it by the  Company or has  indicated  to the
Company its  intention  to cancel any  purchase  order,  or return any  products
purchased  by it, to the extent  such  cancellations  or  returns  exceed in the
aggregate  $100,000.  The Company  has not  received  notice from any  customer,
challenging the quality of the Company's  Products,  expressing  dissatisfaction
with the Company or disputing or challenging  their  obligation to fulfill their
obligations to the Company or any other indication implying an adverse effect on
the prospects of the Company.

         (b)  Part  2.20(b)  of  the  Disclosure   Schedule   contains  a  table
summarizing  binding  proposals  greater  than  $1,000,000  (including  value of
proposal, margins and payment terms) given by the Company to its Products during
the years 2002 and 2003, with respect to which purchase orders have not yet been
issued.

         (c) Part 2.20(c) of the Disclosure  Schedule contains a list by product
line of all sales representatives,  dealers, distributors and franchisees of the
Company.   The  Company  has   furnished   to  Alvarion   copies  of  all  sales
representative, dealer, distributor and franchise contracts, and all substantial
additions, modifications or exceptions thereto.

         (d) Part  2.20(d)  of the  Disclosure  Schedule  contains a list of the
Company's  twenty major  suppliers  (determined on the basis of the total dollar
amount of purchases  during  2002)  showing the total  purchases  from each such
supplier  during the year 2002 and any open orders  placed by the  Company  with
such supplier,  and indicating the cancellation policy with respect to each open
order.  No such major  supplier of goods or services has notified the Company of
any expected or projected  increase in the cost of goods or services provided by
such  supplier to the Company.  Part  2.20(d) of the  Disclosure  Schedule  also
contains a list of all open purchase orders issued by the Company.

         2.21  Products  Warranty  and  Product  Liability.  Part  2.21  of  the
Disclosure  Schedule contains a true, correct and complete list of the Company's
customers who have received  warranties for Volume Sales of Products whose terms
exceed 24 months and the termination  dates of each such warranty.  Part 2.21 of
the Disclosure  Schedule contains a description of all written product liability
claims and Legal Proceedings relating to the Products that are presently pending
or that to the Company's or ECI's knowledge are  threatened,  or which have been
asserted or commenced  against the Company and relating to the Purchased  Assets
or the  Business  within the last  three (3) years  (whether  or not  covered by
insurance).  There are no defects in the  Products  known to the Company or ECI,
that would materially and adversely affect performance or create an unusual risk
of injury to

                                       21
<PAGE>

property.  None of the Products  has been the subject of an epidemic  failure or
recall  campaign  and,  to the  Company's  and  ECI's  knowledge,  no  facts  or
conditions  exist  which  could  reasonably  be  expected  to  result in such an
epidemic  failure  or recall  campaign.  The  Products  have been  designed  and
manufactured  so as to meet  and  comply,  in all  material  respects,  with all
mandatory  governmental  standards and  specifications  currently in effect, and
have received all governmental  approvals  necessary to allow their sale and use
and comply with all customer  specifications,  except where such  non-compliance
will  not  have a  Material  Adverse  Effect  on the  Business.  As used in this
Agreement,  the term "Products" means any and all products (that are part of the
Purchased Assets or used for the operation of the Business)  currently or at any
time previously  distributed or sold by the Company or by any predecessor of the
Company  under any brand  name or mark  under  which  products  are or have been
distributed or sold by the Company. The Term "Volume Sales" means a sale of over
$2 million of Products within a period of twelve months to a single customer.

         2.22 Inventory.

         The Company's  inventory  has been valued in accordance  with U.S. GAAP
consistently  applied and  consists of items of quality  useable and saleable in
the normal course of the Business.

         2.23  Authority;  Binding Nature of Agreement.  Each of the Company and
ECI has the absolute and unrestricted  right,  power and authority to enter into
and to perform its obligations under this Agreement; and the execution, delivery
and  performance by the Company of this  Agreement have been duly  authorized by
all  necessary  action on the part of the Company  and ECI and their  respective
boards of directors and  shareholders,  to the extent  required.  This Agreement
constitutes  the legal,  valid and  binding  obligation  of the Company and ECI,
enforceable  against each of the Company and ECI in  accordance  with its terms,
subject to (i) laws of general  application  relating to bankruptcy,  insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.

         2.24  Non-Contravention.   Neither  (1)  the  execution,   delivery  or
performance of this Agreement or any of the other agreements referred to in this
Agreement,  nor (2) the consummation of any of the transactions  contemplated by
this Agreement,  will directly or indirectly (with or without notice or lapse of
time):

         (a)  contravene,  conflict  with or result in a violation of (i) any of
the  provisions  of the  Company's  Articles of  Association  or  Memorandum  of
Association,  or (ii) any resolution adopted by the Company's shareholders,  the
Company's  board  of  directors  or any  committee  of the  Company's  board  of
directors;

         (b) contravene,  conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated  by this  Agreement  or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction,  judgment or decree
to which the Company, or any of the Purchased Assets, is subject;

         (c)  contravene,  conflict  with or result in a violation of any of the
terms or  requirements  of, or give any  Governmental  Body the right to revoke,
withdraw,  suspend, cancel, terminate or modify, any Governmental  Authorization
or any  governmental  grant,  that

                                       22
<PAGE>

is held by the  Company  or that was  granted to the  Company or that  otherwise
relates to the Company's business or to any of the Purchased Assets;

         (d)  contravene,  conflict  with or result in a material  violation  or
breach of, or result in a material  default under, any provision of any Material
Agreement that is or would constitute a Material  Agreement,  or give any Person
the  right to (i)  declare a  default  or  exercise  any  remedy  under any such
Material  Agreement,  (ii)  accelerate  the maturity or  performance of any such
Material  Agreement,  or (iii)  cancel,  terminate  or modify any such  Material
Agreement; or

         (e) result in the  imposition  or creation  of any lien or  Encumbrance
upon or with respect to any asset owned or used by the Company.

         Except  as set  forth  in Part  2.24 of the  Disclosure  Schedule,  the
Company  is not and will not be  required  to make any  filing  with or give any
notice to, or to obtain any Consent from, any Person in connection  with (x) the
execution,  delivery  or  performance  of  this  Agreement  or any of the  other
agreements referred to in this Agreement,  or (y) the consummation of any of the
transactions contemplated by this Agreement.

         2.25 No Conflicting  Interest.  Except as set forth in Part 2.25 of the
Disclosure Schedule,  the Company or ECI is not aware that any current or former
key employee of the Company (who was employed by the Company in the last 2 years
immediately  preceding  the date hereof),  has any interest in any  corporation,
partnership,  or  other  entity  that  is  engaged  in a  business  which  is in
competition with the Business, or is a supplier or customer of the Company.

         2.26  Experience;  Receipt of  Information.  ECI has such knowledge and
experience  in business  matters as to be capable of  evaluating  the merits and
risks relating to the receipt of Warrants as part of the  consideration  for the
Purchased  Assets and ECI  recognizes  that exercise of the Warrants  involves a
high degree of risk and ECI has evaluated the merits and risks involved therein.
ECI has been afforded the  opportunity  to ask questions of and receive  answers
from duly authorized officers or other representatives of Alvarion.

         2.27 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 on the basis of arrangements made by
or on behalf of the Company or ECI, or, to the best of the  Company's  and ECI's
knowledge, any of their respective employees or agents.

         2.28  Full  Disclosure.   This  Agreement   (including  the  Disclosure
Schedule) does not, and the Company  Closing  Certificate  will not, (i) contain
any  representation,  warranty or information  that is false or misleading  with
respect to any material  fact, or (ii) omit to state any material fact necessary
in order to make the representations,  warranties and information  contained and
to be contained herein and therein not false or misleading.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF ALVARION.

         Alvarion represents and warrants to the Company and ECI, as follows:

         3.1 Due  Organization.  Alvarion is a public company duly organized and
validly  existing  under  the laws of the  State  of  Israel.  Alvarion  has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as now conducted.

                                       23
<PAGE>

         3.2 Authority;  Binding Nature of Agreement.  Alvarion has the absolute
and  unrestricted  right,  power and authority to perform its obligations  under
this Agreement; and the execution,  delivery and performance by Alvarion of this
Agreement  (including the  contemplated  issuance of warrants in accordance with
this Agreement) have been duly authorized by all necessary action on the part of
Alvarion  and its board of  directors.  No vote of  Alvarion's  shareholders  is
needed to approve any of the transactions  contemplated by this Agreement.  This
Agreement  constitutes  the legal,  valid and binding  obligation  of  Alvarion,
enforceable  against it in  accordance  with its  terms,  subject to (i) laws of
general  application  relating  to  bankruptcy,  insolvency  and the  relief  of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.

         3.3 Valid  Issuance.  The Warrants  have been  validly  issued free and
clear of any lien, claim, judgment, charge, mortgage, security interest, pledge,
escrow, equity or other encumbrance and the exercise of the Warrants pursuant to
the terms thereof will vest in the holders  thereof legal and valid title to the
Ordinary  Shares  issued  pursuant  to the  exercise  of the  Warrants  and such
Ordinary  Shares when issued in accordance  with the  provisions of the Warrant,
will be  validly  issued,  fully paid and  nonassessable,  free and clear of any
liens, claims, encumbrances or third party rights of any kind and not subject to
preemptive rights or any other similar rights of shareholders of Alvarion.

         3.4 Consents and Approvals. Except as set forth on Schedule 3.4 hereto,
no filing or  registration  with,  no  notice to and no  permit,  authorization,
consent or approval of any third party or any Governmental Body is necessary for
the consummation by Alvarion of the transactions contemplated by this Agreement.

         3.5 No Violation.  Neither the execution and delivery of this Agreement
by Alvarion,  the performance by Alvarion of its  obligations  hereunder nor the
consummation  by  Alvarion of the  transactions  contemplated  hereby,  will (a)
violate,  conflict  with or result in any breach of any  provision of Alvarion's
Memorandum of Association  and Articles of  Association,  (b) violate,  conflict
with or result in a violation  or breach of, or  constitute  a material  default
(with  or  without  due  notice  or  lapse of time or  both)  under  the  terms,
conditions or provisions of any note, bond, mortgage,  indenture, deed of trust,
license,  lease or  agreement to which  Alvarion is a party,  or (c) violate any
order, writ, judgment,  injunction,  decree,  statute, rule or regulation of any
court or domestic or foreign Governmental Body applicable to Alvarion.

         3.6  Experience;  Receipt of Information.  Without  derogating from the
Company's and ECI's  representations  contained in this Agreement and Alvarion's
right to fully rely thereon,  Alvarion represents that it has such knowledge and
experience in business  matters so as to be capable of evaluating the merits and
risks relating to the acquisition of the Purchased Assets,  and has reviewed and
inspected  all of the data and  information  provided  to it by the  Company  in
connection with this Agreement.

SECTION 4. CERTAIN COVENANTS OF THE COMPANY AND ECI.

         4.1 Access and  Investigation.  During the period from the date of this
Agreement through the Closing,  or the earlier  termination hereof in accordance
with Section 8 (the "Pre-Closing  Period"), ECI and the Company shall, and shall
cause the  Company's  Representatives  to: (a) provide  Alvarion and  Alvarion's
Representatives  with  reasonable  access  during normal  business  hours to the
Company's  Representatives,  personnel  and  assets

                                       24
<PAGE>

and to all existing books, records, Tax Returns, work papers and other documents
and information  relating to the Company,  the Business or the Purchased Assets;
and (b) provide  Alvarion  and  Alvarion's  Representatives  with copies of such
existing  books,  records,  Tax  Returns,  work papers and other  documents  and
information  relating to the Company and any subsidiary  thereof,  and with such
additional  financial,  operating and other data and  information  regarding the
Company and any subsidiary thereof, as Alvarion may reasonably request.

         4.2 Operation of the Company's and Subsidiaries'  Business.  During the
Pre-Closing Period:

         (a) the  Company  and  each of its  Subsidiaries  shall  conduct  their
respective businesses and operations in the ordinary course and in substantially
the same manner as such  businesses and operations  have been conducted prior to
the date of this Agreement;

         (b) the  Company and each of its  Subsidiaries  shall  preserve  intact
their  current  business  organization,  use  best  commercial  efforts  to keep
available the services of their current  officers,  key-employees  and employees
and  maintain  their  relations  and good  will with all  suppliers,  customers,
landlords,  creditors and other Persons having business  relationships  with the
Company or such Subsidiary;

         (c) the Company and each of its  Subsidiaries  shall keep in full force
all insurance policies referred to in Part 2.17 of the Disclosure Schedule;

         (d) the  Company  shall  cause  its  officers  to  report  to  Alvarion
concerning  the status of the  Company's  and the  Subsidiaries'  business  upon
Alvarion's request;

         (e) the  Company  shall  not  declare,  accrue,  set  aside  or pay any
dividend or make any other distribution in respect of any securities,  and shall
not repurchase, redeem or otherwise reacquire securities, provided, however that
the  Company  may  distribute  to ECI such  amount  of cash in excess of what is
required by the Company in order to comply with the provisions of Section 6.7 on
the Closing Date;

         (f) the Company shall not sell,  issue or authorize the issuance of (i)
any  securities  of the  Company,  (ii)  any  option  or right  to  acquire  any
securities  of  the  Company,  or  (iii)  any  instrument  convertible  into  or
exchangeable for securities of the Company;

         (g) the Company shall not form any  subsidiary or acquire any equity or
other interest in any other Entity;

         (h) the  Company  and its  Subsidiaries  shall  not  make  any  capital
expenditure that exceeds $30,000, without obtaining Alvarion's written approval;

         (i) the  Company  and its  Subsidiaries  shall  not,  other than in the
ordinary  course of business,  (i) enter into, or permit any of the assets owned
or used by them to become bound by, any Contract  that is or would  constitute a
Material  Agreement,  or (ii)  amend or  prematurely  terminate,  or  waive  any
material right or remedy under, any such Contract;

         (j) the Company and its  Subsidiaries  shall not (i) acquire,  lease or
license  any right or other  asset from any other  Person,  except for rights or
other assets  acquired,  leased or licensed in the ordinary  course of business,
(ii) sell or otherwise dispose of, or lease

                                       25
<PAGE>

or license,  any right or other asset to any other Person,  except for rights or
other assets disposed of, leased or licensed in the ordinary course of business,
or (iii) waive or  relinquish  any right,  except for assets  acquired,  leased,
licensed  or  disposed of by the  Company  pursuant  to  Contracts  that are not
Material Agreements;

         (k) the  Company and its  Subsidiaries  shall not (i) lend money to any
Person,   other  than  in  the  ordinary   course  of  business  (and  following
notification  to  Alvarion),  except  for  amounts  of up to $5,000  for  travel
expenses, or (ii) incur or guarantee any indebtedness for borrowed money;

         (l) the Company  shall not (i)  establish,  adopt or amend any employee
benefit  plan,  (ii)  pay any  bonus or make any  profit-sharing  payment,  cash
incentive  payment or similar  payment to, or increase  the amount of the wages,
salary,  commissions,  fringe  benefits or other  compensation  or  remuneration
payable to, any of its directors,  officers or employees,  or (iii) hire any new
employee;

         (m) the  Company  and its  Subsidiaries  shall not  change any of their
methods of accounting or accounting practices;

         (n) the Company and its  Subsidiaries  shall not commence or settle any
material Legal Proceeding;

         (o) the Company and its Subsidiaries  shall not take any action that is
not in the ordinary  course of business and  consistent  with past practices and
shall  not  agree  or  commit  to take  any such  action  or any of the  actions
described in clauses "(e)" through "(n)" above.

         Notwithstanding  the foregoing,  the Company and its  Subsidiaries  may
take any action described in clauses "(e)" through "(o)" above if Alvarion gives
its prior written consent to the taking of such action.

         4.3 Notification; Updates to Disclosure Schedule.

         (a) During the Pre-Closing  Period,  the Company and ECI shall promptly
notify Alvarion in writing of:

               (i) the discovery by the Company or any  Subsidiary of any event,
condition,  fact or  circumstance  that  existed on or prior to the date of this
Agreement  and that caused or  constitutes  an  inaccuracy in or a breach of any
representation or warranty made by the Company in this Agreement;

               (ii) any event,  condition,  fact or  circumstance  that  occurs,
arises  or exists  after  the date of this  Agreement  and that  would  cause or
constitute an inaccuracy in or a breach of any  representation  or warranty made
by the Company in this  Agreement,  if (x) such  representation  or warranty had
been  made as of the time of the  occurrence,  existence  or  discovery  of such
event, condition,  fact or circumstance,  or (y) such event, condition,  fact or
circumstance  had  occurred,  arisen or  existed on or prior to the date of this
Agreement;

               (iii) any material breach of any material  covenant or obligation
of ECI or the Company; and

                                       26
<PAGE>

               (iv) any event,  condition,  fact or circumstance that would make
the  timely  satisfaction  of any of the  conditions  set forth in  Section 6 or
Section 7 impossible or unlikely.

         (b) If any event,  condition,  fact or circumstance that is required to
be disclosed  pursuant to Section  4.3(a)  requires any change in the Disclosure
Schedule,  or if any such event,  condition,  fact or circumstance would require
such a change assuming the Disclosure  Schedule were dated as of the date of the
occurrence,   existence  or  discovery  of  such  event,   condition,   fact  or
circumstance,  then the Company  and ECI shall  prior to the Closing  deliver to
Alvarion an update to the Disclosure  Schedule  specifying  such change,  but no
such disclosure shall cure any breach of any representation or warranty which is
inaccurate;  provided,  however,  that (i) if,  in light  of such  event,  fact,
condition or  circumstance,  Alvarion has decided not to consummate  the Closing
pursuant to this Agreement,  it shall not be entitled to be indemnified for such
breach;  and (ii) if,  despite  such event,  fact,  condition  or  circumstance,
Alvarion has decided to consummate the Closing  pursuant to this  Agreement,  it
shall not be entitled  to make a claim in an amount  exceeding  $1,000,000  with
respect to such breach.

         4.4 No Negotiation.  During the Pre-Closing Period, neither ECI nor the
Company shall directly or indirectly:

         (a) solicit or encourage  the  initiation  of any inquiry,  proposal or
offer from any Person (other than Alvarion)  relating to a possible  Acquisition
Transaction of the Company;

         (b)  participate in any  discussions or  negotiations or enter into any
agreement with, or provide any non-public information to, any Person relating to
or in connection with a possible Acquisition Transaction; or

         (c) consider, entertain or accept any proposal or offer from any Person
relating to a possible Acquisition Transaction.

         ECI and the Company shall  promptly  notify  Alvarion in writing of any
inquiry,  proposal or offer relating to a possible Acquisition  Transaction that
is  received  by the  Company,  ECI or any of their  respective  Representatives
during the Pre-Closing Period.

SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES.

         5.1  Filings  and  Consents.  As  promptly  as  practicable  after  the
execution of this  Agreement,  each party to this  Agreement  (a) shall make all
filings (if any) and give all notices (if any)  required to be made and given by
such party in connection with the  transactions  contemplated by this Agreement,
and (b) shall use all commercially reasonable efforts to obtain all Consents (if
any) required to be obtained  (pursuant to any applicable  Legal  Requirement or
Contract,  or  otherwise)  by such  party in  connection  with the  transactions
contemplated  by this  Agreement.  Each  party  to this  Agreement  shall  (upon
request)  promptly deliver to the other parties a copy of each such filing made,
each such notice given and each such  Consent  obtained by such party during the
Pre-Closing  Period.  Each party shall  promptly  provide the other parties with
copies of all filings made by such party with the Israel  Securities  Authority,
the United States Securities and Exchange Commission or any other state, federal
or  foreign  Governmental  Body  in  connection  with  this  Agreement  and  the
transactions contemplated hereby.

                                       27
<PAGE>

         5.2  Public  Announcements.  During  the  Pre-Closing  Period,  (a) the
Company and ECI shall not (and the Company and ECI shall not permit any of their
Representatives  to)  issue  any  press  release  or make any  public  statement
regarding this Agreement,  or regarding any of the transactions  contemplated by
this Agreement, without Alvarion's prior written consent, and (b) Alvarion shall
not (and  Alvarion  shall not  permit any of its  Representatives  to) issue any
press  release  or make  any  public  statement  regarding  this  Agreement,  or
regarding any of the transactions contemplated by this Agreement,  without ECI's
prior written consent. Notwithstanding the provisions of the preceding sentence,
each  party  shall be  permitted  to issue any press  release or make any public
statement  as such party is advised by counsel is legally  required to be issued
or made under any applicable  laws,  regulatory  requirements  or stock exchange
rules;  provided,  however,  that in such  event the party  issuing  such  press
release or making such public  statement  will  provide the other  parties  with
prompt written notice of such  requirement and a copy of the press release to be
issued or public  statement  to be made,  and the parties  shall use  reasonable
commercial  efforts to  coordinate  the content of such press  release or public
statement.

         5.3 Employees.

         (a) By Closing,  the Company will have terminated the employment of all
Hired Employees, and as soon as possible thereafter,  but in no event later than
the applicable  periods  prescribed by law, shall have paid all expenses,  costs
and obligations,  benefits,  bonuses and taxes, including without limitation all
insurance  obligations,  advance  notice,  severance pay,  recreation  payments,
vacation days and incentive  plans  associated  with such  termination  and such
employment under any agreement, contract, obligation and under applicable law.

         (b) The Company  will use  reasonably  commercial  efforts to cause the
Hired  Employees to execute a waiver in the form attached hereto as Annex 5.3(b)
with respect to all prior  obligations of the Company  relating to the period of
his/her employment with the Company prior to the date of the Closing.

         (c)  Immediately  following  the  Closing,  Alvarion  will  retain  the
services  of those  persons  whose  names  appear on Annex  5.3(c)  (the  "Hired
Employees"), subject to such Hired Employees' execution of employment agreements
and proprietary rights agreements in forms  satisfactory to Alvarion.  The Hired
Employees  whose  execution of an employment  agreement and  proprietary  rights
agreement  with  Alvarion  shall  be  a  condition   precedent  to  the  Closing
obligations  of  Alvarion,  will be marked with an asterisk in Annex 5.3(c) (and
are hereinafter referred to as "Key Personnel").

         (d) The Company  will  continue to employ and shall make  available  to
Alvarion  those  persons  whose  names  appear  on Annex  5.3(d)  (the  "Synergy
Employees")  for a period of up to three (3) months from the  Closing  Date (the
"Synergy  Period") so as to assist in the  integration  of the Business with and
into Alvarion's business,  and Alvarion shall pay the Company all costs directly
or  indirectly  associated  with  such  employment  from  the  Closing  Date and
throughout  the  Synergy  Period  payable  on the first day of each  month  with
respect to the previous  month or any portion  thereof,  against an invoice from
the Company (including,  without limitation,  salary costs, pensions, allocation
of social benefits, transportation,  meal allowances, national insurance, health
insurance,  retention  bonus,  etc.).  Alvarion shall not be responsible for any
payment with respect to the  termination of such Synergy  Employees or any other
amount that would not have been borne by Alvarion if such Synergy  Employees had
been Hired  Employees  throughout the Synergy  Period,  but shall

                                       28
<PAGE>

reimburse  the  Company  for all costs  associated  with the portion of benefits
accrued at termination to the extent the accrual of such portion occurred during
the Synergy Period (including, without limitation, any retention bonus, vacation
days,  convalescence  payments and severance  payments).  The retention bonus to
which each  Synergy  Employee  shall be entitled  (unless  he/she  resigns or is
terminated by Alvarion for cause prior to the termination of the Synergy Period)
is set forth in Annex 5.3(d).

         (e) Alvarion will be entitled to obtain, on a subcontractor  basis, the
services of those ECI employees that are currently  performing  services for the
Company,  under the same terms and  conditions  under which such  services  were
provided  to the  Company  prior to the  Closing.  Alvarion  shall  not bear any
liability  towards ECI or these  employees or any other ECI employees which have
performed  services for the Company  prior to the  Closing,  with respect to any
services  provided  to, or any act or  omission  of,  the  Company  prior to the
Closing,  and ECI shall  indemnify  Alvarion in full for any damages  associated
therewith.

         (f) Service fees,  benefits and share  incentive  packages to the Hired
Employees  shall  be  established  in  accordance   with   Alvarion's   existing
compensation policies.

         (g) With  respect to employees  of those  Subsidiaries  included in the
Purchased Assets,  at the Closing,  the Company shall cause such Subsidiaries to
set aside,  in a separate  account,  amounts  equal to all the Benefits to which
such  employees  may be  entitled  by virtue  of  his/her  employment  with such
Subsidiary  prior to the Closing and any other amounts that such employees would
have received if terminated at such time.

         5.4 Reserved

         5.5 Reserved.

         5.6  Tax  Liability.  Each  party  shall  be  responsible  for  all its
respective tax obligations  deriving from the transactions  contemplated in this
Agreement.  Notwithstanding  the above, ECI undertakes to indemnify  Alvarion in
full for any Tax  liability  incurred  by  Alvarion  or any of its  subsidiaries
following the Closing Date relating to the Business or the Purchased Assets with
respect to the period prior to the Closing. Alvarion hereby undertakes to notify
ECI immediately upon learning of any such Tax Liability,  grant ECI sole control
over disputing any such Tax liability and assist ECI, in any  reasonable  manner
required by ECI, in contesting any such Tax liability).

         5.7 Relationship with GVT.

         (a)  Alvarion  shall not assume the  Company's  rights and  obligations
pursuant to the GVT Agreements (as defined below);  provided that Alvarion shall
assist ECI and the Company in the performance of such agreements as follows:

               (i) The  Company  will be  entitled  to  purchase  from  Alvarion
products  and spare  parts at the prices and terms as  currently  in effect with
respect to the purchases of such products from the Company by GVT.

               (ii) Alvarion shall provide the Company and/or InnoWave Do Brazil
LTDA. third tier technical  support  services,  which services will be priced in

                                       29
<PAGE>

accordance  with their fair market value as shall be negotiated in good faith by
Alvarion and the Company.

               (iii) Alvarion shall  provide,  free of charge,  until the end of
the  applicable  free  warranty  period  set  forth in the GVT  Agreements,  all
warranty  support,  services and product  replacements  with respect to products
sold to GVT pursuant to the GVT  Agreements  prior to the Closing and shall bear
all  warranty-related  costs  (including,  inter  alia,  employee  salaries  and
benefits)  associated with the operation of the Brazil Sub (on a  sub-contractor
basis); provided that Alvarion's total cost (both under this Section 5.7(a)(iii)
and Sections (5.7b) and 5.7(c) (if the Supply  Agreement is assumed  thereunder)
shall not exceed the amounts set forth under  Section  5.7(c) below and provided
further  that all income  derived  by the Brazil Sub from GVT shall be  credited
against such warranty-related costs to be borne by Alvarion.

         (b) In the event that the Company presents  Alvarion with a letter from
GVT in which GVT waives  all claims  raised by GVT  against  the  Company in the
e-mail  messages  sent by GVT to ECI on January 11, 2003 and January 20, 2003 (a
form of which waiver is attached  hereto as Annex  5.7(b) or such other  similar
form to be  approved  by  Alvarion,  which  approval  shall not be  unreasonably
withheld) then the following provisions will apply:

               (i)  Alvarion or a  subsidiary  thereof  shall fully and promptly
assume all of the Company's obligations under the Supply Agreement,  as detailed
in Part 2.4(f)(vii) of the Disclosure Schedule.

               (ii)  Alvarion  shall use  reasonable  efforts to remove ECI as a
co-signor on the Supply Agreement.

               (iii) Alvarion,  or a subsidiary  thereof,  will enter into a new
services  agreement  with GVT,  subject  to the  ability  to  attain  reasonable
commercial  terms,  with respect to support  services that are to be provided to
GVT for an  extended  term  commencing  May 2003 and shall  fully  and  promptly
perform all its obligations under such new services agreement with GVT.

               (iv) The Company  shall  cause the  transfer of the Brazil Sub to
Alvarion,  and  Alvarion  shall  accept  the  transfer  of all  the  issued  and
outstanding share capital of the Brazil Sub; provided, however, that all amounts
due to employees with respect to the period prior to the Closing and all amounts
due on  termination  in the event that in lieu of such  transfer  the Brazil Sub
were to terminate  the  employment of all its  employees,  shall be borne by the
Company.

         (c) ECI undertakes and warrants to Alvarion,  that until the end of the
applicable free warranty period set forth in the GVT Agreements,  the total cost
to Alvarion of all support,  services and product  replacements  with respect to
products sold to GVT pursuant to the GVT Agreements prior to the Closing,  shall
not  exceed  in  the  aggregate  one  million  dollars  ($1,000,000).  Within  a
reasonable time after reaching $1,000,000 in such costs or at any other anytime,
Alvarion  shall  deliver to ECI a report  specifying  the support,  services and
product replacements,  together with the costs associated therewith, rendered or
provided by Alvarion to GVT in each  quarter and such report  shall be deemed to
be  conclusive  evidence of such  expenses,  unless ECI objects to it in writing
(specifying  the  particulars of such

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<PAGE>

objection)  within  twenty-one (21) days following  Alvarion's  delivery of such
report,  in which case the parties shall  negotiate in good faith and attempt to
agree on such costs.

         (d) ECI shall bear all  liabilities  arising  after the end of the free
warranty period  applicable to each product sold to GVT, as set forth in Section
10.7 of the Supply  Agreement,  provided that in the event that Alvarion assumes
the Company's  obligations under the Supply Agreement as set forth in subsection
(b) above,  Alvarion  shall  undertake to provide to GVT,  subject to reasonable
commercial  terms,  technical  support and spare parts, to the extent  required,
pursuant to said Section 10.7, for the term thereof.

         (e) ECI further undertakes to indemnify Alvarion for any loss sustained
by Alvarion as a result of any claim with respect to the GVT Agreements relating
to events that occurred, or to products or services provided,  during the period
prior to the  assumption  by Alvarion of the  Company's  rights and  obligations
pursuant to the GVT Agreements in accordance with subsection (b) above.

         (f) In the event that  Alvarion  enters into a new  services  agreement
with GVT as set forth in subsection (b)(ii) above, and fails to provide GVT with
the support services pursuant to such new services  Agreement,  (i) ECI shall be
entitled to re-hire  former  Company  employees who have been providing GVT with
support  services prior to the Closing Date to provide such  services,  provided
they are at such  time  employed  by  Alvarion  or any of its  Affiliates,  (ii)
Alvarion shall transfer to ECI all facilities and equipment (at the  depreciated
cost thereof) necessary to enable ECI to render such support services, and (iii)
ECI shall be entitled to receive the applicable  support fees. The provisions of
this Section 5.7(f) shall not derogate, in any manner, from ECI's rights against
Alvarion for Alvarion's breach of its support  obligations.  Without  derogating
from the generality of the above, it is hereby  clarified that in the event that
ECI is forced to take the  actions  specified  in (i) and (ii)  above,  Alvarion
shall have no right and/or claim against ECI with respect to such actions.

         5.8  Confidentiality.  The  parties  agree  that,  unless and until the
transaction  contemplated  by this Agreement  shall have been  consummated,  the
parties will hold in strict  confidence all information  and documents  received
from the other party in connection with the transaction  contemplated herein and
shall refrain from using such  information  and documents in any manner.  If the
transaction  herein  contemplated  shall not be  consummated,  each  party  will
continue to hold such information and documents in strict confidence;  provided,
however,  that the obligations of each party under this Section to maintain such
confidentiality  shall not apply to any  developments  made by such party  which
such party can prove were developed by it  independently,  without any reference
to the  information  and  documents  provided  by  the  other  party  and to any
information  or documents that are in the public domain at the time furnished by
such party or that become  public  thereafter  through any means other than as a
result of any act which constitutes a breach of this Agreement.  Notwithstanding
any provision to the contrary contained herein, each party shall be permitted to
disclose  such of the  information  and documents as it is advised by counsel is
legally   required  to  be  disclosed   under   applicable   law  or  regulatory
requirements.

         5.9 Additional Obligations by ECI.

         (a) On the Closing, ECI shall sublicense,  assign or otherwise transfer
to Alvarion,  without any consideration,  any Intellectual Property,  equipment,
Governmental Authorizations,  certifications and other assets, currently held or
registered in the name of ECI,  currently used in the operation of the

                                       31
<PAGE>

Business,  and required for the operation of the Business as now conducted or as
currently proposed to be conducted. Notwithstanding the above, the ECI equipment
that is currently  used by EDS for the  performance of the services set forth in
the EDS  Agreement,  will be  leased to  Alvarion,  without  any  consideration,
throughout the term of the EDS Agreement.

         (b) ECI will use reasonable commercial efforts to ensure that any cross
licensing  arrangements currently in effect between ECI and any third party with
respect to such third party's intellectual  property,  with respect to which the
Company is a third party beneficiary, shall continue to apply to the use of such
intellectual  property by Alvarion following the Closing at no cost to Alvarion.
In addition,  on the Closing  Date,  ECI and Alvarion will execute a cooperation
agreement (the "Cooperation Agreement") in the form of Annex 5.9(b) hereto.

         (c) As a condition to the Closing,  and as an inducement to Alvarion to
execute this Agreement and complete the transaction contemplated hereby, ECI and
the  Company  shall  sign  a  non-competition  and  non  solicitation  agreement
substantially in the form of Annex 5.9(c) (the "Non-Competition Agreement").

         (d) Prior to the Closing Date, ECI shall procure for Alvarion the right
to continue the purchases of AIU components  from Inovia  Telecoms  Ltd.,  until
December  31,  2004,  on market terms and prices to be agreed upon in good faith
between  such  parties.  An  additional  charge  of 30% will be  applied  to any
purchase  order  for such  products  less  than  $30,000.  All  orders  for such
components  shall be made at least two (2)  months in  advance  of the  required
delivery  dates;  provided that Alvarion is able to procure long lead time items
that would otherwise prevent the achievement of such two (2) month lead time and
provides to ECI prior  written  notice of its ability to make such  procurement;
and if Alvarion is unable to make such  procurement,  then the time period shall
be five (5) months.

         5.10 Use of the Company's Name.  Immediately following the Closing, the
Company shall change its corporate  name to a new name bearing no resemblance to
its present name so as to permit the use of its present name by Alvarion.

         Neither the Company nor any Affiliate thereof shall,  without the prior
written consent of Alvarion,  make any use of the name "InnoWave" or " "InnoWave
ECI Wireless Systems" or any other name confusingly  similar thereto,  except as
may be necessary for the Company to pay its liabilities, prepare tax returns and
other reports, and to otherwise wind up and conclude its business.

         5.11  Infringements.   Following  the  Closing  each  party  shall,  if
necessary,  reasonably  assist  the  other  party  in the  defense  against  any
Liability to a third party for  infringement of such third party's  intellectual
property, relating to the period prior to the Closing Date.

         5.12  Performance  Bonds.  By  Closing  Alvarion  shall  take  all  the
necessary steps so as to assume the Performance  Bonds and shall have caused the
release of ECI and the Company from any and all liability  under the Performance
Bonds.

         5.13  Payment of Lease  obligation.  Alvarion  shall have the option to
notify the Company  that it has  decided to pay the Company the total  amount of
rent payments and any other amounts due until July 31, 2003, with respect to the
lease agreement  described in

                                       32
<PAGE>

Section 2.4(f)(ii) hereof in lieu of assuming such lease agreement.  Such option
shall  have to be  exercised  within 7 days prior to the  Closing  and shall not
affect the Assumed Liabilities as determined for purposes of the Draft Pro-forma
Report and the Final Pro-forma Report.

SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ALVARION.

         The obligations of Alvarion to consummate the transactions contemplated
by this Agreement are subject to the  satisfaction,  at or prior to the Closing,
of each of the following conditions any or all of which may be waived in writing
by Alvarion:

         6.1  Accuracy  of  Representations.  Each  of the  representations  and
warranties  made by the  Company  and ECI in this  Agreement  and in each of the
other  agreements and  instruments  delivered to Alvarion in connection with the
transactions  contemplated  by this Agreement  shall have been accurate,  in all
material  respects,  as of the date of this Agreement and as of the Closing Date
as if made on the Closing Date.

         6.2 Performance of Covenants. All of the covenants and obligations that
the Company or ECI are  required to comply with or to perform at or prior to the
Closing shall have been complied with and performed in all material respects.

         6.3 Consents.  All Consents  required to be obtained in connection with
the transactions  contemplated by this Agreement including,  without limitation,
the consent of the Office of Chief Scientist  (which consent will not create any
obligation  that  either  Alvarion  or  the  Company  would  not  have  had on a
stand-alone basis if the transactions  contemplated  herein had not taken place)
and the  consent of the  Investment  Center to the  transaction  (including  the
expansion  of  Alvarion's   Approved   Enterprise  plans  with  respect  to  the
acquisition  of the equipment  purchased  hereunder,  subject only to Alvarion's
undertaking  to maintain the  equipment  currently  held by the Company in Omer,
either in Omer or in any other  place  that is within a  Development  Zone "A"),
shall  have been  obtained  and  shall be in full  force  and  effect;  and such
Consents shall not include any provision containing,  or would otherwise create,
a Material Adverse Effect on Alvarion or the Company  following the Closing.  In
addition,  the Company shall have received written  confirmation from the Office
of the Chief Scientist that the WaveGain project has been terminated and that no
further royalties are due in respect of such project.

         6.4  Agreements  and  Documents.   Alvarion  shall  have  received  the
following  agreements  and  documents,  each of which shall be in full force and
effect:

         (a) Certified  copies of  resolutions of the Board of Directors of each
of the  Company  and  ECI,  authorizing  and  approving  the  Agreement  and the
consummation  of the  transactions  contemplated  by the  Agreement in customary
form.

         (b) An executed waiver in the form attached hereto as Annex 5.3(b),  to
be signed by all Hired Employees who executed Employment  Agreements as provided
in Section 6.4(c) below.

         (c)  Employment  Agreements and  confidential  invention and assignment
agreements, reasonably satisfactory in form and substance to Alvarion, (i) to be
executed  by all  Key  Personnel  immediately  prior  to the  execution  of this
Agreement (such agreements to contain a condition precedent specifying that they
will only come into effect upon Closing),

                                       33
<PAGE>

(ii) by 80% of the Hired  Employees  who are  identified  with two  asterisks in
Annex  5.3(c) and as  otherwise  set forth  therein,  and (iii) 75% of all Hired
Employees;

         (d) A legal opinion of Goldfarb,  Levy,  Eran & Co.,  Adv., in the form
attached  hereto as Annex  6.4(d),  addressed  to  Alvarion  and dated as of the
Closing Date;

         (e) A certificate  executed by the Company's  Chief  Executive  Officer
(but without  personal  liability  therefor)  certifying that the conditions set
forth  in  this  Section  6 have  been  duly  satisfied  (the  "Company  Closing
Certificate");

         (f) All  documents  necessary  for the  assignments  of  those  Assumed
Contracts marked with an asterisk in Schedule 1.1(g);

         (g) Bills of sale and such other  instruments of assignment,  transfer,
conveyance  and  endorsement  in forms to be reasonably  approved by the parties
prior to Closing;

         (h) The Non  Competition  Agreement in the form of Annex  5.9(c),  duly
executed by ECI and the Company; and

         (i) The  Cooperation  Agreement  in the  form  of  Annex  5.9(b),  duly
executed by ECI.

         (j) All  documents  required  to effect  the  change  of the  Company's
corporate name to a new name bearing no  resemblance  to its present name,  duly
executed by the Company.

         (k) Duly  executed  share  transfer  deeds  and/or  any  other  similar
documents  necessary  to effect the  transfer of the  outstanding  Subsidiaries'
shares to Alvarion.

         (l) Duly executed consents of Bank Leumi and Bank Hapoalim B.M. for the
transfer of the Purchased Assets contemplated hereby.

         (m) The  Company's  audited  financial  statements  for the years ended
December 31, 2000 and December 31, 2001.  Such financial  statements,  including
the  consolidated  balance sheet and the statements of operations and statements
of cash flow for each of the periods then ended,  shall be audited in accordance
with U.S. GAAP.

         6.5 No  Restraints.  No temporary  restraining  order,  preliminary  or
permanent   injunction  or  other  order  preventing  the  consummation  of  the
transactions  contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement  enacted or deemed  applicable to the  transactions  contemplated by
this Agreement that makes consummation of the transactions  contemplated by this
Agreement  illegal,  which Legal  Requirement shall not have been removed within
thirty (30) days of enactment.

         6.6 Termination of Employees.  The Company shall have provided Alvarion
with evidence, reasonably satisfactory to Alvarion, as to the termination of all
Hired Employees and its compliance with the provisions of Section 5.3(a).

         6.7 Financial Condition.  The total amount of Current Assets, Long Term
Accounts  Receivable and Inventory as of the Closing Date,  shall be equal to or
exceed the

                                       34
<PAGE>

Assumed  Liabilities,  as  jointly  determined  by the  Company's  auditors  and
Alvarion's auditors and as reflected in the Draft Pro-forma Report.

         6.8 No Material  Deterioration.  No material deterioration has occurred
in the business  condition of the Company from the Effective  Date and until the
Closing  Date (such  materiality  to be  determined  vis-a-vis  the value of the
transaction).

SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND ECI.

         The  obligations  of  each of ECI and the  Company  to  consummate  the
transactions contemplated by this Agreement are subject to the satisfaction,  on
or prior to the Closing, of the following  conditions any or all of which may be
waived in writing by ECI and the Company:

         7.1  Accuracy  of  Representations.  Each  of the  representations  and
warranties made by Alvarion in this Agreement shall have been accurate as of the
date of this Agreement,  and shall be accurate as of the Closing Date as if made
on the Closing Date.

         7.2 Performance of Covenants. All of the covenants and obligations that
Alvarion  is  required  to comply  with or to perform at or prior to the Closing
Date shall have been complied with and performed in all respects.

         7.3  Documents.  The Company and ECI shall have  received the following
documents, each of which shall be in full force and effect:

         (a) A  certificate  executed  by  Alvarion's  Chief  Executive  Officer
(without personal liability  therefor)  certifying that the conditions set forth
in  Sections  7.1 and 7.2  have  been  duly  satisfied  (the  "Alvarion  Closing
Certificate"),  which Alvarion  Closing  Certificate  shall be in full force and
effect; and

         (b) The  Cooperation  Agreement  in the  form  of  Annex  5.9(b),  duly
executed by Alvarion; and

         (c) A legal  opinion  of  Naschitz,  Brandes & Co.,  Adv.,  in the form
attached hereto as Annex 7.3(c),  addressed to ECI and the Company, and dated as
of the Closing Date.

         (d)  Certified  copies  of  resolutions  of the Board of  Directors  of
Alvarion,  authorizing  and approving the Agreement and the  consummation of the
transactions contemplated by the Agreement in customary form.

         7.4 No  Restraints.  No temporary  restraining  order,  preliminary  or
permanent   injunction  or  other  order  preventing  the  consummation  of  the
transactions  contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement  enacted or deemed  applicable to the  transactions  contemplated by
this Agreement that makes consummation of the transactions  contemplated by this
Agreement  illegal,  which Legal  Requirement shall not have been removed within
(30) days of enactment.

         7.5 Consents.  All Consents  required to be obtained in connection with
the  transactions  contemplated  by this Agreement  shall have been obtained and
shall be in full force and  effect;  provided  that ECI and the  Company  hereby
authorize and empower Alvarion to take any action in order to obtain any Consent
that has not been  obtained  by the

                                       35
<PAGE>

Company or ECI within a reasonable time if Alvarion  believes that it can obtain
such  Consent  within a  reasonable  time,  and ECI and the Company  will assist
Alvarion in any reasonable way to facilitate the foregoing.

         7.6  Approved  Enterprise  Status.  Alvarion  shall  have  assumed  the
Company's  "approved  enterprise"  status with respect to the Company's plant in
Omer,  and all rights and  obligations  associated  therewith  as of the Closing
Date, pursuant to the a specific Approval Certificate (- Ktav Ishur) relating to
such plant, that is to be granted by the Investment  Center, and subject to such
terms as shall be approved by Alvarion in its sole discretion.

         7.7  Performance  Bonds.  Alvarion  shall have assumed the  Performance
Bonds and shall have caused the release of ECI and the Company  from any and all
liability under the Performance Bonds.

SECTION 8. TERMINATION.

         8.1  Right  of  Termination  Without  Breach.  This  Agreement  may  be
terminated prior to the Closing:

         (a) Without further  liability to any party, by either ECI, the Company
or Alvarion if (i) a court of competent  jurisdiction or Governmental Body shall
have issued an order,  decree or ruling or taken any other action  (which order,
decree or ruling the parties  hereto  shall use their best  efforts to lift) and
such was not at the request of the party seeking  termination  of the Agreement,
in each case  permanently  restraining,  enjoining or otherwise  prohibiting the
transactions  contemplated by this Agreement,  and such order, decree, ruling or
other action shall have become final and non-appealable; or (ii) the Closing has
not taken place  within 3 months of the  execution of this  Agreement  (provided
that the  Closing  has not been  delayed  due to such  party's  wrongful  act or
omission); or

         (b) by the mutual consent of Alvarion and the Company.

         8.1A Right of Termination for Breach

         (a) Termination by Alvarion. If, prior to Closing, (i) there has been a
material  violation  or breach by ECI or the  Company of any of the  agreements,
representations  or warranties  contained in this Agreement and referring to the
date hereof, which has not been waived in writing by Alvarion, or (ii) there has
been a failure of  satisfaction  of a condition to the  obligations of Alvarion,
which has not been so waived,  then Alvarion  may, by written  notice to ECI and
the Company reasonably specifying the nature of the breach or failure, terminate
this Agreement.

         (b) Termination by ECI and the Company. If, prior to Closing, (i) there
has been a material  violation  or breach by Alvarion of any of the  agreements,
representations  or warranties  contained in this Agreement and referring to the
date  hereof,  which has not been waived in writing by ECI and the  Company,  or
(ii) there has been a failure of  satisfaction of a condition to the obligations
of ECI and the Company,  which has not been so waived,  then ECI and the Company
may,  by written  notice to  Alvarion  reasonably  specifying  the nature of the
breach or failure, terminate this Agreement.

         8.2  Termination  Procedures.  If either party wishes to terminate this
Agreement  pursuant to Section 8.1 or Section  8.1A,  it shall deliver all other
parties a written  notice

                                       36
<PAGE>

stating its  request to  terminate  this  Agreement  and  setting  forth a brief
description  of the basis on which such party  requests the  termination of this
Agreement.

         8.3 Effect of Termination.  If this Agreement is terminated pursuant to
Section 8.1 or 8.1A, all further obligations of the parties under this Agreement
shall  terminate;  provided,  however,  that:  (a) none of the  Company,  ECI or
Alvarion shall be relieved of any obligation or liability arising from any prior
breach  (if  any) by such  party of any  provision  of this  Agreement;  (b) the
parties shall, in all events,  remain bound by and continue to be subject to the
provisions set forth in Sections 5.2, 5.8 and 10.

SECTION 9. INDEMNIFICATION.

         9.1 Survival of Representations, Etc.

         (a) The  representations  and  warranties  made by the  Company and ECI
(including  the  representations  and  warranties set forth in Section 2 and the
representations  and  warranties set forth in the Company  Closing  Certificate)
shall  survive the Closing and shall expire on the 18-month  anniversary  of the
Closing Date (such period, the "Survival Period");  provided,  however, that if,
at any time prior to the  termination  of the Survival  Period,  any  Indemnitee
(acting  in good  faith)  delivers  to ECI a written  notice (a "Claim  Notice")
alleging  the  existence  of  an  inaccuracy  in  or a  breach  of  any  of  the
representations and warranties made by the Company and ECI (and setting forth in
reasonable detail the basis for such Indemnitee's belief that such an inaccuracy
or breach may exist) and asserting a claim for recovery  under Section 9.2 based
on such alleged inaccuracy or breach, then the claim asserted as aforesaid shall
survive the  termination of the Survival Period until such time as such claim is
fully and finally  resolved;  and  provided  further  that ECI's  obligation  to
indemnify  Alvarion in full (i) for any tax  liabilities  relating to the period
prior to the Closing Date;  (ii) for breach of ECI's covenant in Section 5.7(d);
(iii) for any loss  sustained  by Alvarion as a result of any claim with respect
to the GVT Agreements  relating to the period prior to Alvarion's  assumption of
the GVT  Agreements  as set forth in 5.7(e);  (iv) for the non payment of any of
the  Company's  Accounts  Receivable  from,  and balance  with,  GVT,  which are
presented on the Company's  financial  statements for the date of the Closing as
set forth in 5.7(e),  (v) for any claim or Damage related to any of the Retained
Liabilities set forth in Section 1.4 hereof;  and (vi) for any claim that may be
made by Lucent that the Purchased  Assets infringe the following  patents (a) US
4,677,423, and (b) US 4,551,581 and any corresponding patent thereof,  including
any divisional,  continuation,  re-examined and re-issued patents thereof, shall
survive the  termination of the Survival  Period and shall remain in perpetuity;
provided,  however,  that  Alvarion  delivers  a  written  notice  alleging  the
existence of an inaccuracy or breach (and setting forth in reasonable detail the
basis for  Alvarion's  belief that such an  inaccuracy  or breach may exist) and
asserting  a claim  for  recovery  under  Section  9.2  based  on  such  alleged
inaccuracy or breach,  within 30 days after becoming aware of such inaccuracy or
breach; and provided further,  however,  that nothing herein shall derogate from
application of the Israeli Statute of Limitations to the obligations of Alvarion
or to any claims arising from such inaccuracy or breach.

         (b) The representations,  warranties,  covenants and obligations of the
Company  and ECI,  and the  rights and  remedies  that may be  exercised  by the
Indemnitees, shall not be limited or otherwise affected by or as a result of any
information  furnished to, or any investigation  made by or knowledge of, any of
the Indemnitees or any of their  Representatives  or by the  consummation of the
transaction contemplated by this Agreement.

                                       37
<PAGE>

         (c) For  purposes of this  Agreement,  each  statement or other item of
information  set  forth  in the  Disclosure  Schedule  or in any  update  to the
Disclosure  Schedule shall be deemed to be a representation and warranty made by
the Company and ECI in this Agreement.

         (d) The  representations and warranties made by Alvarion (including the
representations  and warranties  set forth in Section 3 and the  representations
and warranties set forth in the Alvarion Closing  Certificate) shall survive the
Closing and shall expire on the  termination of the Survival  Period;  provided,
however,  that if, at any time prior to the termination of the Survival  Period,
ECI or the Company  (acting in good faith)  shall  deliver to Alvarion a written
notice  alleging  the  existence of an  inaccuracy  in or a breach of any of the
representations and warranties made by Alvarion (and setting forth in reasonable
detail the basis for ECI's or the  Company's  belief that such an  inaccuracy or
breach may exist) and asserting a claim for recovery  under Section 9.2 based on
such alleged inaccuracy or breach,  then the claim asserted in such notice shall
survive the  termination of the Survival Period until such time as such claim is
fully and finally resolved.

         (e) The  representations,  warranties,  covenants  and  obligations  of
Alvarion,  and the  rights  and  remedies  that may be  exercised  by ECI or the
Company,  shall not be limited or  otherwise  affected  by or as a result of any
information  furnished to, or any investigation  made by or knowledge of, ECI or
the Company.

         9.2 Indemnification.

         (a) From and after the Closing  Date (but  subject to Section  9.1(a)),
the Indemnitees may seek  indemnification  from ECI, for any Damages (other than
consequential  damages) that are suffered or incurred by any of the  Indemnitees
or to which any of the Indemnitees may otherwise  become subject  (regardless of
whether or not such  Damages  relate to any  third-party  claim) and which arise
from or as a result of, or are connected  with:  (i) any inaccuracy in or breach
of any  representation  or  warranty  set forth in  Section 2 or in the  Company
Closing  Certificate,  to the extent it  affects  or  relates  to the  Purchased
Assets, the Assumed  Liabilities,  the Business or the ability of the Company or
ECI to consummate the transactions  contemplated  herein; (ii) any breach of any
covenant or obligation of the Company or ECI  (including the covenants set forth
in  Sections 4 and 5), to the  extent it  affects  or  relates to the  Purchased
Assets, the Assumed  Liabilities,  the Business or the ability of the Company or
ECI to  consummate  the  transactions  contemplated  herein;  (iii) any Retained
Liabilities,  or (iv) any Legal Proceeding  relating to any inaccuracy or breach
of the type referred to in clause "(i)",  "(ii)" or "(iii)" above (including any
Legal Proceeding commenced by any Indemnitee for the purpose of enforcing any of
its rights under this Section 9).

         (b) From and after the Closing  Date (but  subject to section  9.1(d)),
ECI  may  seek  indemnification  from  Alvarion  for  any  Damages  (other  than
consequential  damages) that are suffered or incurred by ECI or to which ECI may
otherwise  become  subject  (regardless of whether or not such Damages relate to
any  third-party  claim) and which arise from or as a result of, or are directly
connected  with:  (i) any  inaccuracy  in or  breach  of any  representation  or
warranty  set  forth  in  Section  3  and  all  claims  concerning  the  Assumed
Liabilities;  or (ii) any Legal Proceeding  relating to any inaccuracy or breach
of the type referred to in clause "(i)" above  (including any Legal  Proceedings
commenced  by ECI for the  purpose of  enforcing  any of its  rights  under this
Section 9).

                                       38
<PAGE>

         9.3 Defense of Third Party  Claims.  In the event of the  assertion  or
commencement  by any  third  party of any  claim or  Legal  Proceeding  (whether
against ECI, the Company,  Alvarion or against any other Person) with respect to
which any of the  Indemnitees,  ECI or the Company  shall have the right to seek
indemnification  pursuant  to this  Section 9, the  following  provisions  shall
apply:

         (a) Notice and Defense.  The party to be indemnified (the  "Indemnified
Party")  will  give  the  party  from  whom   indemnification   is  sought  (the
"Indemnifying  Party")  prompt  written  notice  of  any  such  claim,  and  the
Indemnifying Party will undertake the defense thereof by representatives  chosen
by  it.  The  assumption  of  defense  shall  constitute  an  admission  by  the
Indemnifying Party of its indemnification  obligation  hereunder with respect to
such  claim,  and its  undertaking  to pay  directly  all  Damages  incurred  in
connection  therewith.  Failure  to  give  such  notice  shall  not  affect  the
Indemnifying  Party's  duty or  obligations  under this Section 9, except to the
extent the Indemnifying Party is materially  prejudiced  thereby. So long as the
Indemnifying  Party is defending any such claim actively and in good faith,  the
Indemnified  Party shall not settle such claim. The Indemnified Party shall make
available to the Indemnifying Party or its representatives all records and other
materials  required  by them and in the  possession  or under the control of the
Indemnified Party, for the use of the Indemnifying Party and its representatives
in defending any such claim,  and shall in all other  respects  give  reasonable
cooperation in such defense.

         (b) Failure to Defend. If the Indemnifying  Party,  within a reasonable
time after notice of any such claim,  fails to defend such claim actively and in
good faith,  the Indemnified  Party will (upon further notice) have the right to
undertake the defense,  compromise or settlement of such claim or consent to the
entry of a judgment with respect to such claim, on behalf of and for the account
and risk of the Indemnifying  Party, and the Indemnifying Party shall thereafter
have  no  right  to  challenge  the  Indemnified  Party's  defense,  compromise,
settlement  or consent to judgment;  provided  the  Indemnified  Party  promptly
notifies  the other  party,  and  consults  the other  party in good  faith with
respect to any proposed compromise or settlement.

         (c)  Indemnified  Party's  Rights.  Anything  in this  Section 9 to the
contrary notwithstanding,  (i) if there is a reasonable probability that a claim
may materially and adversely affect the Indemnified Party other than as a result
of money damages or other money payments,  the Indemnified  Party shall have the
right to defend, compromise or settle such claim (other than with respect to the
payment of money damages or money  payments),  and (ii) the  Indemnifying  Party
shall not,  without the written consent of the Indemnified  Party (which consent
shall not be unreasonably withheld), settle or compromise such claim.

         9.4  Exercise  of  Remedies  by  Indemnitees  Other Than  Alvarion.  No
Indemnitee  (other than  Alvarion or any  successor  thereto or assign  thereof)
shall be  permitted  to assert any  indemnification  claim or exercise any other
remedy under this Agreement unless Alvarion (or any successor  thereto or assign
thereof) shall have consented to the assertion of such indemnification  claim or
the  exercise of such other  remedy,  which  consent  shall not be  unreasonably
withheld.

         9.5 Limitation.  A claim may be brought by an Indemnified Party against
the Indemnifying  Party,  only when the amount of alleged damages arising out of
such claim is in excess of  $50,000;  provided  that where such  damages  exceed
$50,000,  the  Indemnified  Party shall be entitled to  indemnification  in full
(with no  deduction  of the  $50,000).  Except with

                                       39
<PAGE>

respect to the obligations specifically set forth in Section 9.1(i) through (vi)
above,  for which no  limitation  in amount shall  apply,  in no event shall the
Company's and ECI's aggregate  liability under this Agreement exceed  $8,500,000
(provided that in the event that a claim that is brought by an Indemnified Party
relates to an item set forth in Section  9.1(i)  through (vi) above but may also
relate to any other Liability of ECI or the Company under this  Agreement,  such
claim shall be deemed to be with respect to an item set forth in Section  9.1(i)
through (vi) above and, accordingly,  will not be limited to the Survival Period
or by such $8,500,000 limitation).

SECTION 10. MISCELLANEOUS PROVISIONS.

         10.1 Further  Assurances.  Each party hereto shall execute and cause to
be delivered to each other party hereto such  instruments  and other  documents,
and shall take such other actions,  as such other party may  reasonably  request
(prior  to,  at or  after  the  Closing)  for the  purpose  of  carrying  out or
evidencing any of the transactions contemplated by this Agreement.

         10.2 Fees and Expenses.

         ECI, the Company and Alvarion  shall each bear and pay all fees,  costs
and expenses  (including legal fees and accounting fees) that have been incurred
or  that  are  incurred  by such  party  in  connection  with  the  transactions
contemplated by this Agreement,  including all fees, costs and expenses incurred
by such  party in  connection  with or by  virtue of (a) the  investigation  and
review  conducted  by  Alvarion  and its  Representatives  with  respect  to the
Company's  business  (and the  furnishing  of  information  to Alvarion  and its
Representatives  in  connection  with such  investigation  and review),  (b) the
negotiation,  preparation and review of this Agreement (including the Disclosure
Schedule) and all agreements,  certificates,  opinions and other instruments and
documents  delivered  or to be  delivered in  connection  with the  transactions
contemplated  by this  Agreement,  and (c) the preparation and submission of any
filing  or notice  required  to be made or given in  connection  with any of the
transactions  contemplated by this  Agreement,  and the obtaining of any Consent
required to be obtained in connection with any of such transactions.

         10.3  Attorneys'  Fees.  If any action or  proceeding  relating to this
Agreement  or the  enforcement  of any  provision  of this  Agreement is brought
against  any party  hereto,  the  prevailing  party shall be entitled to recover
reasonable  attorneys' fees, costs and  disbursements  (in addition to any other
relief to which the prevailing party may be entitled).

         10.4 Notices.  Any notice or other communication  required or permitted
to be delivered to any party under this Agreement  shall be in writing and shall
be deemed  properly  delivered,  given and received when  delivered (by hand, by
registered  mail, by courier or express delivery service or by facsimile) to the
address or facsimile  telephone  number set forth beneath the name of such party
below (or to such other  address  or  facsimile  telephone  number as such party
shall have specified in a written notice given to the other parties hereto):

                                       40
<PAGE>

                  if to Alvarion:

                           Alvarion Ltd.
                           21A HaBarzel St.
                           Tel Aviv 69710
                           Fax: 03-6456222
                           Attn: General Counsel

                           with a copy to:
                           Naschitz, Brandes & Co.
                           5 Tuval Street
                           Tel-Aviv, Israel
                           Fax: +972 3 623 5021
                           Attention: Sharon A. Amir, Adv.

                  if to the Company:

                          InnoWave Wireless Systems Ltd.
                          4 Hashiloach St.
                          Petach Tikva 49170
                          Israel
                          Tel:
                          Fax:
                          Attention:

                          With a copy to

                           Goldfarb, Levy, Eran & Co.
                           2 Ibn Gvirol Street
                           Tel Aviv, Israel
                           Tel: 03-608-9816
                           Fax: 03-608-9908
                           Attention: Michael Heller, Adv.

                          If to ECI

                          ECI Telecom Ltd.
                          30 Hasivim Street
                          Petach Tikva 49517
                          Israel
                          Tel:
                          Fax:
                          Attention:

                          With a copy to

                           Goldfarb, Levy, Eran & Co.
                           2 Ibn Gvirol Street
                           Tel Aviv, Israel
                           Tel: 03-608-9816
                           Fax: 03-608-9908
                           Attention: Michael Heller, Adv.

                                       41
<PAGE>

         10.5 Reserved.

         10.6 Headings.  The boldface  headings  contained in this Agreement are
for  convenience  of  reference  only,  shall not be deemed to be a part of this
Agreement and shall not be referred to in connection  with the  construction  or
interpretation of this Agreement.

         10.7   Counterparts.   This   Agreement  may  be  executed  in  several
counterparts,  each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.

         10.8  Governing  Law. This  Agreement  shall be construed in accordance
with,  and governed in all respects by, the internal laws of the State of Israel
(without giving effect to principles of conflicts of laws).  Any disagreement or
dispute between the parties arising hereunder or in connection  herewith,  which
cannot  be  promptly  resolved  on an  amicable  basis,  shall  be  resolved  by
arbitration by a single arbitrator (the "Arbitrator").  The arbitration shall be
held in Tel Aviv, in accordance  with the laws and  regulations  of the State of
Israel.  The  Arbitrator  shall be selected  by  agreement  of the parties  and,
failing  such  agreement  within ten (10) days  after  either  party  shall have
requested  such  arbitration,  the  Arbitrator  shall  be the  first  one of the
following  potential   arbitrators  that  will  accept  the  nomination  as  the
Arbitrator:  (a) Alex Hartman (b) Yoram Danziger,  or (c) Re'uven Bachar; either
party may approach any of the above potential  arbitrators.  The failure of each
of the above  potential  arbitrators  to accept the nomination as the Arbitrator
within  14 days of a request  by  either  party  shall be  considered  a refusal
enabling the party  seeking the  appointment  of the  Arbitrator to approach the
next  name on the  above  list.  If all  the  above  refuse  the  nomination  as
aforesaid, the Arbitrator shall be appointed by the President of the Israeli Bar
Association. The Arbitrator shall be bound solely by the substantive laws of the
State of Israel  and the terms of this  Agreement  and shall not be bound by any
judicial rules of evidence or procedure.  The Arbitrator's  award shall be final
and  binding  upon the  parties  and shall set  forth,  with  particularity  the
Arbitrator's  findings of fact and  conclusions  of law, and  judgment  upon the
arbitral award may be entered by any court of competent jurisdiction. Unless the
Arbitrator  otherwise  determines,  Alvarion and ECI shall each bear equally the
fees and expenses of the  Arbitrator  and their own expenses in connection  with
the  arbitration.  The Arbitrator  shall ensure that minutes of all  arbitration
meetings will be kept and that copies of such minutes shall be made available to
the parties  promptly after each such meeting and in any event prior to the next
meeting.

         10.9  Successors and Assigns.  This Agreement shall be binding upon the
Company, ECI and their respective  successors and assigns (if any); and Alvarion
and its  successors  and assigns  (if any).  This  Agreement  shall inure to the
benefit  of the  Company,  ECI and the  other  Indemnitees;  and the  respective
successors and assigns (if any) of the foregoing. Except as set forth in Section
1.10,  neither  party may assign any of its rights  under this  Agreement to any
other  Person  without  obtaining  the consent or approval of the other  parties
hereto.

         10.10 Specific  Performance.  The parties to this Agreement agree that,
in the event of any breach or threatened  breach by any party to this  Agreement
of any covenant,

                                       42
<PAGE>

obligation or other provision set forth in this Agreement for the benefit of any
other  party to this  Agreement,  such other  party  shall be  entitled to (a) a
decree or order of specific  performance  or mandamus to enforce the  observance
and  performance of such  covenant,  obligation or other  provision,  and (b) an
injunction restraining such breach or threatened breach.

         10.11 Waiver.

         (a) No failure on the part of any Person to exercise any power,  right,
privilege or remedy under this Agreement, and no delay on the part of any Person
in exercising any power, right, privilege or remedy under this Agreement,  shall
operate as a waiver of such power, right,  privilege or remedy; and no single or
partial  exercise of any such power,  right,  privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.

         (b) No Person  shall be deemed to have waived any claim  arising out of
this Agreement,  or any power, right,  privilege or remedy under this Agreement,
unless the waiver of such claim, power, right,  privilege or remedy is expressly
set forth in a written  instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.

         10.12 Amendments.  This Agreement may not be amended, modified, altered
or  supplemented  other than by means of a written  instrument duly executed and
delivered on behalf of all of the parties hereto.

         10.13 Severability.  In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of  circumstances,
shall be  determined  to be  invalid,  unlawful,  void or  unenforceable  to any
extent,  the remainder of this Agreement,  and the application of such provision
to Persons or circumstances  other than those as to which it is determined to be
invalid,  unlawful,  void or  unenforceable,  shall not be impaired or otherwise
affected and shall  continue to be valid and  enforceable  to the fullest extent
permitted by law.

         10.14 Parties in Interest. Except for the provisions of Section 9, none
of the  provisions  of this  Agreement  are  intended  to provide  any rights or
remedies  to any Person  other  than the  parties  hereto  and their  respective
successors and assigns (if any).

         10.15 Disclosure.  Both the timing and the content of all disclosure to
third parties and public announcements  concerning the transactions provided for
in this Agreement by either ECI, the Company or Alvarion shall be subject to the
approval of the other in all essential  respects,  except that the other party's
approval shall not be required as to any statements and other  information which
Alvarion  and/or ECI may submit to the Securities and Exchange  Commission,  the
Nasdaq  National  Market or that a party may  submit to its  shareholders  or be
required  to make  pursuant  to any rule or  regulation  of the  Securities  and
Exchange Commission or the Nasdaq National Market, or otherwise required by law.

         10.15  Entire  Agreement.  This  Agreement  and  the  other  agreements
referred  to herein set forth the entire  understanding  of the  parties  hereto
relating  to the subject  matter  hereof and  thereof  and  supersede  all prior
agreements and  understandings  among or between any of the parties  relating to
the subject matter hereof and thereof.

         10.16 Construction.

         (a) For purposes of this Agreement,  whenever the context requires: the
singular number shall include

                                       43
<PAGE>

the plural,  and vice versa; the masculine gender shall include the feminine and
neuter  genders;  the feminine  gender shall  include the  masculine  and neuter
genders; and the neuter gender shall include the masculine and feminine genders.

         (b) The  parties  hereto  agree  that any rule of  construction  to the
effect that  ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.

         (c) As used in this Agreement, the words "include" and "including," and
variations  thereof,  shall not be deemed to be terms of limitation,  but rather
shall be deemed to be followed by the words "without limitation."

         (d) Except as otherwise indicated,  all references in this Agreement to
"Sections," "Schedules" and "Exhibits" are intended to refer to Sections of this
Agreement and Schedules and Exhibits to this Agreement.

         10.17 Force  Majeure.  Each party  shall be excused  from any breach or
default  with  respect  to this  Agreement  to the  extent  that the  party  was
prevented from  performance by reason of anything beyond the party's control and
despite such party's  efforts to eliminate such prevention such as an act of any
governmental authority or agency, fire, flood, wind storm, or any act of God, or
the act or omission of any person or entity not controlled by that party ("Force
Majeure").  No party  shall be  liable  to the  other  party for any delay in or
failure of performance  under this  Agreement due to a Force  Majeure.  Any such
delay or failure  shall  extend the period of  performance  to such extent as is
mutually   determined  by  the  parties  to  be  necessary  to  enable  complete
performance by a party if reasonable  diligence is exercised after the causes or
delay or failure have been removed.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       44
<PAGE>

                              [APA Signature Page]

         The parties  hereto have caused  this Asset  Purchase  Agreement  to be
executed and delivered as of the date first above written.

                                ALVARION LTD.

                                By: /s/ Zvi Slonimsky
                                    -----------------------------------
                                Name: Zvi Slonimsky
                                     ----------------------------------
                                Title: CEO
                                       --------------------------------

                                ECI TELECOM LTD.

                                By: /s/ Giora Bitan
                                    -----------------------------------
                                Name: Giora Bitan
                                      ---------------------------------
                                Title: Executive Vice President & Chief
                                       Financial Officer
                                       --------------------------------

                                INNOWAVE ECI WIRELESS SYSTEMS LTD.

                                By: /s/ Hezi Lapid            /s/ Roni Weinberg
                                    -------------------------------------------
                                Name: Hezi Lapid              Roni Weinberg
                                      -----------------------------------------
                                Title: VP & CFO
                                      -----------------------------------------

                                       45
<PAGE>

                                    EXHIBIT A

                               CERTAIN DEFINITIONS

         For purposes of the Agreement (including this Exhibit A):

         Accounts Payable. "Accounts Payable" shall have the meaning ascribed to
such term in Section 1.3(c).

         Accounts  Receivable.  "Accounts  Receivable  shall  mean all  accounts
receivable of the Company, as of the Closing Date, determined in accordance with
U.S. GAAP.

         Acquisition  Transaction.  "Acquisition  Transaction"  shall  mean  any
transaction involving:

         (a) the sale, license,  disposition or acquisition of all or a material
portion of the Company's business or assets;

         (b) the issuance, disposition or acquisition of (i) any shares or other
securities of the Company,  (ii) any option,  call, warrant or right (whether or
not  immediately  exercisable)  to acquire  any share  capital  or other  equity
security  of the Company  (other  than share  options  granted to  employees  in
routine transactions in accordance with the Company's past practices),  or (iii)
any security, instrument or obligation that is or may become convertible into or
exchangeable for any share capital or other equity security of the Company; or

         (c) any merger, consolidation, business combination,  reorganization or
similar transaction involving the Company.

         Affiliate.  "Affiliate"  of a specified  person or entity  shall mean a
person  or  entity   that   directly,   or   indirectly   through  one  or  more
intermediaries,  controls or is controlled  by, or is under common control with,
the  person or entity  specified.  For this  purpose,  "control"  shall mean the
possession  of the direct or indirect  power to direct or cause the direction of
the management and policies of a person or entity, whether through the ownership
of voting securities, by contract or otherwise.

         Agreement. "Agreement" shall mean the Agreement to which this Exhibit A
is attached (including the Disclosure Schedule),  as may be amended from time to
time.

         Alvarion Closing Certificate. "Alvarion Closing Certificate" shall have
the meaning ascribed to such term in Section 7.3(b).

         Arbitrator.  "Arbitrator"  shall have the meaning ascribed to such term
in Section 10.8.

         Assumed Contract. "Assumed Contract" shall have the meaning ascribed to
such term in Section 1.1(g)

         Assumed  Liabilities.  "Assumed  Liabilities"  shall  have the  meaning
ascribed to such term in Section 1.3.

                                       46
<PAGE>

         Audited Financial Statements. "Audited Financial Statements" shall have
the meaning ascribed to such term in Section 2.4(a).

         Brazil Sub.  "Brazil Sub" shall have the meaning  ascribed to such term
in Section 1.1(g).

         Claim Notice.  "Claim  Notice" shall have the meaning  ascribed to such
term in Section 9.1

         Closing.  "Closing"  shall have the  meaning  ascribed  to such term in
Section 1.5.

         Closing Date.  "Closing  Date" shall have the meaning  ascribed to such
term in Section 1.5.

         Company Closing  Certificate.  "Company Closing Certificate" shall have
the meaning ascribed to such term in Section 6.4(e).

         Consent.  "Consent"  shall mean any  approval,  consent,  ratification,
permission, waiver or authorization (including any Governmental Authorization).

         Contract.  "Contract" shall mean any written,  oral or other agreement,
contract,  subcontract,   lease,  understanding,   instrument,  note,  warranty,
insurance policy,  benefit plan or legally binding  commitment or undertaking of
any nature.

         Cooperation Agreement.  "Cooperation  Agreement" shall have the meaning
ascribed to such term in Section 5.9(b).

         Current  Assets.  "Current  Assets" shall have the meaning  ascribed to
such term in Section 1.1(a).

         Damages.  "Damages" shall include any loss, damage, injury,  liability,
claim, demand,  settlement,  judgment, award, fine, penalty, Tax, fee (including
reasonable  attorneys' fees), charge, cost (including costs of investigation) or
expense of any nature.

         Disclosure  Schedule.  "Disclosure  Schedule"  shall mean the  schedule
(dated as of the date of the  Agreement)  delivered to Alvarion on behalf of the
Company and ECI.

         Draft Financial Statements. "Draft Financial Statements" shall have the
meaning ascribed to such term in Section 2.4(a).

         Draft Pro-forma Report. "Draft Pro-forma Report" shall have the meaning
ascribed to such term in Section 2.4(c)

         EDS.  "EDS"  shall have the  meaning  ascribed  to such term in Section
2.4(f)(iii).

         EDS Agreement.  "EDS Agreement" shall have the meaning ascribed to such
term in Section 2.4(f)(iii).

         Encumbrance.  "Encumbrance" shall mean any lien, pledge, hypothecation,
charge,  mortgage,   security  interest,   encumbrance,   claim,   infringement,
interference,  option,  right  of first  refusal,  preemptive  right,  community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset,

                                       47
<PAGE>

any  restriction  on the  receipt of any  income  derived  from any  asset,  any
restriction  on the use of any  asset  and any  restriction  on the  possession,
exercise or transfer of any other attribute of ownership of any asset).

         Entity.  "Entity" shall mean any corporation  (including any non-profit
corporation),   general  partnership,  limited  partnership,  limited  liability
partnership,  joint  venture,  estate,  trust,  company  (including  any limited
liability   company  or  joint  stock  company),   firm  or  other   enterprise,
association, organization or entity.

         Excluded Assets.  "Excluded  Assets" shall have the meaning ascribed to
such term in Section 1.2.

         Final Pro-forma Report. "Final Pro-forma Report" shall have the meaning
ascribed to such term in Section 2.4(c)

         Force Majeure.  "Force Majeure" shall have the meaning ascribed to such
term in Section 10.17.

         Governmental  Authorization.  "Governmental  Authorization"  shall mean
any: (a) permit,  license  (including type approvals),  certificate,  franchise,
permission,  clearance,  registration,  qualification or  authorization  issued,
granted,  given or otherwise  made  available  by or under the  authority of any
Governmental Body or pursuant to any Legal  Requirement;  or (b) right under any
Contract with any Governmental Body.

         Governmental  Body.  "Governmental  Body"  shall mean any:  (a) nation,
state, commonwealth,  province,  territory,  county,  municipality,  district or
other jurisdiction of any nature; (b) national, state, local, municipal, foreign
or other government; or (c) governmental or quasi-governmental  authority of any
nature (including any governmental  division,  department,  agency,  commission,
instrumentality,  official,  organization, unit, body or Entity and any court or
other tribunal).

         GVT.  "GVT"  shall have the  meaning  ascribed  to such term in Section
1.2(e).

         GVT Agreements.  "GVT  Agreements"  shall have the meaning  ascribed to
such term in Section 1.2(e).

         Hired Employees.  "Hired  Employees" shall have the meaning ascribed to
such term in Section 5.3(c).

         Indemnified Party.  "Indemnified Party" shall have the meaning ascribed
to such term in Section 9.3(a).

         Indemnifying  Party.   "Indemnifying  Party"  shall  have  the  meaning
ascribed to such term in Section 9.3(a).

         Indemnitees.  "Indemnitees"  shall  mean  the  following  Persons:  (a)
Alvarion;  (b)  Alvarion's  current and future  Affiliates;  (c) the  respective
Representatives of the Persons referred to in clauses "(a)" and "(b)" above; and
(d) the respective  successors and assigns of the Persons referred to in clauses
"(a)", "(b)" and "(c)" above.

         Inventory.  "Inventory"  all have the meaning  ascribed to such term in
Section 1.1(d).

                                       48
<PAGE>

         Investment Center.  "Investment Center" shall have the meaning ascribed
to such term in Section 1.1(m).

         Key Personnel.  "Key Personnel" shall have the meaning ascribed to such
term in Section 5.3(c).

         Liability.  "Liability"  shall mean any direct or  indirect  liability,
indebtedness,  guaranty,  endorsement,  claim, loss, damage,  deficiency,  cost,
expense,  obligation  or  responsibility,  fixed or  unfixed,  known or unknown,
asserted or unasserted, liquidated or unliquidated, secured or unsecured.

         Liens.  "Liens"  shall mean all  mortgages,  pledges,  liens,  security
interests, conditional and installment sale agreements, encumbrances, charges or
other claims of third parties of any kind.

         Legal  Proceeding.  "Legal  Proceeding"  shall mean any  action,  suit,
litigation,    arbitration,   proceeding   (including   any   civil,   criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination  or  investigation  commenced,  brought,  conducted  or  heard by or
before,  or otherwise  involving,  any court or other  Governmental  Body or any
arbitrator or arbitration panel.

         Legal Requirement.  "Legal Requirement" shall mean any federal,  state,
local,  municipal,  foreign or other law,  statute,  constitution,  principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted,  promulgated,  implemented or otherwise
put into effect by or under the authority of any Governmental Body.

         Long Term Accounts  Receivable.  "Long Term Accounts  Receivable" shall
have the meaning ascribed to such term in Section 1.1(aa).

         Material  Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Company or Alvarion, as the case may be,
if such  violation or other matter  (considered  together with all other matters
that would constitute exceptions to the representations and warranties set forth
in this  Agreement,  but for the presence of "Material  Adverse Effect" or other
materiality   qualifications,   or   any   similar   qualifications,   in   such
representations  and  warranties)  would have a material  adverse  effect on the
Company's or Alvarion's business, condition, assets, liabilities,  operations or
financial  performance.  The  materiality  of an effect  will be  determined  in
relation to the value of the transaction set forth herein,  which value shall be
deemed to be equal to the ECI Consideration.

         Material  Agreements.  "Material  Agreements"  shall  have the  meaning
ascribed to such term in Section 2.10.

         Non Competition  Agreement.  "Non Competition Agreement" shall have the
meaning ascribed to such term in Section 5.7(c).

         Ordinary Shares.  "Ordinary  Shares" shall have the meaning ascribed to
such term in Section 1.7.

         Performance Bonds.  "Performance Bonds" shall have the meaning ascribed
to such term in Section 2.4(f)(vi).

                                       49
<PAGE>

         Person.  "Person"  shall mean any  individual,  Entity or  Governmental
Body.

         Pre - Closing  Period.  "Pre - Closing  Period"  shall have the meaning
ascribed to such term in Section 4.1.

         Products.  "Products"  shall have the meaning  ascribed to such term in
Section 2.21.

         Purchase Consideration. "Purchase Consideration" shall have the meaning
ascribed to such term in Section 1.7.

         Purchased Assets. "Purchased Assets" shall have the meaning ascribed to
such term in Section 1.1.

         Related Party.  "Related Party" shall have the meaning ascribed to such
term in Section 2.18.

         Representatives.  "Representatives"  shall  mean  officers,  directors,
employees, agents, attorneys, accountants, advisors and representatives.

         Retained  Liabilities.  "Retained  Liabilities"  shall have the meaning
ascribed to such term in Section 1.4.

         SCI.  "SCI"  shall have the  meaning  ascribed  to such term in Section
2.4(f)(i).

         Securities Act. "Securities Act" shall mean the Securities Act of 1933,
as amended.

         Synergy Employees.  "Synergy Employees" shall have the meaning ascribed
to such term in Section 5.3(d).

         Synergy  Period.  "Synergy  Period" shall have the meaning  ascribed to
such term in Section 5.3(d).

         Subsidiaries.  "Subsidiaries"  shall have the meaning  ascribed to such
term in Section 2.1(e).

         Supply Agreement. "Supply Agreement" shall have the meaning ascribed to
such term in Section 1.2(e).

         Survival Period.  "Survival  Period" shall have the meaning ascribed to
such term in Section 9.1(a).

         Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax,  gross receipts tax,  value-added  tax,  surtax,  excise tax,
transfer  tax,  stamp tax,  sales tax,  use tax,  property  tax,  business  tax,
withholding tax or payroll tax), levy,  assessment,  tariff, duty (including any
customs duty),  deficiency or fee, and any related  charge or amount  (including
any fine, penalty or interest),  imposed,  assessed or collected by or under the
authority of any Governmental Body.

         Tax Returns. "Tax Returns" shall mean returns,  reports and information
statements  with  respect  to Tax  required  to be filed by or on  behalf of the
Company  with the Israel  Income Tax  Commission,  the  Israel  Value  Added Tax
Authority and any other taxing authority domestic or foreign.

                                       50
<PAGE>

         Volume Sales.  "Volume  Sales" shall have the meaning  ascribed to such
term in Section 2.21

         Warrants.  "Warrants"  shall have the meaning  ascribed to such term in
Section 1.7.

                                       51

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