Document:

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                                                                  EXECUTION COPY
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                                                                    Exhibit 10.4

                            SHAREHOLDERS' AGREEMENT

    AGREEMENT, made as of the 30/th/ day of March, 2000, by and among MIND
C.T.I. Ltd., an Israeli corporation (the "Company"), those persons identified on
the signature page hereof who own beneficially, and those persons who are
employees of the Company who hereafter acquires, Ordinary Shares (as defined
herein) and become parties to this Agreement (collectively, the "Non-Investor
Shareholders"), and the Investors listed on the signature pages hereto as an
investor shareholder, (each individually an "Investor" and collectively, the
"Investors" and, together with the Non-Investor Shareholders, the
"Shareholders").

    WHEREAS, the Investors are acquiring an aggregate of 111,111 Series A
Convertible Preferred Shares ,par value NIS 0.01 per share, of the Company (the
"Series A Preferred Shares") and an aggregate of 27,778 Series B Convertible
Preferred Shares, par value NIS 0.01 per share, of the Company (the "Series B
Preferred Shares"), pursuant to the terms of a Share Purchase Agreement dated as
of the date hereof among the Company, the Investors and the parties thereto (as
defined therein) (the "Purchase Agreement");

    WHEREAS, the Non-Investor Shareholders own an aggregate of  716,822 Voting
Ordinary Shares, par value NIS 0.01 per share (the "Voting Ordinary Shares");
and

    WHEREAS, it is a condition to the obligations of the parties under the
Purchase Agreement that this Agreement be executed by the parties hereto, and
the parties are willing to execute this Agreement and to be bound by the
provisions hereof.

    NOW, THEREFORE, in consideration of the foregoing, the agreements set forth
below, and the parties' desire to provide for continuity of ownership of the
Company to further the interests of the Company and its present and future
shareholders, the parties hereby agree with each other as follows:

    1.   Definition of Shares.  As used in this Agreement, "Shares" shall mean
         --------------------
and include all Voting Ordinary Shares, Non-Voting Ordinary Shares, par value
NIS 0.01 per share (the "Non-Voting Ordinary Shares") and together with the
Voting Ordinary Shares, the "Ordinary Shares") the Series A Preferred Shares,
the Series B Preferred Shares and other equity securities of the Company now
owned or hereafter acquired by a Shareholder including, without limitation,
shares of Common Stock issued upon exercise of options now owned or hereafter
acquired.

    2.   Prohibited Transfers and Other Matters.
         --------------------------------------

         (a) No Non-Investor Shareholder shall sell, assign, transfer, pledge,
hypothecate, mortgage, encumber or dispose of all or any of his, her or its
Shares except in compliance with the terms of this Agreement.  Notwithstanding
anything to the contrary contained in this Agreement, (i) a Non-Investor
Shareholder may transfer without the necessity of prior approval all or any of
his or her Shares by way of gift to his or her spouse, to any of his or her
lineal descendants or ancestors, to any trust for the benefit of any one or more
of such
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Non-Investor Shareholders, or to his or her spouse or his or her lineal
descendants or ancestors, or to any entity in which the Non-Investor Shareholder
retains voting control, provided that the Non-Investor Shareholder also retains
control over the disposition of any such Shares, (ii) a Non-Investor Shareholder
may transfer all or any of his or her Shares by will or the laws of descent and
distribution, and (iii) Lior Salansky may transfer Ordinary Shares held by him
to one or more of the Investors or Yaron Amir, (iv) ADC Teledata Communications
Ltd. ("ADC") may transfer any of its Shares to an affiliate of ADC and (v) Oscar
Gruss & Son Incorporated may transfer its Shares to certain individuals and
entities, all of which are accredited investors; provided that any such
                                                 -------- ----
transferee under clause (i), (ii), (iii), (iv) and (v) of this Section 2(e)
(referred to herein as "Permitted Transferees") shall agree in writing with the
Company and the other Shareholders, as a condition to such transfer, to be bound
by all of the provisions of this Agreement to the same extent as if such
transferee were the Shareholder transferring such Shares.

        (b) No Investor shall sell, assign or transfer any Shares owned by it to
Portal Software, Inc. or Amdocs Ltd. without the prior consent of the Company.

    3.  Right of First Refusal on Dispositions.
        --------------------------------------

        (a) If at any time a Non-Investor Shareholder (a "Selling Non-Investor
Shareholder") desires to sell or otherwise transfer all or any part of his or
her Shares pursuant to a bona fide offer from a third party (the "Proposed
Transferee"), the Selling Non-Investor Shareholder shall submit a written offer
(the "Offer") by delivering the Offer to the other Shareholders (the
"Participating Shareholders") to sell such Shares (the "Offered Shares") to the
Participating Shareholders on the terms and conditions, including price, that
the Selling Non-Investor Shareholder proposes to sell such Offered Shares to the
Proposed Transferee.  The Offer shall disclose the identity of the Proposed
Transferee, the number of Offered Shares proposed to be sold, the total number
of Shares owned by the Selling Non-Investor Shareholder, the terms and
conditions, including price, of the proposed sale, and any other material facts
relating to the proposed sale.  The Offer shall further state (i) that the
Participating Shareholders may acquire in accordance with the provisions of this
Agreement, any of the Offered Shares for the price and upon the other terms and
conditions set forth therein and (ii) if all such Offered Shares are not
purchased by the Participating Shareholders, the Participating Shareholders who
have not purchased any such Offered Shares pursuant to this Section 3 may
exercise their rights provided pursuant to Section 4 hereof.

        (b) Each Participating Shareholder shall have the right to purchase that
number of Offered Shares as shall be equal to the number of Offered Shares
multiplied by a fraction, the numerator of which shall be the number of Shares
which any such Participating Shareholder owns and the denominator of which shall
be the aggregate number of Shares owned by the Participating Shareholders who
elect to purchase the Offered Shares . The amount of such Offered Shares that
each Participating Shareholder is entitled to purchase under this Section 3
shall be referred to as its "Pro Rata Fraction."

        (c) The Participating Shareholders shall have a right of
oversubscription such that if any party fails to accept the Offer as to his or
its full Pro Rata Fraction, the remaining Participating Shareholders shall,
among them, have the right to purchase up to the balance of the

                                      -2-
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remaining Offered Shares not so purchased. The Participating Shareholders may
exercise such right of oversubscription by accepting the Offer for the remaining
Offered Shares as to more than their Pro Rata Fraction. If, as a result thereof,
such oversubscriptions exceed the total number of the Offered Shares available
in respect of such oversubscription privilege, the oversubscribing Participating
Shareholders shall be cut back with respect to over- subscriptions on a pro rata
basis in accordance with their respective Pro Rata Fractions or as they may
otherwise agree among themselves.

         (d) Those Participating Shareholders who desire to purchase all or any
part of the Offered Shares shall communicate in writing their election to
purchase to the Selling Non-Investor Shareholder, which communication shall
state the number of remaining Offered Shares such parties desire to purchase and
shall be provided to the Selling Non-Investor Shareholder within 10 days of the
date the Offer was made.  Such communication shall, when taken in conjunction
with the Offer, be deemed to constitute a valid, legally binding and enforceable
agreement for the sale and purchase of such Offered Shares (subject to the
aforesaid limitations as to the right of the Participating Shareholders to
purchase more than their Pro Rata Fraction).  Sales of such Offered Shares to be
sold to the Participating Shareholders pursuant to this Section 3 shall be made
at the offices of the Company within 60 days following the date the Offer was
made.

         (e) If the Participating Shareholders do not purchase all of the
Offered Shares, all, but not fewer than all, of the Offered Shares may be sold
by the Selling Non-Investor Shareholder at any time within 60 days after the
date the Offer was made, subject to the provisions of Section 4.  Any such sale
shall be to the Proposed Transferee, at not less than the price and upon other
terms and conditions, if any, not more favorable to the Proposed Transferee than
those specified in the Offer.  If the Offered Shares are not sold within such
60-day period, they shall continue to be subject to the requirements of a prior
offer pursuant to this Section 3, and may not be transferred except in
compliance with the provisions of this Section 3.  If Offered Shares are sold
pursuant to this Section 3 to any purchaser who is not a party to this
Agreement, the purchaser of such Offered Shares shall execute a counterpart of
this Agreement as a precondition of the purchase of such Offered Shares and any
Offered Shares sold to such purchaser shall continue to be subject to the
provisions of this Agreement.

         (f) If Offered Shares are sold pursuant to this Section 3 to any
purchaser who is not a party to this Agreement, the purchaser of such Offered
Shares shall execute a counterpart of this Agreement as a precondition of the
purchase of such Offered Shares and any Offered Shares sold to such purchaser
shall continue to be subject to the provisions of this Agreement.

     4.  Right of Participation in Sales.
         -------------------------------

         (a) If at any time any Non-Investor Shareholder, other than ADC,
desires to sell all or any part of the Shares owned by him, her or it to any
third party and those Shares to be transferred have not been purchased by the
Investors under Section 3, each Investor, ADC, Monica Eisinger and Lior Salansky
(collectively, for the purposes of this Agreement, the "Principal Shareholders")
shall have the right to sell to the third party, as a condition to such sale by
the Selling Non-Investor Shareholder, at the same price per share and on the
same terms and conditions as involved in such sale by the Selling Non-Investor
Shareholder, a pro rata portion of
               --- ----

                                      -3-
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the amount of Shares proposed to be sold to the third party. The "pro rata
                                                                  --- ----
portion" of Shares which any Principal Shareholder shall be entitled to sell to
the third party shall be that number of Shares as shall equal the number of
Shares proposed to be sold to the third party multiplied by a fraction, the
numerator of which is the aggregate of all Ordinary Shares which the Principal
Shareholder wishing to participate in the sale then holds or has the right to
acquire upon conversion of the Series A Preferred Shares or the Series B
Preferred Shares then held by such Principal Shareholder, and the denominator of
which is the aggregate of all Ordinary Shares which are held by, or issuable to,
upon conversion of the Series A Preferred Shares or the Series B Preferred
Shares held by, all Principal Shareholders wishing to participate in any sale
under this Section 4, including the Selling Non-Investor Shareholder; provided,
however that until October 6, 2001, the number of Shares that Monica Eisinger
and Lior Salansky shall be entitled to sell to such third party shall be subject
to reduction by the same amount of the increase in the number of Shares that ADC
may sell to such third party such that upon any such sale, ADC shall have the
right, but not the obligation, to sell twice the proportional amount being sold
by Monica Eisinger and Lior Salansky (by way of example, if Monica Eisinger and
Lior Salansky are entitled to sell up to 10% of their Shares, ADC will be
permitted to sell up to 20% of the Shares held by it); provided, further, that
in no event shall the pro rata portion of Shares of any Principal Shareholder,
other than of Monica Eisinger and Lior Salansky, be subject to any such
reduction.

         (b) If the Selling Non-Investor Shareholder wishes to make a sale to a
third party which is subject to this Section 4, the Selling Non-Investor
Shareholder shall, after complying with the provisions of Section 3, give to
each Principal Shareholder notice of such proposed sale, and stating that all
Shares were not purchased pursuant to the Offer as discussed in Section 3.  Such
notice shall be given at least 20 days prior to the date of the proposed sale to
the third party.  Each Principal Shareholder wishing to so participate in any
sale under this Section 4 shall notify the Selling Non-Investor Shareholder in
writing of such intention within 15 days after such Investor's receipt of the
notice described in the preceding sentence.

         (c) The Selling Non-Investor Shareholder and each participating
Principal Shareholder shall sell to the third party all, or at the option of the
third party, any part of the Shares proposed to be sold by them at not less than
the price and upon other terms and conditions, if any, not more favorable to the
third party than those in the notice provided by the Selling Non-Investor
Shareholder under subparagraph (b) above; provided, however, that any purchase
                                          --------  -------
of less than all of such Shares by the third party shall be made from the
Selling Non-Investor Shareholder and each participating Principal Shareholder
pro rata based upon the relative number of the Shares that the Selling Non-
--- ----
Investor Shareholder and each participating Principal Shareholder is otherwise
entitled to sell pursuant to Section 4(a).

         (d) If any Shares are sold pursuant to this Section 4 to any purchaser
who is not a party to this Agreement, the purchaser of such Shares shall execute
a counterpart of this Agreement as a precondition to the purchase of such Shares
and such Shares shall continue to be subject to the provisions of this
Agreement, with the exception of this Section 4.

    5.   Right of Purchase.
         -----------------

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         (a) The Company hereby grants to the Investors and ADC so long as such
Investor or ADC shall own any Shares, of record or beneficially, the right to
purchase all or part of such Investor's or ADC's pro rata share of New
Securities (as defined below) which the Company, from time to time, proposes to
sell and issue.  Such Investor's or ADC's pro rata share, for purposes of this
purchase right, is the ratio of the number of Ordinary Shares which such
Investor or ADC owns or has the right to acquire from the Company upon
conversion of the Series A Preferred Shares and the Series B Preferred Shares to
the total number of Ordinary Shares then owned by all Investors and ADC and all
Ordinary Shares issuable to Investors upon the conversion of the Series A
Preferred Shares or Series B Preferred Shares held by all Investors.  Each
Investor and ADC shall have a right of over-allotment pursuant to this Section 5
such that to the extent any Investor or ADC does not exercise his or its
purchase right in full hereunder, such additional shares of New Securities which
such Investor or ADC did not purchase may be purchased by the other Investors or
ADC, if applicable.

         (b) For purposes of this Agreement, "New Securities" shall mean any
share capital of the Company whether now authorized or not, and rights, options
or warrants to purchase share capital, and securities of any type whatsoever
that are, or may become convertible into or exchangeable for share capital,
issued on or after the date hereof; provided that the term "New Securities" does
                                    --------
not include (i) Ordinary Shares issued as a stock dividend to holders of
Ordinary Shares or upon any stock split, subdivision or combination of Ordinary
Shares, (ii) Series A Preferred Shares or Series B Preferred Shares issued as a
dividend to holders of Series A Preferred Shares or Series B Preferred Shares or
upon any stock split, subdivision or combination of Series A Preferred Shares
tock or Series B Preferred Shares, (iii) options or warrants (or Ordinary Shares
issuable upon exercise thereof) issued pursuant to the Company's Employee Share
Option Plan in accordance with the terms of the Purchase Agreement, (iv) share
capital, options or warrants to purchase share capital issued in connection with
any acquisition approved by the Board of Directors of the Company, (v) any
options, warrants or share capital approved by the Board of Directors for
issuance in connection with senior financing extended to the Corporation and
(vi) share capital issued pursuant to a registration statement filed under the
Securities Act of 1933, as amended.

         (c) In the event the Company proposes to undertake an issuance of New
Securities, it shall give the Investors and ADC written notice of its intention,
describing the type of New Securities and the price and the terms upon which the
Company proposes to issue the same.  The Investors and ADC shall have 20
business days from the date of receipt of any such notice to agree to purchase
up to each Investor's pro rata share of such New Securities (and any over-
allotment amount pursuant to the operation of Section 5(a) hereof) for the price
and  upon the terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.

         (d) In the event any Investor or ADC fails to exercise in full his or
its purchase right under this Section 5 (after giving effect to the over-
allotment provision of Section 5(a) hereof), the Company shall have 120 days
thereafter to sell the New Securities with respect to which such purchase right
was not exercised, at a price and upon terms no more favorable to the purchasers
thereof than specified in the Company's notice.  To the extent the Company does
not sell all the New Securities offered within said 120 day period, the Company
shall not

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thereafter issue or sell such New Securities without first again offering such
securities to the Investors in the manner provided above.

         (e)   The rights granted to the Investors and ADC under this Section 5
shall expire immediately prior to, and shall not apply in connection with, the
consummation of the first Qualified Public Offering (as defined in Section 10
hereof).

     6.  Election of Directors.
         ---------------------

         (a)   At each annual meeting of the shareholders of the Company, and at
each special meeting of the shareholders of the Company called for the purpose
of electing directors of the Company, and at any time at which shareholders of
the Company shall have the right to, or shall, vote for directors of the
Company, then, and in each event, the Shareholders shall vote all Shares owned
by them for the election of a Board of Directors consisting of five directors,
designated in the manner designated below (subject to adjustment in accordance
with the provisions of this Section 6):

               (i)   one (1) director shall be designated by a majority of the
Shares held by Monica Eisinger, which designee shall initially be Monica
Eisinger;

               (ii)  one (1) director shall be designated by a majority of the
Shares held by Lior Salanksy, which designee shall initially be Lior Salanksy;

               (iii) one (1) director shall be designated by ADC, which designee
shall initially be Ilan Rosen;

               (iv)  one (1) director shall be designated by Summit Ventures V,
L.P., which designee shall initially be Kevin Mohan;

               (v)   one (1) director shall be an individual who is not an
employee, director, consultant or an affiliate of the Company or any of its
shareholders to be designated by (A) Monica Eisinger, for so long as she is
chief executive officer of the Company, subject to the reasonable approval of
each of the other directors, or (B) if Monica Eisinger is not the chief
executive officer of the Company, by unanimous approval of the remaining
directors; and

               (vi)  any director designated pursuant to Sections 6(i), (ii),
(iii) and (iv) shall not be subject to removal without the consent of the party
or parties appointing such director(s) and upon any removal of such director
(including due to the death or disability of such director), the director shall
be replaced by the party or parties electing the removed director.

         (b)   In addition to the persons designated as set forth in Section
6(a) above Summit Ventures V, L.P. shall be entitled to designate two (2)
representatives, ADC shall be entitled to designate one (1) representative, and
Lior Salansky shall be entitled to designate one (1) representative, who shall
be entitled to attend and observe all meetings of the Company's Board of
Directors and shall be entitled to receive all notices and information furnished
by the Company to its Directors and copies of the minutes of all meetings, but
who shall not have voting rights.

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         (c) The Company shall reimburse all reasonable direct costs and
expenses incurred by directors and the representatives entitled to attend the
meetings of the Company's Board of Directors pursuant to Section 6(b) above in
attending meetings of the Board of Directors of the Company.

     7.  Board Committees.   The Shareholders shall take all actions, including
         ----------------
without limitation, the voting of all their Shares, to cause the provisions of
this Section 7 to be satisfied.

         (a) Compensation Committee.  There shall be established at all times
             ----------------------
during the term of this Agreement a Compensation Committee of the Board of
Directors (the "Compensation Committee") which shall be comprised of four
directors as follows:  one of whom shall be the director designated under
Section 6(a)(i); one of whom shall be the director designated under Section
6(a)(ii); one of whom shall be the director designated under Section 6(a)(iii)
and one of whom shall be the director designated under Section 6(a)(iv).  The
Compensation Committee will determine the compensation of all senior employees
and consultants of the Company (including salary, bonus, and benefits) and
provide recommendations to the Board of Directors with respect to the equity
participation of all senior employees and consultants of the Company consistent
with compensation of companies similar to the Company; provided that no member
of the Compensation Committee may vote on his or her own compensation.  The
compensation of senior employees and consultants shall be reviewed by the
Compensation Committee on an annual basis, and the decision by a majority of the
members of the Compensation Committee (which majority shall include the consent
of the director designated as under Section 6(a)(iv)) will control the
Committee's actions.

         (b) Audit Committee.  There shall be established at all times during
             ---------------
the term of this Agreement an Audit Committee of the Board of Directors (the
"Audit Committee") which shall be comprised of three directors as follows:  one
of whom shall be one of the directors designated under Section 6(a)(i); one of
whom shall be the director designated under Section 6(a)(iii); and one of whom
shall be the director designated under Section 6(a)(iv).  The Audit Committee
shall, among other things, select, from time to time, the Company's auditors and
monitor review of the audit process.

     8.  Insurance.  The Company shall at all times uses its best efforts to
         ---------
maintain for the benefit of its officers and directors liability insurance in
scope and amount, and from an insurer, reasonably acceptable to the Investors.

     9.  Term and Effect.  This Agreement shall terminate on the earlier to
         ---------------
occur of (a) immediately prior to consummation of a Qualified Public Offering
(as defined below), (b) such date as all Shares owned by the Investors and their
transferees have been repurchased or redeemed by the Company, or (c) the tenth
anniversary of the date of this Agreement; provided, however that the provisions
of Section 4 hereof shall survive upon the consummation of a Qualified Public
Offering, for any sale of securities resulting in proceeds in excess of
$1,000,000 in any calendar year undertaken by a Non-Investor Shareholder (other
than ADC) for liquidity purposes and; provided, further that upon redemption of
the Series A Preferred Shares and the Series B Preferred Shares, the provisions
of this Agreement shall continue for the benefit of the parties holding Ordinary
Shares. A "Qualified Public Offering" means an underwritten public offering by
the Company of its equity securities pursuant to a registration statement filed
and

                                      -7-
<PAGE>

declared effective under the Securities Act of 1933, as amended (the "Act"), in
which the aggregate proceeds to the Company equal at least $30,000,000. The
parties hereby agree to amend the provisions of Section 6 to conform to the laws
of Israel upon consummation of an initial underwritten public offering by the
Company of its equity securities pursuant to a registration statement filed and
declared effective under the Act which is not a Qualified Public Offering.

    10.  Failure to Deliver Shares.  If any Shareholder becomes obligated to
         -------------------------
sell any Shares to another Shareholder under this Agreement and fails to deliver
such Shares in accordance with the terms of this Agreement, such other
Shareholder may, at its option, in addition to all other remedies it may have,
send to the defaulting Shareholder the purchase price for such Shares as is
herein specified.  Thereupon, the Company, upon written notice to the defaulting
Shareholder, (a) shall cancel on its books the certificate or certificates
representing the Shares to be sold and (b) shall issue, in lieu thereof, in the
name of such other Shareholder, a new certificate or certificates representing
such Shares, and thereupon all of the defaulting Shareholder's rights in and to
such Shares shall terminate.

    11.  Specific Enforcement.  Each Shareholder expressly agrees that the other
         --------------------
Shareholders and the Company may be irreparably damaged if this Agreement is not
specifically enforced.  Upon a breach or threatened breach of the terms,
covenants and/or conditions of this Agreement by any Shareholder, the other
Shareholders and the Company shall, in addition to all other remedies, each be
entitled to apply for a temporary or permanent injunction, and/or a decree for
specific performance, in accordance with the provisions hereof.

    12.  Legend.  Each certificate evidencing any of the Shares now owned or
         ------
hereafter acquired by the Shareholders shall bear in addition to any other
legends required by other agreements or by law a legend substantially as
follows:

    "Any sale, assignment, transfer or other disposition of the shares
    represented by this certificate is restricted by, and subject to, the terms
    and provisions of a certain Shareholders' Agreement dated as of March 30,
    2000.  A copy of said Agreement is on file with the Secretary of the
    Corporation."

    13.  Notices.  Notices given hereunder shall be deemed to have been duly
         -------
given (i) on the date of personal delivery, (ii) one day after deposit with
federal express or other overnight courier, or (iii) on the date of postmark if
mailed by certified or registered mail, return receipt requested, to the party
being notified at his or its address specified on Schedule I hereto or such
                                                  ----------
other address as the addressee may subsequently notify the other parties of in
writing.

    14.  Entire Agreement and Amendments.  This Agreement constitutes the entire
         -------------------------------
agreement of the parties with respect to the subject matter hereof and neither
this Agreement nor any provision hereof may be waived, modified, amended or
terminated except by a written agreement signed by the parties hereto; provided,
                                                                       --------
however, that Investors owning at least a majority of the Shares owned by all
-------
Investors may effect any such waiver, modification, amendment or termination on
behalf of all of the Shareholders; provided that any such action that adversely
effects the Non-Investor Shareholders must similarly affect the rights of the
Investors and; provided, further, that any such amendment or waiver which
adversely affects the

                                      -8-
<PAGE>

rights of ADC hereunder shall require the consent or approval of ADC. Each of
the Shareholders represents that he, she or it is not a party to any other
agreement which would prevent him, her or it from performing his, her or its
obligations hereunder. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.

    15.  Governing Law; Successors and Assigns.  This Agreement shall be
         -------------------------------------
governed by the internal laws of the State of Israel without giving effect to
the conflicts of laws principles thereof and, except as otherwise provided
herein, shall be binding upon the heirs, personal representatives, executors,
administrators, successors and assigns of the parties, provided that no Non-
Investor Shareholder shall be permitted to assign its rights to designate a
director under Section 6 hereof.

    16.  Severability.  If any provision of this Agreement shall be held to be
         ------------
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.

    17.  Captions.  Captions are for convenience only and are not deemed to be
         --------
part of this Agreement.

    18.  Counterparts.  This Agreement may be executed in two or more
         ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

    19.  Termination.  The Company, ADC, Monica Eisinger, Lior Salansky, and
         -----------
Mind Israel Ltd. hereby terminate that certain Investment Agreement dated August
15, 1997 (the "Investment Agreement") and the Letter Agreement dated as October
6, 1999 between the Company, Monica Eisinger and ADC (the "Letter Agreement") as
the terms contained therein are replaced in their entirety by the rights granted
hereunder.  Upon execution of this Agreement, ADC shall have no further rights
under the Investment Agreement and the Letter Agreement.
                                     * * *

                                      -9-
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                            SHAREHOLDERS' AGREEMENT

                          Counterpart Signature Page
                          --------------------------

    IN WITNESS WHEREOF, this Agreement has been executed as an instrument under
SEAL as of the date and year first above written.

                                        COMPANY:

                                        MIND C.T.I. LTD.

                                            /s/ Monica Eisinger
                                        By: ______________________________
                                            Name: Monica Eisinger
                                            Title: President

                                        NON-INVESTOR SHAREHOLDERS:

                                        /s/ Monica Eisinger
                                        _________________________________
                                        Monica Eisinger

                                        /s/ Lior Salansky
                                        _________________________________
                                        Lior Salansky

                                        ADC TELEDATA COMMUNICATIONS LTD.

                                            /s/ Ilan Melamed
                                        By: ______________________________
                                            Name: Ilan Melamed
                                            Title: Chief Executive Officer

                                        /s/ Zeev Braude
                                        _________________________________
                                        Zeev Braude

                                      -10-
<PAGE>

                                        MIND ISRAEL LTD.

                                            /s/ Monica Eisinger
                                        By: ______________________________
                                            Name:
                                            Title:

                                         /s/ Avshalom Radzinsky
                                         _________________________________
                                         Avshalom Radzinsky

                                         /s/ Rafael Newman
                                         _________________________________
                                         Rafael Newman

                                         /s/ Izik Ben Zaken
                                         _________________________________
                                         Izik Ben Zaken

                                         /s/ Idit Maor
                                         _________________________________
                                         Idit Maor

                                         /s/ Shai Wesberg
                                         _________________________________
                                         Shai Wesberg

                                         INVESTORS:

                                        SUMMIT VENTURES V, L.P.

                                        By:  Summit Partners V, L.P.,
                                             its General Partner

                                        By:  Summit Partners, LLC,
                                             its General Partner

                                            /s/ Kevin Mohan
                                        By: ________________________________
                                            Member

                                      -11-
<PAGE>

                                        SUMMIT V COMPANION FUND, L.P.

                                        By:  Summit Partners V, L.P.,
                                        its General Partner

                                        By:  Summit Partners, LLC,
                                        its General Partner

                                            /s/ Kevin Mohan
                                        By: _________________________________
                                            Member

                                      -12-
<PAGE>

                            SHAREHOLDERS' AGREEMENT

                          Counterpart Signature Page
                          --------------------------

     IN WITNESS WHEREOF, this Agreement has been executed as an instrument under
SEAL as of the date and year first above written.

                                           Summit V Advisors Fund, L.P.

                                           By: Summit Partners, LLC
                                           its General Partner

                                               /s/ Kevin Mohan
                                           By: ___________________________
                                               Member

                                           Summit V Advisors Fund (QP), L..P.

                                           By: Summit Partners, LLC,
                                           its General Partner

                                               /s/ Kevin Mohan
                                           By: ___________________________
                                               Member

                                           Summit Investors III, L.P.

                                               /s/ Kevin Mohan
                                           By: ___________________________
                                               General Partner

                                           OSCAR GRUSS & SON INCORPORATED

                                               /s/ Michael Shaoul
                                           By: _________________________________
                                               Name: Michael Shaoul
                                               Title: Executive Vice President

                                      -13-
<PAGE>

                                  SCHEDULE 1
                                  ----------

Company
-------

MIND C.T.I. Ltd.
POB 144
Yokne'am 20692, Israel
Attention: President

Non-Investor Shareholders
-------------------------

Monica Eisinger

_____________________

_____________________

Lior Salansky
19 Snir Street
Yokne-am Elit 20692, Israel

ADC Teledata Communications Ltd.
c/o ADC Telecommunications, Inc.
12501 Whitewater Drive
Minnetonka, MN 55343
Attention: General Counsel

Zeev Braud
_____________________
_____________________

MIND Israel Ltd.
_____________________
_____________________

Avshalom Radzinsky
_____________________
_____________________

Rafael Newman
_____________________
_____________________

                                      -14-
<PAGE>

Izik Ben Zaken
_____________________
_____________________

Idit Maor
_____________________
_____________________

Shai Weisberg
_____________________
_____________________

                                      -15-
<PAGE>

Investors
---------

Summit Ventures V, L.P.
Summit V Companion Fund, L.P.
Summit V Advisors Fund, L.P.
Summit V Advisors Fund (QP), L.P.
Summit Investors III, L.P.
c/o Summit Partners
600 Atlantic Avenue, Suite 2800
Boston, MA 02210-2227
Attn: Kevin Mohan

Oscar Gruss & Son Incorporated
30 Kalisher Street
Tel Aviv, Israel 65257
Attention: Jed Arkin

                                      -16-<PAGE>

                                                                    Exhibit 10.5

EXECUTION COPY
                                ESCROW AGREEMENT

This Escrow Agreement (the "AGREEMENT") is made and entered into as of this 5th
day of April, 2000, by and among LIOR SALANSKY of 19 Snir St. Yokne-am Elit
20692, Israel ("SALANSKY"), OSCAR GRUSS & SON INCORPORATED, with offices at 74
Broad St., New York, NY 10004-2247, YARON AMIR of 73 Kalaniot St., Givat Avni,
ILAN MELAMED, and the individuals listed in Schedule 3.2 attached hereto
(collectively the "PURCHASERS", and each of them individually a "PURCHASER"),
and RAVILLAN, VOLOVELSKY, DINSTEIN, SNEH & CO. Attorneys-at-Law, 76 Rothschild
Blvd., Mozes House, Tel-Aviv, Israel (the "TRUSTEE").

NOW THEREFORE in consideration of their mutual representations and obligations,
the parties hereto have hereby agreed as follows:

1.  DEFENITIONS

     Unless otherwise determined, all capitalized terms used herein shall bear
     the meaning ascribed to them in the Share Purchase Agreement executed
     between the parties hereto and concurrently herewith (the "SHARE PURCHASE
     AGREEMENT").

2.  APPOINTMENT

     Trustee is hereby appointed as a trustee for and on behalf of both Salansky
     and the Purchasers.

3.  SALANSKY'S OBLIGATIONS

    3.1. Upon executing this Agreement, Salansky shall deliver to the Trustee,
         on behalf of the Purchasers, validly executed blank (i) transfer deeds,
         (ii) transfer statements to the Registrar of Companies and (iii) share
         certificates, representing a total of up to 5,853 Ordinary Shares.

    3.2. If the Trustee receives from any party hereto adequate evidence, to
         Trustee's satisfaction (after notifying all other parties of such
         evidence and allowing them to bring forth any additional or contrasting
         evidence), that, within twelve (12) months of the date hereof, the
         Applicable Conversion Value, as defined in the Amended Articles, had
         been adjusted in accordance with the terms of Article 21.4 thereof, and
         is further sufficiently advised by such party of the new value of the
         Applicable Conversion Value subsequent to such adjustment, then the
         Trustee shall complete the transfer deeds, transfer statements and
         share certificates to reflect the transfer from Salansky to the
         Purchasers, for no additional consideration, of Ordinary Shares (to be
         distributed among the Purchasers proportionally to their respective
         maximum portion of additional shares specified in Schedule 3.2) in a
         number
<PAGE>

          equal to the product of (i) 5,853 and (ii) a fraction, the numerator
          of which is the difference between (X) $104.625 and (Y) the Applicable
          Conversion Value after giving effect to the adjustment under Article
          21.4, decreased by 22.5% (the "RETROSPECTIVE PRICE PER SHARE") (down
          to a minimal Retrospective Price Per Share of $83.700 in the event
          that no adjustment had taken place), and the denominator of which is
          the difference between $104.625 and $83.700.

          For illustration purposes only, if Salansky provides evidence that
          within the twelve-month period following the date hereof, the
          Applicable Conversion Price had been increased, for example, from $108
          to $121.5, then the Trustee shall be authorized to take all actions
          and complete all documents held by it in escrow as shall be required
          to perfect the transfer, from Salansky to the Purchasers, of 2,927
          shares, in accordance with the following computation:

          5,853* [$104.625 - ($121.5*0.775) =     2,927
          ---------------------------------
               ($104.625 - $83.700)

          If any of the parties shall demonstrate that, within the twelve-month
          period commencing on the date hereof, the Applicable Conversion Price
          had been increased to $135 (or above), the Trustee shall not transfer
          any additional shares to the Purchasers, and shall return all deeds,
          statements and certificates bestowed therewith back to Salansky upon
          Salansky's first demand.

          If, however, none of the parties shall apply to the Trustee in respect
          of the adjustment of the Applicable Conversion Price within the
          twelve-month period designated above, or shall not attach to such
          application sufficient evidence of both the occurrence and the degree
          of such adjustment in a manner satisfactory to the Trustee (or if the
          Applicable Conversion Price had in fact remained unchanged (or had
          been decreased) under the provisions of the Articles of Association of
          Mind C.T.I. Ltd. (the "COMPANY")), then the Trustee shall, upon the
          expiration of the twelve-month period, transfer all additional 5,853
          to the Purchasers.

4.  REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF TRUSTEE

    4.1.  The Trustee represents and warrants to Salansky and the Purchasers
          that it has full power and authority to execute, deliver and perform
          this Agreement.

    4.2.  The Trustee shall not be entitled to any compensation hereunder, other
          than reimbursement of any expenses, including legal expenses, incurred
          in connection with the performance of its duties hereunder.
<PAGE>

    4.3.  Trustee shall not assign, sub-contract or otherwise transfer this
          Agreement without the prior written consent of Principal Shareholders.

    4.4   Trustee represents, and Salansky hereby acknowledges and recognizes,
          that the Trustee has been involved with the purchase of the Purchased
          Shares and represented several of the Purchasers in relation
          therewith, and has a certain interest in the Purchased Shares and the
          shares in escrow hereunder.

5.  TRUSTEE'S LIABILITY AND INDEMNIFCATION

    5.1.  Liability of Trustee. In performing any of its duties under this
          Agreement, the Trustee shall not be liable to any party for damages,
          losses or expenses, except in the event of gross negligence or willful
          misconduct on its part. Trustee shall not incur any such liability for
          (i) any act or failure to act made or omitted in good faith, or (ii)
          any action taken or omitted in reliance upon any instrument that the
          Trustee shall in good faith believe to be genuine; nor will the
          Trustee be liable or responsible for forgeries, fraud, impersonations,
          or determining the scope of any agent's authority. The Trustee is not
          responsible for determining and verifying the authority of any person
          acting or purporting to act on behalf of the Company or any party to
          this Agreement.

    5.2.  Indemnification of Trustee. Both Salansky and each of the Purchasers
          (and their respective successors and assigns) agree jointly and
          severally to indemnify and hold the Trustee harmless against any and
          all losses, claims, damages, liabilities and expenses, including
          reasonable costs of investigation and disbursements that may be
          imposed on the Trustee or incurred by it in connection with the
          performance of its duties under this Agreement, including but not
          limited to any arbitration or litigation arising from this Agreement
          or involving its subject matter.

6.  NOTICES

     All notices or other communications hereunder shall be in writing and shall
     be given in person, by registered mail (registered air mail if mailed
     internationally), by an overnight courier service which obtains a receipt
     to evidence delivery, or by facsimile transmission (provided that written
     confirmation of receipt is provided), addressed as set forth in the
     preamble above, or such other address as any party may designate to the
     other in accordance with the aforesaid procedure.  All notices and other
     communications delivered in person or by courier service shall be deemed to
     have been given as of three business days after sending thereof, those
     given by facsimile transmission shall be deemed given twenty-four hours
     following transmission, provided a confirmation copy is sent by registered
     mail, and all notices and other communications sent by registered mail
     shall be deemed given five (5) days after posting.
<PAGE>

7.   GENERAL

    7.1. The entire agreement between the parties with respect to the subject
         matter hereof is contained in this Agreement. This Agreement supersedes
         all prior oral and written proposals and communications related to this
         Agreement between the parties.

    7.2. No provision of this Agreement shall be deemed waived, amended or
         modified by either party unless such waiver, amendment or modification
         is expressly claimed.

    7.3  Any provision of this Agreement which is unenforceable under the laws
         of any jurisdiction which are applicable hereto shall be ineffective to
         the extent such laws apply without invalidating the remaining
         provisions of the Agreement.

    7.4. All section headings herein are inserted for convenience only and shall
         not modify or affect the construction or interpretation of any
         provision of this Agreement.

    7.5. Governing Law. This Agreement shall be governed by and construed in
         accordance with the laws, and subject to the jurisdiction of the Courts
         of the State of Israel.

IN WITNESS WHEREOF, the authorized representatives of the parties hereto have
executed this agreement on the dates set first above:

/s/ Ravillan, Volovelsky, Dinstein, Sneh & Co.
______________________________________________
RAVILLAN, VOLOVELSKY, DINSTEIN, SNEH & CO.
ATTORNEYS-AT-LAW
<PAGE>

                                  SCHEDULE 3.2
                                  ------------
                                 (Page 1 of 2)
                  of the Escrow Agreement dated April 6th 2000

                      Signature Page and Allocation Table
                      -----------------------------------

                        Maximum Number of
Name of Purchaser       Additional Shares          Signature
--------------------  ---------------------  ---------------------

Rochelle Sivan                           48  /s/ Rochelle Sivan
-------------------------------------------  ---------------------

Gabi Bar Haim                            48  /s/ Gabi Bar Haim
-------------------------------------------  ---------------------

Zadok Eyal                               72  /s/ Zadok Eyal
-------------------------------------------  ---------------------

Ami Arel                                119  /s/ Ami Arel
-------------------------------------------  ---------------------

Gal Miara                               119  /s/ Gal Miara
-------------------------------------------  ---------------------

Sagee Aran                              119  /s/ Sagee Aran
-------------------------------------------  ---------------------

Shako Eli                               119  /s/ Shako Eli
-------------------------------------------  ---------------------

Eyal Oren                               119  /s/ Eyal Oren
-------------------------------------------  ---------------------

Sharli Bencherit                        191  /s/ Sharli Bendrerit
-------------------------------------------  ---------------------

Yuval Sarig                             239  /s/ Yuval Sarig
-------------------------------------------  ---------------------

Arie Ganot                              239  /s/ Arie Ganot
-------------------------------------------  ---------------------

Tudor Group Inc.                        239  /s/ Eitan Lombard
-------------------------------------------  ---------------------
<PAGE>

                                  SCHEDULE 3.2
                                  ------------
                                 (Page 2 of 2)
                  of the Escrow Agreement dated April 6th 2000

                      Signature Page and Allocation Table
                      -----------------------------------

Yossi Azmon                             239  /s/ Yossi Azmon
-------------------------------------------  ------------------

David Shemla                            239  /s/ David Shemla
-------------------------------------------  ------------------

Gadi Lidror                             239  /s/ Gadi Lidror
-------------------------------------------  ------------------

Ilan Melamed                            358  /s/ Ilan Melamed
-------------------------------------------  ------------------

Yaron Amir                              478  /s/ Yaron Amir
-------------------------------------------  ------------------

Oscar Gruss & Son                     2,629
 Incorporated                                /s/ Michael Shaoul
-------------------------------------------  ------------------

Total                                 5,853
------------------------------------------------------------------

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