Document:

20-F

Exhibit 4.7  

SHARE PURCHASE
AGREEMENT  

        This
Share Purchase Agreement is made and entered into effective as of March 5, 2006 by and
among BVR Systems (1998) Ltd. (“BVR”), a company organized under the laws
of the State of Israel, with offices at 16 Hamelacha Street, Rosh Ha’ayin, Israel,
and Nir Dor acting on behalf of a limited partnership (in formation) (the
“Purchaser”). 

	WHEREAS 		The
Purchaser desires to acquire shares in BVR, and BVR wishes to issue and sell to the
Purchaser shares in BVR on the terms as set forth herein.  

Accordingly, in consideration of the
covenants and conditions hereinafter set forth, the parties hereto agree as follows: 

	1.  	Agreement
to Purchase and Sell  

	1.1 	Shares.
Subject to and in accordance with the terms and conditions of this Agreement, BVR shall
issue, and the Purchaser shall purchase 20,000,000 Ordinary Shares of BVR (the “Shares”),
nominal value NIS 1.00 each, at a price per share of $0.18 (eighteen cents) at an
aggregate consideration of $3,600,000 (three million six hundred thousand dollars) (the
“Purchase Price”). 

	1.2 	Warrant. Subject
to and in accordance with the terms and conditions of this Agreement, at the Closing BVR
shall issue to the Purchaser three warrants (the “Warrants”) to purchase, in
the aggregate, 18,000,000 Ordinary Shares (the “Warrant Shares”). Forms of the
Warrants are attached hereto as Exhibit 1.2. 

	2.  	Closing  

	2.1  	Closing
Date. The Closing of the transaction contemplated hereby (the "Closing") shall take
place on March 21, 2006 at 14:00 o'clock, at the offices of Yigal Arnon & Co., 1
Azrieli Center, Round Building, 46th Floor, Tel Aviv, Israel. 

	2.2 	Transfer
of Funds and Issuance of Certificate. At the Closing, the Purchaser shall transfer to
BVR the Purchase Price, by wire transfer into the account of BVR, Bank Hapoalim, Branch
615, Account #330330. 

	2.3  	At
the Closing BVR shall deliver to the Purchaser the following documents:

	 	(i) 	Resolutions
of BVR’s Board of Directors approving the execution and                performance
of this Agreement including the issuance of the Shares and the                Warrants
and the appointment of Mr. Nir Dor as a director of BVR until the next
               annual shareholders meeting of BVR; 

	 	(ii) 	The
Warrants dully executed; 

	 	(iii) 	Approval
of the Investment Center, if required. 

	2.4 	BVR
hereby agrees, undertakes and covenants that it shall promptly after the Closing, but in
no event later than within 2 days thereafter record such issuance of the Shares and
Warrant in the name of the Purchaser on the records of BVR and in the Companies Registrar
and no later than 15 days thereafter provide the Purchaser with the share certificate
representing the Shares. 

	3.  	Representations
and Warranties of BVR.  

	 	
BVR
hereby represents and warrants to the Purchaser as follows:  

	3.1  	Organization;
Power; etc.  

	(a) 	BVR
is a company duly organized and validly existing under the laws of the State           of
Israel. 

	(b) 	BVR
has the requisite power and authority to execute, deliver and perform this
          Agreement and to consummate the transactions contemplated hereby. The
execution,           delivery and performance by BVR of this Agreement and consummation
of the           transactions contemplated hereby have been duly authorized by all
necessary           corporate actions of BVR. Following the execution of this Agreement,
this           Agreement will constitute a valid and binding obligation of BVR,
enforceable in           accordance with its terms. Except for the approvals of the
Office of the Chief           Scientist and the Investment Center no consent or other
approval is necessary           for the consummation of the transactions contemplated
hereby or the           implementation thereof. 

	3.2 	Capitalization.
The authorized capitalization of BVR on the date of the Closing shall be 200,000,000 New
Israeli Shekel divided to 200,000,000 Ordinary Shares, par value NIS 1.00 each. Enclosed
as Exhibit 3.2 hereto is a capitalization table of the Company showing all of the
outstanding shares of the Company and all outstanding or enforceable subscriptions, calls
or convertible securities on the date hereof; notwithstanding the above the
capitalization table does not include the issuance of 11,111,111 Ordinary Shares of BVR,
par value NIS 1.00 each, to the shareholder of Blueridge Simulation Inc., which is
currently under negotiations. All of the outstanding Ordinary Shares have been validly
issued and are fully paid and non-assessable with no personal liability attaching to the
ownership thereof. 

	3.3 	Title
of Shares. The Shares of BVR which will be issued to the Purchaser according to this
Agreement, will be duly authorized, validly issued, fully paid, and non assessable, and
free and clear of liens, security interests, pledges, charges, claims, encumbrances,
pre-emptive rights or any other third party rights. 

	3.4 	Securities
Exchange Commission. All reports and statements required to be filed by BVR, with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), have been filed and all such reports and
statements conformed in all material respects with the applicable requirements of the
Exchange Act and any pertinent rules and regulations thereunder, and did not, as of the
respective dates thereof, contain any untrue statement of any material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein not materially misleading. 

	4.  	Representations
and Warranties of the Purchaser.  

	 	
The
Purchaser hereby represents and warrants to BVR as follows:  

	4.1  	Organizations;
Power. 

	 	(a) 	The
Purchaser is a duly organized, validly existing and in good standing under
                    the laws of its state of incorporation. 

	 	(b) 	The
Purchaser has the requisite power and authority to execute, deliver and
                    perform this Agreement and to consummate the transactions
contemplated hereby.                     Following the execution of this Agreement, this
Agreement will constitute a                     valid and binding obligation of the
Purchaser, enforceable in accordance with                     its terms. No consent or
other approval is necessary for the consummation of the                     transaction
contemplated hereby or the implementation thereof. The performance                     by
the Purchaser of its obligations under this Agreement will not constitute, or
                    result in, a breach of any undertaking of the Purchaser. 

	4.2 	Purchase
for Investment. The Purchaser is acquiring the Shares for its own account for
investment and without a view to the distribution or resale of such Shares, it being
understood that this Section 4.2 shall not prevent the Purchaser from selling or
otherwise disposing of any of the Shares in any transaction which does not violate the
Securities Act of 1933, as amended (the “1933 Act”). 

	4.3 	U.S.
Federal Securities Laws. None of the Shares acquired hereunder may be sold,
transferred or otherwise disposed of (any such sale, transfer or other disposition, a
“sale”), except in compliance with (i) United States Federal Securities laws
(which generally provide for a 12 month waiting period before resale of restricted
securities), (ii) state blue sky laws. 

	4.4  	Legend
on Shares.  The  certificate  representing  the Shares  shall be stamped or  otherwise
 imprinted on its face with a          legend in the following form:

	 	
“The
shares represented by this certificate have not been registered under the Securities Act
of 1933 (the “Securities Act”) and may not be sold, transferred, pledged,
hypothecated or otherwise disposed of in the absence of (1) an effective Registration
Statement under the securities act, (2) to the extent applicable, an exemption pursuant to
Rule 144 under Securities Act (or similar rule under the Securities Act relating to the
disposition of securities) or (3) an opinion of counsel, if such opinion shall be
reasonably satisfactory to counsel for issuer, that an exemption from registration under
the Securities Act is available. The Shares have been acquired for investment and may not
be sold, transferred or otherwise disposed of except in compliance with the Securities
Act.” 

	5.  	Certain
Covenants of the Parties.  

	5.1  	Board
of Directors.  

	 	(a) 	BVR
undertakes that, as long as the Purchaser holds at least nine percent (9%)
                    of the outstanding share capital of BVR, a nominee designated in
writing by the                     Purchaser (the “Purchaser’s Nominee”)
shall be appointed as a                     member of the Board of Directors of BVR. 

	 	(b) 	The
Board of Directors of BVR shall appoint Nir Dor as a member of the Board of
                    Directors of BVR for the period commencing on the Closing and
expiring on the                     next annual shareholders meeting of BVR. 

	 	(c) 	For
as long as the Purchaser holds at least nine percent (9%) of the outstanding
                    share capital of BVR, the Board of Directors of BVR will recommend to
the                     shareholders of BVR in the proxy materials prepared for the
annual shareholders                     meeting of BVR, to appoint the Purchaser’s
Nominee as a member of the Board                     of Directors of BVR. 

	5.2 	The
Parties shall use their best efforts, and will cooperate with one another, to secure all
necessary consents, approvals, authorizations and exemptions from governmental agencies
as shall be required in order to consummate the transactions contemplated hereby in
accordance with the terms and conditions hereof. 

	5.3 	From
the date of this Agreement to the Closing, BVR shall (i) provide Purchaser with such
information as Purchaser may from time to time reasonably request with respect to BVR and
the transactions contemplated by this Agreement, (ii) provide Purchaser and its officers,
counsel and other authorized representatives reasonable access during regular business
hours and upon reasonable notice to the properties, books, and records of BVR, or as may
otherwise from time to time reasonably request, and (iii) permit Purchaser to make such
inspections thereof as Purchaser may reasonably request. Notwithstanding the above BVR
shall only be required to provide the above information subject to the Purchaser signing
a non disclosure agreement which is reasonable in the circumstances. 

	6.  	Miscellaneous.  

	6.1 	Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors of the parties hereto; provided, however,
that this Agreement may not be assigned by any party without the prior written consent of
the other party hereto. 

	6.2 	Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original and all of which shall constitute the same
instrument. 

	6.3 	Headings.
The headings of the Sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction hereof. 

	6.4 	No
Waiver. No action taken pursuant to this Agreement, including any investigation by or
on behalf of any party hereto, will be deemed to constitute a waiver by the party taking
any action of compliance with any representation, warranty or agreement contained herein.
The waiver by any party hereto of any condition or of a breach of any other provision of
this Agreement will not operate or be construed as a waiver of any other condition or
subsequent breach. The waiver by any party of any of the conditions precedent to its
obligations under the Agreement will not preclude it from seeking redress for breach of
this Agreement other than with respect to the condition so waived. 

	6.5 	No
Broker. Each of the Parties represents, as to itself, its subsidiaries and its
affiliates, that no agent, broker, investment banker or other firm or person, is or shall
be entitled to any broker’s or finder’s fee or any other commission or similar
fee in connection with this Agreement. 

	6.6 	Notices.
Any notice, request, instruction or other document (each, a “notice”) to be
given hereunder by any party hereto to any other party hereto shall be in writing and
delivered personally, faxed or sent by registered or certified mail, postage prepaid, 

	 	
If
to BVR to: 

	 	
16
Hamelacha Street 

	 	
Rosh
Ha'aying, Israel 

	 	
Fax
number: 972-3-9008040 

	 	
With
a copy to: 

	 	
Yigal
Arnon & Co., 

	 	
1
Azrieli Center, Tel Aviv 

	 	
Fax
number: 972-3-6087713 

	 	
Attention
- Orly Tsioni, Adv. 

	 	
If
to the Purchaser to: 

	 	

	 	
With
a copy to: 

	 	
Erdinast,
Ben Nathan & Co. 

	 	
25
Nachmany Street, Tel Aviv 

	 	
Fax
number: 972-3-5250896 

	 	
Attention:
Giora Erdinast, Adv. 

	6.7  	Governing
Law.  

	 	
The
Laws of the State of Israel shall govern the validity, performance and enforcement of this
Agreement. The parties hereto irrevocably submit to the exclusive jurisdiction of the
Courts of Tel-Aviv in respect of any dispute or matter arising out of or connected with
this Agreement. 

IN WITNESS WHEREOF, each of the
parties hereto has caused this Agreement to be executed on its behalf as of the date first
above written. 

	/s/ Aviv Tzidon

——————————————

/s/ BVR Systems (1998) Ltd.	/s/ Nir Dor

——————————————

Nir Dor

Exhibit 3.2  

	Shareholders	Total	Total %	Options	fully diluted	fully diluted %
	Chun	58,142,608 	60.03%	10,864,444 	69,007,052 	51.54%
	YaronS	456,328 	0.47%	72,000 	528,328 	0.39%
	Polar	3,070,400 	3.17%	1,247,282 	4,317,682 	3.22%
	Koonras	3,181,807 	3.28%	911,678 	4,093,485 	3.06%
	Public	2,084,287 	2.15%	  	2,084,287 	1.56%
	New Investors	17,150,447 	17.71%	7,769,040 	24,919,487 	18.61%
	Bank Leumi	6,111,111 	6.31%	- 	6,111,111 	4.56%
	Bank Hapoalim	3,888,889 	4.01%	1,388,889 	5,277,778 	3.94%
	Industrial Bank	1,111,111 	1.15%	80,000 	1,191,111 	0.89%
	Aviv Tzidon	- 	0.00%	9,000,000 	9,000,000 	6.72%
	Gillies	- 	0.00%	1,000,000 	1,000,000 	0.75%
	ESOP	- 	0.00%	398,300 	398,300 	0.30%
	new ESOP	- 	0.00%	3,721,000 	3,721,000 	2.78%
	Directors	- 	0.00%	576,000 	576,000 	0.43%
	Wise Pte	600,000 	0.62%	  	600,000 	0.45%
	Tact	63,547 	0.07%	  	63,547 	0.05%
	Electra	1,000,000 	1.03%	  	1,000,000 	0.75%
	 	96,860,535 	100.00%	37,028,633 	133,889,168 	100.00%

THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY STATE OR
FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS
WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER
APPLICABLE STATE OR FOREIGN LAW. 

THIS WARRANT IS NOT
TRANSFERABLE  

WARRANT TO PURCHASE ORDINARY
SHARES  

BVR Systems (1998) Ltd., an Israeli
Company (the “Company”), hereby grants to H.S.N. General Managers
Holdings Limited Partnership (the “Holder”), the right to purchase from
the Company 6,000,000 Ordinary Shares of the Company, nominal value NIS 1.00 (the
“Ordinary Shares”), subject to the terms and conditions set forth below,
effective as of March 21, 2006 (the “Effective Date”). 

	1.  	Number
of Ordinary Shares Available for Purchase  

	 	
This
Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares having an aggregate
exercise price in the amount of two million one hundred sixty thousand U.S. Dollars
($2,160,000) (the “Exercise Amount”), at an exercise price per each
Ordinary Share as set forth in Section 2 below, subject to adjustments under Section 7 of
this Warrant (the “Warrant Shares”). 

	2.  	Exercise
Price  

	 	
The
exercise price for each Warrant Share purchasable hereunder shall be equal to 36 Cents
($0.36), subject to adjustments under Section 7 of this Warrant (the “Warrant
Price”). 

	3.  	Term  

	 	
This
Warrant may be exercised, in whole or in part, at any time and from time to time, during
the period beginning on the Effective Date and until March 21, 2009 (the “Exercise
Period”). 

	4.  	Exercise
of Warrant  

	 	
This
Warrant may be exercised in whole or in part on one or more occasions during the Exercise
Period. The Warrant may be exercised by the surrender of the Warrant to the Company at its
principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. 

	 	a. 	Exercise  

	 	
To
exercise this Warrant, the Notice of Exercise must be accompanied by payment in full of
the amount of the aggregate Exercise Amount of the Warrant Shares being purchased upon
such exercise in immediately available funds. 

	 	b. 	Issuance
of Shares on Exercise  

	 	
The
Company agrees that the Warrant Shares so purchased shall be issued as soon as possible
after receipt of the Notice of Exercise and payment of the exercise price and the Holder
shall be deemed the record owner of such Warrant Shares as of and from the close of
business on the date on which this Warrant shall be surrendered, together with payment in
full as required above. In the event of a partial exercise, in accordance with Section 4
above, the Company shall concurrently issue to the Holder a replacement Warrant on the
same terms and conditions as this Warrant, but representing the number of Warrant Shares
remaining after such partial exercise. 

	 	c. 	Mandatory
Exercise  

	 	
In
the event that:  

	 	
(i)
the average closing price of the ordinary shares of the Company equals or
                    exceeds $0.45 per share, during a period of 90 consecutive days (the
                    “Period”); and  

	 	
(ii)
the trade volume of the ordinary shares of the                     Company is at least $1
million during the Period; and  

	 	
(iii)
either the Company                     registered the Holder’s ordinary shares in
the Company or the Warrant                     Shares under the Securities Act of 1933
making such shares transferable without                     any restrictions, or 12
months from the date hereof have elapsed;  

	 	
the
Holder must exercise this Warrant within 14 days from the end of the Period, or the
Warrant will expire (as the sole and only consequence in the event the Holder does not
exercise the Warrant). The Company shall notify the Holder within 2 days of the end of the
Period that the mandatory exercise provisions of this Section 4c. is effective. 

	5.  	Fractional
Interest  

	 	
No
fractional shares will be issued in connection with any exercise hereunder, but in lieu of
such fractional shares the Company shall make cash payment therefor upon the basis of the
current market price of such shares then in effect as determined in good faith by the
Company’s Board of Directors. 

- 2 -

	6.  	Warrant
Confers No Rights of Shareholder  

	 	
Except
as otherwise set forth in this Warrant, the Holder shall not have any rights as a
shareholder of the Company with regard to the Warrant Shares prior to actual exercise
resulting in the purchase of any Warrant Shares. 

	7.  	Adjustment
of Warrant Price and Number of Shares  

	 	
The
number and kind of securities purchasable initially upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows: 

	 	a. 	Adjustment
for Shares Splits and Combinations If the                Company at any
time or from time to time effects a subdivision of the                outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon                exercise of
this Warrant immediately before the subdivision shall be                proportionately
increased, and conversely, if the Company at any time or from                time to time
combines the outstanding Ordinary Shares, the number of Ordinary                Shares
issuable upon exercise of this Warrant immediately before the combination
               shall be proportionately decreased. Any adjustment under this Section 7(a)
shall                become effective at the close of business on the date the
subdivision or                combination becomes effective. 

	 	b. 	Adjustment
for Certain Dividends and Distributions In the                event the
Company at any time, or from time to time makes, or fixes a record                date
for the determination of holders of Ordinary Shares entitled to receive a
               dividend or other distribution payable in additional shares of Ordinary
Shares,                then and in each such event the number of Ordinary Shares issuable
upon exercise                of this Warrant shall be increased as of the time of such
issuance or, in the                event such a record date is fixed, as of the close of
business on such record                date, by multiplying the number of Ordinary Shares
issuable upon exercise of                this Warrant by a fraction: (i) the numerator of
which shall be the total number                of Ordinary Shares issued and outstanding
immediately prior to the time of such                issuance or the close of business on
such record date plus the number of                Ordinary Shares issuable in payment of
such dividend or distribution, and (ii)                the denominator of which is the
total number of shares of Ordinary Shares issued                and outstanding
immediately prior to the time of such issuance or the close of                business on
such record date; provided, however, that if such record date                is
fixed and such dividend is not fully paid or if such distribution is not
               fully made on the date fixed thereof, the number of Ordinary Shares
issuable                upon exercise of this Warrant shall be recomputed accordingly as
of the close of                business on such record date and thereafter the number of
shares of Ordinary                Shares issuable upon exercise of this Warrant shall be
adjusted pursuant to this                Section 7(b) as of the time of actual payment of
such dividends or                distributions. 

- 3 -

	 	c. 	Adjustments
for Other Dividends and Distributions. In the event                the Company at
any time or from time to time makes, or fixes a record date for                the
determination of holders of Ordinary Shares entitled to receive a dividend
               or other distribution payable in securities of the Company other than
Ordinary                Shares, then in each such event provision shall be made so that
the Holder shall                receive upon exercise of this Warrant, in addition to the
number of Ordinary                Shares receivable thereupon, the amount of securities
of the Company that the                Holder would have received had this Warrant been
exercised for Ordinary Shares                immediately prior to such event (or the
record date for such event) and had the                Holder thereafter, during the
period from the date of such event to and                including the date of exercise,
retained such securities receivable by it as                aforesaid during such period,
subject to all other adjustments called for during                such period under this
Section and the Company’s Articles of Association                with respect to the
rights of the Holder. 

	 	d. 	Adjustment
for Reclassification, Exchange and Substitution               If the
Ordinary Shares issuable upon the exercise of this Warrant are changed
               into the same or a different number of shares of any class or classes of
shares,                whether by recapitalization, reclassification or otherwise (other
than a                subdivision or combination of shares or shares dividend provided
for elsewhere                in this Section), then and in any such event the Holder
shall have the right                thereafter to exercise this Warrant into the kind and
amount of shares and other                securities receivable upon such
recapitalization, reclassification or other                change, by holders of the
number of shares of Ordinary Shares for which this                Warrant might have been
exercised immediately prior to such recapitalization,                reclassification or
change, all subject to further adjustment as provided herein                and under the
Company’s Articles of Association. Similar adjustments will                be made
in the event of a consolidation, merger or reorganization of the Company
               with or into, or a sale of all or substantially all of the Company’s
               assets, or substantially all of the Company’s issued and outstanding
share                capital, to, any other company, or any other entity or person. 

	 	e. 	Adjustment
of Warrant Price. Upon each adjustment in the                number of
Ordinary Shares purchasable hereunder, the Warrant Price shall be
               proportionately increased or decreased, as the case may be, in a manner
that is                the inverse of the manner in which the number of Ordinary Shares
purchasable                hereunder shall be adjusted. 

	 	f. 	General
Protection. The Company will not by amendment of                its
Articles of Association or through any reorganization, transfer of assets,
               consolidation, merger, dissolution, issuance or sale of its securities or
any                other voluntary action, avoid or seek to avoid the observance or
performance of                any of the terms to be observed or performed hereunder, or
impair the economic                interest of the Holder, but will at all times in good
faith assist in the                carrying out of all provisions hereof and in taking of
all such actions and                making all such adjustments as may be necessary or
appropriate in order to                protect the rights and economic interest of the
Holder against any impairment. 

- 4 -

	8.  	Representations
and Covenants of the Company. The Company           represents and
warrants as follows: 

	 	a. 	that
all corporate actions on the part of the Company, its officers, directors
               and shareholders necessary for the sale and issuance of the Warrant and
the                Warrant Shares and the performance of the Company’s obligations
hereunder                have been taken and are effective as of the date hereof. 

	 	b. 	All
of the Warrants Shares issuable upon the exercise of this Warrant will, upon
               issuance, be fully paid and nonassessable, and free from all liens,
charges,                preemptive rights, rights of first refusal and similar rights
with respect to                the issue thereof. 

	9.  	Representations
and Warranties by the Holder. The Holder           represents and warrants
to the Company as follows: 

	 	a. 	The
Holder understands that the Warrant and the Warrant Shares have not been
               registered under the Securities Act, or another comparable law, by reason
of                their issuance in a transaction exempt from registration under the
Securities                Act pursuant to Section 4(2) thereof, and that the Holder must
therefore bear                the economic risk of such investment indefinitely, unless
the Warrant Shares                have been registered for resale under the Securities
Act or such resale is                exempted from such registration. The Holder is aware
of the provisions of Rule                144 promulgated under the Securities Act and its
requirements for the resale of                the Warrant Shares which permits limited
resale of shares purchased in a private                placement subject to the
satisfaction of certain conditions, including, among                other things, the
existence of a public market for the shares, the availability                of certain
current public information about the Company, the resale occurring                not
less than one year after a party has purchased and paid for the security to
               be sold, the sale being effected through a “broker’s transaction”               or
in transactions directly with a “market maker” and the number of
               shares being sold during any three-month period not exceeding specified
               limitations. 

	 	b. 	The
Holder has such knowledge and experience in financial and business matters
               that it is capable of evaluating the merits and risks of the purchase of
this                Warrant and Warrant Shares purchasable pursuant to the terms of this
Warrant and                of protecting its interests in connection therewith. The
Holder is able to bear                the economic risk of the purchase of the Warrant
Shares pursuant to the terms of                this Warrant including an entire loss of
the value of such investment. 

- 5 -

	 	c. 	The
Holder understands that the Warrant and the Warrant Shares have not been
               registered under the Securities Act, in part, by reason of a specific
exemption                from the registration provisions of the Act, the availability of
which depends                upon, among other things, the bona fide nature of the
investment intent and the                accuracy of the Holder’s representations as
expressed herein. 

	10.  	Restrictive
Legend  

	 	
The
Holder consents to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance with the
Securities Act. 

	11.  	Loss,
Theft, Destruction or Mutilation of Warrant  

	 	
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant, and in case of loss, theft or destruction, of
indemnity, or security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and cancellation
of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor and dated as of such cancellation, in lieu of such Warrant. 

	12.  	Applicable
Law; Jurisdiction  

	 	
This
Warrant shall be governed by and construed in accordance with the laws of the State of
Israel as applicable to contracts between two residents of the State of Israel entered
into and to be performed entirely within the State of Israel. Any dispute arising under or
in relation to this Warrant shall be resolved exclusively in the competent court for Tel
Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive
jurisdiction of such court. 

	 	
Dated:
March 21, 2006 

	 	
BVR
SYSTEMS (1998) LTD.  

	 	
By:
Aviv Tsidon, CEO and Reuven Shahar, CFO 

- 6 -

NOTICE OF EXERCISE 

To:

BVR Systems (1998) Ltd.

16 Hamelacha Street,

Rosh Ha'ayin

Israel 

	1. 	The
undersigned hereby elects to purchase _________ shares of Ordinary Shares of
          BVR Systems (1998) Ltd., pursuant to the terms of the attached Warrant, (a)
          tenders herewith payment of the purchase price for such shares in full. 

	2.	In
exercising this Warrant, the undersigned hereby confirms and acknowledges the
          representation under Section 9 of the Warrant and that the shares of Ordinary
          Shares are being acquired solely for the account of the undersigned and not as
a           nominee for any other party, or for investment, and that the undersigned will
          not offer, sell or otherwise dispose of any such shares of Ordinary Shares
          except under circumstances that will not result in a violation of the
Securities           Act of 1933, as amended, or any state securities laws. 

	3.	Please
issue a certificate representing said shares of Ordinary Shares in the           name of: 
_________________
_________________
_________________
_________________

	4.  	Please
issue a new Warrant for the unexercised portion of the attached Warrant           in the
name of the undersigned. 

		
		
		
	_________________________	_________________________
	(Date)	(Print Name)
	 
	 	_________________________
	 	(Signature)

- 7 -

THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY STATE OR
FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS
WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER
APPLICABLE STATE OR FOREIGN LAW. 

THIS WARRANT IS NOT
TRANSFERABLE  

WARRANT TO PURCHASE ORDINARY
SHARES  

BVR Systems (1998) Ltd., an Israeli
Company (the “Company”), hereby grants to H.S.N. General Managers
Holdings Limited Partnership (the “Holder”), the right to purchase from
the Company 6,000,000 Ordinary Shares of the Company, nominal value NIS 1.00 (the
“Ordinary Shares”), subject to the terms and conditions set forth below,
effective as of March 21, 2006 (the “Effective Date”). 

	1.  	Number
of Ordinary Shares Available for Purchase  

	 	
This
Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares having an aggregate
exercise price in the amount of three million two hundred forty thousand U.S. Dollars
($3,240,000) (the “Exercise Amount”), at an exercise price per each
Ordinary Share as set forth in Section 2 below, subject to adjustments under Section 7 of
this Warrant (the “Warrant Shares”). 

	2.  	Exercise
Price  

	 	
The
exercise price for each Warrant Share purchasable hereunder shall be equal to 54 Cents
($0.54), subject to adjustments under Section 7 of this Warrant (the “Warrant
Price”). 

	3.  	Term  

	 	
This
Warrant may be exercised, in whole or in part, at any time and from time to time, during
the period beginning on the Effective Date and until March 21, 2009 (the “Exercise
Period”). 

	4.  	Exercise
of Warrant  

	 	
This
Warrant may be exercised in whole or in part on one or more occasions during the Exercise
Period. The Warrant may be exercised by the surrender of the Warrant to the Company at its
principal office together with the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder. 

	 	a. 	Exercise  

	 	
To
exercise this Warrant, the Notice of Exercise must be accompanied by payment in full of
the amount of the aggregate Exercise Amount of the Warrant Shares being purchased upon
such exercise in immediately available funds. 

	 	b. 	Issuance
of Shares on Exercise  

	 	
The
Company agrees that the Warrant Shares so purchased shall be issued as soon as possible
after receipt of the Notice of Exercise and payment of the exercise price and the Holder
shall be deemed the record owner of such Warrant Shares as of and from the close of
business on the date on which this Warrant shall be surrendered, together with payment in
full as required above. In the event of a partial exercise, in accordance with Section 4
above, the Company shall concurrently issue to the Holder a replacement Warrant on the
same terms and conditions as this Warrant, but representing the number of Warrant Shares
remaining after such partial exercise. 

	 	c. 	Mandatory
Exercise  

	 	
In
the event that:  

	 	
(i)
the average closing price of the ordinary shares of the Company equals or
                    exceeds $0.675 per share, during a period of 90 consecutive days (the
                    “Period”); and  

	 	
(ii)
the trade volume of the ordinary shares of the                     Company is at least $1
million during the Period; and  

	 	
(iii)
either the Company                     registered the Holder’s ordinary shares in
the Company or the Warrant                     Shares under the Securities Act of 1933
making such shares transferable without                     any restrictions, or 12
months from the date hereof have elapsed;  

	 	
the
Holder must exercise this Warrant within 14 days from the end of the Period, or the
Warrant will expire (as the sole and only consequence in the event the Holder does not
exercise the Warrant). The Company shall notify the Holder within 2 days of the end of the
Period that the mandatory exercise provisions of this Section 4c. is effective. 

	5.  	Fractional
Interest  

	 	
No
fractional shares will be issued in connection with any exercise hereunder, but in lieu of
such fractional shares the Company shall make cash payment therefor upon the basis of the
current market price of such shares then in effect as determined in good faith by the
Company’s Board of Directors. 

- 2 -

	6.  	Warrant
Confers No Rights of Shareholder  

	 	
Except
as otherwise set forth in this Warrant, the Holder shall not have any rights as a
shareholder of the Company with regard to the Warrant Shares prior to actual exercise
resulting in the purchase of any Warrant Shares. 

	7.  	Adjustment
of Warrant Price and Number of Shares  

	 	
The
number and kind of securities purchasable initially upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows: 

	 	a. 	Adjustment
for Shares Splits and Combinations If the                Company at any
time or from time to time effects a subdivision of the                outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon                exercise of
this Warrant immediately before the subdivision shall be                proportionately
increased, and conversely, if the Company at any time or from                time to time
combines the outstanding Ordinary Shares, the number of Ordinary                Shares
issuable upon exercise of this Warrant immediately before the combination
               shall be proportionately decreased. Any adjustment under this Section 7(a)
shall                become effective at the close of business on the date the
subdivision or                combination becomes effective. 

	 	b. 	Adjustment
for Certain Dividends and Distributions In the                event the
Company at any time, or from time to time makes, or fixes a record                date
for the determination of holders of Ordinary Shares entitled to receive a
               dividend or other distribution payable in additional shares of Ordinary
Shares,                then and in each such event the number of Ordinary Shares issuable
upon exercise                of this Warrant shall be increased as of the time of such
issuance or, in the                event such a record date is fixed, as of the close of
business on such record                date, by multiplying the number of Ordinary Shares
issuable upon exercise of                this Warrant by a fraction: (i) the numerator of
which shall be the total number                of Ordinary Shares issued and outstanding
immediately prior to the time of such                issuance or the close of business on
such record date plus the number of                Ordinary Shares issuable in payment of
such dividend or distribution, and (ii)                the denominator of which is the
total number of shares of Ordinary Shares issued                and outstanding
immediately prior to the time of such issuance or the close of                business on
such record date; provided, however, that if such record date                is
fixed and such dividend is not fully paid or if such distribution is not
               fully made on the date fixed thereof, the number of Ordinary Shares
issuable                upon exercise of this Warrant shall be recomputed accordingly as
of the close of                business on such record date and thereafter the number of
shares of Ordinary                Shares issuable upon exercise of this Warrant shall be
adjusted pursuant to this                Section 7(b) as of the time of actual payment of
such dividends or                distributions. 

- 3 -

	 	c. 	Adjustments
for Other Dividends and Distributions. In the event                the Company at
any time or from time to time makes, or fixes a record date for                the
determination of holders of Ordinary Shares entitled to receive a dividend
               or other distribution payable in securities of the Company other than
Ordinary                Shares, then in each such event provision shall be made so that
the Holder shall                receive upon exercise of this Warrant, in addition to the
number of Ordinary                Shares receivable thereupon, the amount of securities
of the Company that the                Holder would have received had this Warrant been
exercised for Ordinary Shares                immediately prior to such event (or the
record date for such event) and had the                Holder thereafter, during the
period from the date of such event to and                including the date of exercise,
retained such securities receivable by it as                aforesaid during such period,
subject to all other adjustments called for during                such period under this
Section and the Company’s Articles of Association                with respect to the
rights of the Holder. 

	 	d. 	Adjustment
for Reclassification, Exchange and Substitution               If the
Ordinary Shares issuable upon the exercise of this Warrant are changed
               into the same or a different number of shares of any class or classes of
shares,                whether by recapitalization, reclassification or otherwise (other
than a                subdivision or combination of shares or shares dividend provided
for elsewhere                in this Section), then and in any such event the Holder
shall have the right                thereafter to exercise this Warrant into the kind and
amount of shares and other                securities receivable upon such
recapitalization, reclassification or other                change, by holders of the
number of shares of Ordinary Shares for which this                Warrant might have been
exercised immediately prior to such recapitalization,                reclassification or
change, all subject to further adjustment as provided herein                and under the
Company’s Articles of Association. Similar adjustments will                be made
in the event of a consolidation, merger or reorganization of the Company
               with or into, or a sale of all or substantially all of the Company’s
               assets, or substantially all of the Company’s issued and outstanding
share                capital, to, any other company, or any other entity or person. 

	 	e. 	Adjustment
of Warrant Price. Upon each adjustment in the                number of
Ordinary Shares purchasable hereunder, the Warrant Price shall be
               proportionately increased or decreased, as the case may be, in a manner
that is                the inverse of the manner in which the number of Ordinary Shares
purchasable                hereunder shall be adjusted. 

	 	f. 	General
Protection. The Company will not by amendment of                its
Articles of Association or through any reorganization, transfer of assets,
               consolidation, merger, dissolution, issuance or sale of its securities or
any                other voluntary action, avoid or seek to avoid the observance or
performance of                any of the terms to be observed or performed hereunder, or
impair the economic                interest of the Holder, but will at all times in good
faith assist in the                carrying out of all provisions hereof and in taking of
all such actions and                making all such adjustments as may be necessary or
appropriate in order to                protect the rights and economic interest of the
Holder against any impairment. 

- 4 -

	8.  	Representations
and Covenants of the Company. The Company           represents and
warrants as follows: 

	 	a. 	that
all corporate actions on the part of the Company, its officers, directors
               and shareholders necessary for the sale and issuance of the Warrant and
the                Warrant Shares and the performance of the Company’s obligations
hereunder                have been taken and are effective as of the date hereof. 

	 	b. 	All
of the Warrants Shares issuable upon the exercise of this Warrant will, upon
               issuance, be fully paid and nonassessable, and free from all liens,
charges,                preemptive rights, rights of first refusal and similar rights
with respect to                the issue thereof. 

	9.  	Representations
and Warranties by the Holder. The Holder           represents and warrants
to the Company as follows: 

	 	a. 	The
Holder understands that the Warrant and the Warrant Shares have not been
               registered under the Securities Act, or another comparable law, by reason
of                their issuance in a transaction exempt from registration under the
Securities                Act pursuant to Section 4(2) thereof, and that the Holder must
therefore bear                the economic risk of such investment indefinitely, unless
the Warrant Shares                have been registered for resale under the Securities
Act or such resale is                exempted from such registration. The Holder is aware
of the provisions of Rule                144 promulgated under the Securities Act and its
requirements for the resale of                the Warrant Shares which permits limited
resale of shares purchased in a private                placement subject to the
satisfaction of certain conditions, including, among                other things, the
existence of a public market for the shares, the availability                of certain
current public information about the Company, the resale occurring                not
less than one year after a party has purchased and paid for the security to
               be sold, the sale being effected through a “broker’s transaction”               or
in transactions directly with a “market maker” and the number of
               shares being sold during any three-month period not exceeding specified
               limitations. 

	 	b. 	The
Holder has such knowledge and experience in financial and business matters
               that it is capable of evaluating the merits and risks of the purchase of
this                Warrant and Warrant Shares purchasable pursuant to the terms of this
Warrant and                of protecting its interests in connection therewith. The
Holder is able to bear                the economic risk of the purchase of the Warrant
Shares pursuant to the terms of                this Warrant including an entire loss of
the value of such investment. 

- 5 -

	 	c. 	The
Holder understands that the Warrant and the Warrant Shares have not been
               registered under the Securities Act, in part, by reason of a specific
exemption                from the registration provisions of the Act, the availability of
which depends                upon, among other things, the bona fide nature of the
investment intent and the                accuracy of the Holder’s representations as
expressed herein. 

	10.  	Restrictive
Legend  

	 	
The
Holder consents to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance with the
Securities Act. 

	11.  	Loss,
Theft, Destruction or Mutilation of Warrant  

	 	
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant, and in case of loss, theft or destruction, of
indemnity, or security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and cancellation
of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor and dated as of such cancellation, in lieu of such Warrant. 

	12.  	Applicable
Law; Jurisdiction  

	 	
This
Warrant shall be governed by and construed in accordance with the laws of the State of
Israel as applicable to contracts between two residents of the State of Israel entered
into and to be performed entirely within the State of Israel. Any dispute arising under or
in relation to this Warrant shall be resolved exclusively in the competent court for Tel
Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the exclusive
jurisdiction of such court. 

	 	
Dated:
  March  21, 2006 

	 	
BVR
SYSTEMS (1998) LTD. 

	 	
By:
     Aviv Tsidon, CEO and Reuven Shahar, CFO 

- 6 -

NOTICE OF EXERCISE 

To:

BVR Systems (1998) Ltd.

16 Hamelacha Street,

Rosh Ha'ayin

Israel 

	1. 	The
undersigned hereby elects to purchase _________ shares of Ordinary Shares of
          BVR Systems (1998) Ltd., pursuant to the terms of the attached Warrant, (a)
          tenders herewith payment of the purchase price for such shares in full. 

	2. 	In
exercising this Warrant, the undersigned hereby confirms and acknowledges the
          representation under Section 9 of the Warrant and that the shares of Ordinary
          Shares are being acquired solely for the account of the undersigned and not as
a           nominee for any other party, or for investment, and that the undersigned will
          not offer, sell or otherwise dispose of any such shares of Ordinary Shares
          except under circumstances that will not result in a violation of the
Securities           Act of 1933, as amended, or any state securities laws. 

	3. 	Please
issue a certificate representing said shares of Ordinary Shares in the           name of: 
_________________
_________________
_________________
_________________

	4. 	Please
issue a new Warrant for the unexercised portion of the attached Warrant           in the
name of the undersigned. 

		
		
		
	_________________________	_________________________
	(Date)	(Print Name)
	 
	 	_________________________
	 	(Signature)

- 7 -

THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR QUALIFIED UNDER ANY STATE OR
FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS
WARRANT AND/OR SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER
APPLICABLE STATE OR FOREIGN LAW. 

THIS WARRANT IS NOT
TRANSFERABLE  

WARRANT TO PURCHASE ORDINARY
SHARES  

BVR Systems (1998) Ltd., an Israeli
Company (the “Company”), hereby grants to H.S.N. General Managers
Holdings Limited Partnership (the “Holder”), the right to purchase from
the Company 6,000,000 Ordinary Shares of the Company, nominal value NIS 1.00 (the
“Ordinary Shares”), subject to the terms and conditions set forth below,
effective as of March 21, 2006 (the “Effective Date”). 

	1.  	Number
of Ordinary Shares Available for Purchase  

	 	
This
Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares having an aggregate
exercise price in the amount of six million U.S. Dollars ($6,000,000) (the “Exercise
Amount”), at an exercise price per each Ordinary Share as set forth in Section 2
below, subject to adjustments under Section 7 of this Warrant (the “Warrant Shares”).  

	2.  	Exercise
Price  

	 	
The
exercise price for each Warrant Share purchasable hereunder shall be equal to one US
Dollar ($1.00), subject to adjustments under Section 7 of this Warrant (the “Warrant
Price”).  

	3.  	Term

	 	
This
Warrant may be exercised, in whole or in part, at any time and from time to time, during
the period beginning on the Effective Date and until March 21, 2009 (the “Exercise
Period”).  

	4.  	Exercise
of Warrant  

	 	
This
Warrant may be exercised in whole or in part on one or more occasions during the Exercise
Period. The Warrant may be exercised by the surrender of the Warrant to the Company at
its principal office together with the Notice of Exercise annexed hereto duly completed
and executed on behalf of the Holder.  

	 	a. 	Exercise 

	 	
To
exercise this Warrant, the Notice of Exercise must be accompanied by payment in full of
the amount of the aggregate Exercise Amount of the Warrant Shares being purchased upon
such exercise in immediately available funds.  

	 	b. 	Issuance
of Shares on Exercise  

	 	
The
Company agrees that the Warrant Shares so purchased shall be issued as soon as possible
after receipt of the Notice of Exercise and payment of the exercise price and the Holder
shall be deemed the record owner of such Warrant Shares as of and from the close of
business on the date on which this Warrant shall be surrendered, together with payment in
full as required above. In the event of a partial exercise, in accordance with Section 4
above, the Company shall concurrently issue to the Holder a replacement Warrant on the
same terms and conditions as this Warrant, but representing the number of Warrant Shares
remaining after such partial exercise.  

	 	c. 	Mandatory
Exercise  

	 	
In
the event that:  

	 	
(i)
           the average closing price of the ordinary shares of the Company equals or
          exceeds $1.25 per share, during a period of 90 consecutive days (the
          “Period”); and 

(ii) the trade volume of the ordinary shares of the
          Company is at least $1 million during the Period; and 

(iii) either the Company
          registered the Holder’s ordinary shares in the Company or the Warrant
          Shares under the Securities Act of 1933 making such shares transferable without
          any restrictions, or 12 months from the date hereof have elapsed;  

	 	
the
Holder must exercise this Warrant within 14 days from the end of the Period, or the
Warrant will expire (as the sole and only consequence in the event the Holder does not
exercise the Warrant). The Company shall notify the Holder within 2 days of the end of
the Period that the mandatory exercise provisions of this Section 4c. is effective.  

	5.  	Fractional
Interest  

	 	
No
fractional shares will be issued in connection with any exercise hereunder, but in lieu
of such fractional shares the Company shall make cash payment therefor upon the basis of
the current market price of such shares then in effect as determined in good faith by the
Company’s Board of Directors.  

- 2 -

	6.  	Warrant
Confers No Rights of Shareholder  

	 	
Except
as otherwise set forth in this Warrant, the Holder shall not have any rights as a
shareholder of the Company with regard to the Warrant Shares prior to actual exercise
resulting in the purchase of any Warrant Shares.  

	7.  	Adjustment
of Warrant Price and Number of Shares  

	 	
The
number and kind of securities purchasable initially upon the exercise of this Warrant and
the Warrant Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:  

	 	a. 	Adjustment
for Shares Splits and Combinations If the                     Company at
any time or from time to time effects a subdivision of the
                    outstanding Ordinary Shares, the number of Ordinary Shares issuable
upon                     exercise of this Warrant immediately before the subdivision
shall be                     proportionately increased, and conversely, if the Company at
any time or from                     time to time combines the outstanding Ordinary
Shares, the number of Ordinary                     Shares issuable upon exercise of this
Warrant immediately before the combination                     shall be proportionately
decreased. Any adjustment under this Section 7(a) shall                     become
effective at the close of business on the date the subdivision or
                    combination becomes effective. 

	 	b. 	Adjustment
for Certain Dividends and Distributions In the                     event
the Company at any time, or from time to time makes, or fixes a record
                    date for the determination of holders of Ordinary Shares entitled to
receive a                     dividend or other distribution payable in additional shares
of Ordinary Shares,                     then and in each such event the number of
Ordinary Shares issuable upon exercise                     of this Warrant shall be
increased as of the time of such issuance or, in the                     event such a
record date is fixed, as of the close of business on such record
                    date, by multiplying the number of Ordinary Shares issuable upon
exercise of                     this Warrant by a fraction: (i) the numerator of which
shall be the total number                     of Ordinary Shares issued and outstanding
immediately prior to the time of such                     issuance or the close of
business on such record date plus the number of                     Ordinary Shares
issuable in payment of such dividend or distribution, and (ii)                     the
denominator of which is the total number of shares of Ordinary Shares issued
                    and outstanding immediately prior to the time of such issuance or the
close of                     business on such record date; provided, however, that
if such record date                     is fixed and such dividend is not fully paid or
if such distribution is not                     fully made on the date fixed thereof, the
number of Ordinary Shares issuable                     upon exercise of this Warrant
shall be recomputed accordingly as of the close of                     business on such
record date and thereafter the number of shares of Ordinary                     Shares
issuable upon exercise of this Warrant shall be adjusted pursuant to this
                    Section 7(b) as of the time of actual payment of such dividends or
                    distributions. 

- 3 -

	 	c. 	Adjustments
for Other Dividends and Distributions. In the event                     the
Company at any time or from time to time makes, or fixes a record date for
                    the determination of holders of Ordinary Shares entitled to receive a
dividend                     or other distribution payable in securities of the Company
other than Ordinary                     Shares, then in each such event provision shall
be made so that the Holder shall                     receive upon exercise of this
Warrant, in addition to the number of Ordinary                     Shares receivable
thereupon, the amount of securities of the Company that the                     Holder
would have received had this Warrant been exercised for Ordinary Shares
                    immediately prior to such event (or the record date for such event)
and had the                     Holder thereafter, during the period from the date of
such event to and                     including the date of exercise, retained such
securities receivable by it as                     aforesaid during such period, subject
to all other adjustments called for during                     such period under this
Section and the Company’s Articles of Association                     with respect
to the rights of the Holder. 

	 	d. 	Adjustment
for Reclassification, Exchange and Substitution                    If the
Ordinary Shares issuable upon the exercise of this Warrant are changed
                    into the same or a different number of shares of any class or classes
of shares,                     whether by recapitalization, reclassification or otherwise
(other than a                     subdivision or combination of shares or shares dividend
provided for elsewhere                     in this Section), then and in any such event
the Holder shall have the right                     thereafter to exercise this Warrant
into the kind and amount of shares and other                     securities receivable
upon such recapitalization, reclassification or other                     change, by
holders of the number of shares of Ordinary Shares for which this
                    Warrant might have been exercised immediately prior to such
recapitalization,                     reclassification or change, all subject to further
adjustment as provided herein                     and under the Company’s Articles
of Association. Similar adjustments will                     be made in the event of a
consolidation, merger or reorganization of the Company                     with or into,
or a sale of all or substantially all of the Company’s                     assets,
or substantially all of the Company’s issued and outstanding share
                    capital, to, any other company, or any other entity or person. 

	 	e. 	Adjustment
of Warrant Price. Upon each adjustment in the                     number
of Ordinary Shares purchasable hereunder, the Warrant Price shall be
                    proportionately increased or decreased, as the case may be, in a
manner that is                     the inverse of the manner in which the number of
Ordinary Shares purchasable                     hereunder shall be adjusted. 

	 	f. 	General
Protection. The Company will not by amendment of                     its
Articles of Association or through any reorganization, transfer of assets,
                    consolidation, merger, dissolution, issuance or sale of its
securities or any                     other voluntary action, avoid or seek to avoid the
observance or performance of                     any of the terms to be observed or
performed hereunder, or impair the economic                     interest of the Holder,
but will at all times in good faith assist in the                     carrying out of all
provisions hereof and in taking of all such actions and                     making all
such adjustments as may be necessary or appropriate in order to
                    protect the rights and economic interest of the Holder against any
impairment. 

- 4 -

	8. 	Representations
and Covenants of the Company. The Company           represents and
warrants as follows: 

	 	a. 	that
all corporate actions on the part of the Company, its officers, directors
                    and shareholders necessary for the sale and issuance of the Warrant
and the                     Warrant Shares and the performance of the Company’s
obligations hereunder                     have been taken and are effective as of the
date hereof. 

	 	b. 	All
of the Warrants Shares issuable upon the exercise of this Warrant will, upon
                    issuance, be fully paid and nonassessable, and free from all liens,
charges,                     preemptive rights, rights of first refusal and similar
rights with respect to                     the issue thereof. 

	9. 	Representations
and Warranties by the Holder. The Holder           represents and warrants
to the Company as follows: 

	 	a. 	The
Holder understands that the Warrant and the Warrant Shares have not been
                    registered under the Securities Act, or another comparable law, by
reason of                     their issuance in a transaction exempt from registration
under the Securities                     Act pursuant to Section 4(2) thereof, and that
the Holder must therefore bear                     the economic risk of such investment
indefinitely, unless the Warrant Shares                     have been registered for
resale under the Securities Act or such resale is                     exempted from such
registration. The Holder is aware of the provisions of Rule                     144
promulgated under the Securities Act and its requirements for the resale of
                    the Warrant Shares which permits limited resale of shares purchased
in a private                     placement subject to the satisfaction of certain
conditions, including, among                     other things, the existence of a public
market for the shares, the availability                     of certain current public
information about the Company, the resale occurring                     not less than one
year after a party has purchased and paid for the security to                     be
sold, the sale being effected through a “broker’s transaction”                    or
in transactions directly with a “market maker” and the number of
                    shares being sold during any three-month period not exceeding
specified                     limitations. 

	 	b. 	The
Holder has such knowledge and experience in financial and business matters
                    that it is capable of evaluating the merits and risks of the purchase
of this                     Warrant and Warrant Shares purchasable pursuant to the terms
of this Warrant and                     of protecting its interests in connection
therewith. The Holder is able to bear                     the economic risk of the
purchase of the Warrant Shares pursuant to the terms of                     this Warrant
including an entire loss of the value of such investment. 

- 5 -

	 	c. 	The
Holder understands that the Warrant and the Warrant Shares have not been
                    registered under the Securities Act, in part, by reason of a specific
exemption                     from the registration provisions of the Act, the
availability of which depends                     upon, among other things, the bona fide
nature of the investment intent and the                     accuracy of the Holder’s
representations as expressed herein. 

	10.  	Restrictive
Legend  

	 	
The
Holder consents to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance with the
Securities Act.  

	11.  	Loss,
Theft, Destruction or Mutilation of Warrant

	 	
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant, and in case of loss, theft or destruction, of
indemnity, or security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender and
cancellation of such Warrant, if mutilated, the Company will make and deliver a new
Warrant of like tenor and dated as of such cancellation, in lieu of such Warrant.  

	12.  	Applicable
Law; Jurisdiction  

	 	
This
Warrant shall be governed by and construed in accordance with the laws of the State of
Israel as applicable to contracts between two residents of the State of Israel entered
into and to be performed entirely within the State of Israel. Any dispute arising under
or in relation to this Warrant shall be resolved exclusively in the competent court for
Tel Aviv-Jaffa district, and each of the parties hereby submits irrevocably to the
exclusive jurisdiction of such court.  

	 	
Dated:
March 21, 2006 

	 	
BVR
SYSTEMS (1998) LTD.  

	 	
By:   
Aviv Tsidon, CEO and Reuven Shahar, CFO 

- 6 -

NOTICE OF EXERCISE 

To:

BVR Systems (1998) Ltd.

16 Hamelacha Street,

Rosh Ha'ayin

Israel 

	1.  	The
undersigned hereby elects to purchase _________ shares of Ordinary Shares of BVR Systems
(1998) Ltd., pursuant to the terms of the attached Warrant, (a) tenders herewith payment
of the purchase price for such shares in full. 

	2.  	In
exercising this Warrant, the undersigned hereby confirms and acknowledges the
representation under Section 9 of the Warrant and that the shares of Ordinary Shares are
being acquired solely for the account of the undersigned and not as a nominee for any
other party, or for investment, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Ordinary Shares except under circumstances that
will not result in a violation of the Securities Act of 1933, as amended, or any state
securities laws. 

	3.  	Please
issue a certificate representing said shares of Ordinary Shares in the name of:

         _________________
          _________________          
_________________

         _________________

	4.  	Please
issue a new Warrant for the unexercised portion of the attached Warrant in the name of
the undersigned. 

		
		
		
	_________________________	_________________________
	(Date)	(Print Name)
	 
	 	_________________________
	 	(Signature)

- 7 -20-F

Exhibit 10.1  

CONSENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM 

The Board of Directors

B.V.R Systems (1998) Ltd. 

We consent to the incorporation by
reference in the Registration Statements (No. 333-125879) on Form S-8 of B.V.R Systems
(1998)Ltd. (the “Company”) of our report dated March 30, 2006, with respect to
the consolidated balance sheets of the Company and its subsidiary as of December 31, 2005
and 2004, and the related consolidated statements of operations, changes in shareholders’ equity
(deficit) and cash flows for each of the years in the three year period ended December
31, 2005, which report appears in the Company’s Annual Report on Form 20-F for the
year ended December 31, 2005.  

	

/s/ Somekh Chaikin

Somekh Chaikin

Certified Public Accountants (Isr.)

Member firm of KPMG International  

April 30, 2006

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